By Win Smith, Chair
and President, Sugarbush Resort

Once again the House has passed a tax bill and sent it along to the Senate for their consideration.

Last year we spoke about the ongoing “death by a thousand cut” approach that has been coming out of Montpelier for the past several years.  Another few cuts have been proposed by the House.

Rather than taking a strategic approach to tax policy, it seems that Ways and Means Committee is again in search of taxes that will receive the least howls from voters.  Rather than slow our rate of spending to match our economic growth, our legislators are again raising taxes and fees.

On the surface, the increase in mutual fund registration fees sounds reasonable.  After all, Vermont’s fees are lower than the other New England States. What isn’t explained, though, is who really pays for the fees.  It is not Blackrock, Fidelity, or other Wall Street managers of the funds, it is the investors.  You and I and our employees who are buying funds in their IRAs and 401-Ks.  These fees are part of the expenses of the funds and one’s return is net of the fees.   This small increase will not be visible to most, but if we increase ours and others then increase theirs, ultimately the increase will become material.

Then we have the increased deposit tax on the largest banks operating in Vermont.  The message here seems to be, “we love business if you are small, but don’t get big or we will tax you.”  Once again this tax increase does not seem strategic but rather arbitrary. After all these days, who likes “big banks”?  Why would JP Morgan, Bank America, Wells Fargo or others want to do business in Vermont if they see this message?  Our Vermont banks do a good job of supporting businesses in the State, and contribute significant philanthropic dollars to our communities, but many of our businesses benefit from competition and need the services that only larger banks can provide.

And finally, there is the move to increase the fee on uninsured workers and this one directly impacts seasonal business like mine.  Rather than address the growth of Medicaid and figuring out how to fund it appropriately, another tax is suggested, which unfairly burdens a group of businesses.  We offer health insurance to all 155 of our full-time employees, but our winter payroll grows to nearly 1,000 and some of these part-time employees do not signify that they have insurance for a variety of reasons. Some are not even residents of Vermont.  Again, this just increases our cost of doing business compared to our competitors in other States.

These tax and fee increases are not mortal wounds, but we are getting closer.  What is needed is what we have said before.  Let’s dust off the Blue Ribbon Tax Structure Commission report.  It was an excellent piece of work.  It was bi-partisan and strategic, and I believe it is still worth pursuing many of their recommendations, if not all of them.

For the second year in a row the Guidance Office at Winooski High School (WHS) has reached out to the Roundtable to partner with them on their school-wide Aspiration Day. For these students, many of whom are first generation Vermonters or whose parents are new Americans, the idea of migrating from formal school into the workforce is daunting, and school demographics point to additional reasons why it is important for business to have more direct engagement with students.

Winooski is more ethnically diverse than other high schools in Vermont (49% v. 8%); almost 60% of students are eligible for free or reduced lunch; their students score in the bottom 10% of high schools for reading and math proficiency; and the graduation rate of 52% is well below the statewide average graduate rate of close to 90%.

Special thanks to Roundtable members Michael Lash, President and CEO of Ethan Allen Home Interiors, Michael Seaver, Vermont President, People’s United Bank, and Pierre LeBlanc, President, Engeleberth Construction, who took the time to engage in a meaningful way with students who desire to know what it takes to communicate to the business world, how to overcome racial and gender biases, and why it’s important to get as much education as you can.

Want to make a difference in the life of a child? Don’t wait to be invited, just step up in your own community.

In what is becoming a semi-annual event, Chair Al Gobeille met with members of the Roundtable’s Health Care Working Group, chaired by Mike Walsh, to provide an update on progress of the All Payer Model term sheet currently being negotiated with Centers for Medicare and Medicaid Services (CMS). The term sheet describes the basic policy framework that would allow Vermont’s health care providers, payers, and the government to operate an all-payer model. And this framework would ultimately provide an approach to health care payments that reward the health care system for providing high value care and benefit Vermonters.

At its essence the state agrees to coordinate Medicaid and commercial insurers, and commits to financial targets and quality goals, in exchange for which the federal government will allow Medicare to participate in the Vermont system. Gobeille noted that the proposal aims to make health care more affordable by bringing health care spending closer to economic growth; the term sheet sets a 3.5% spending target and a 4.3% spending cap, with a commitment that Medicare will grow more slowly in Vermont than nationally. The financial targets are based on health care services in Vermont’s Medicare, commercial and Medicaid ”shared savings” program today, which covers most hospital and physician services.

Vermont aims to improve quality of care by increasing access to primary care, reducing the prevalence of chronic disease, and addressing the substance abuse crisis. And by working with existing mental health, substance abuse and long-term services and support providers, Vermont will have created an integrated health care system. Al Gobeille and the GMCB, as charged by Act 48, will hold the Accountable Care Organizations (ACOs) financially accountable for quality measures.