Ashe plan reduces Vermont school spending by $13 million

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MONTPELIER — Under the shadow of a veto threat, the Senate passed a plan Friday that keeps teacher health insurance negotiations local and forces school districts to cut budgets if they don't maximize savings from new health plans.

Senate President Pro Tem Tim Ashe, D/P-Chittenden, told colleagues the bill preserves the collective bargaining process and produces the savings demanded by Republican Gov. Phil Scott.

The Ashe plan reduces state support for education by $13 million for fiscal year 2018 and suggests that school districts find the money through health insurance savings. If school districts fail to find savings in health insurance costs, they would have to cut budgets — without hurting direct instructional programs.

The pro tem's amendment to H.509, the yield bill, does not explicitly force negotiators to bargain an 80/20 split for health insurance premiums.

"We are showing you [school districts] a bright shiny object, it's called the health care transition, why don't you go there for it [the savings]," Ashe said.

Ashe said he had no choice but to propose a mandated reduction in state support. Scott has threatened to veto the budget if the Legislature doesn't guarantee statewide savings from a one-time change in teacher health insurance plans. House Democrats don't have the votes to override a veto.

As a result of the standoff between Scott and lawmakers, the Legislature came back Wednesday for an 18th week. The stalemate wasn't resolved Friday and they'll be back this week, too — this time running into overtime at a cost of $250,000 a week.

"No one wants to be here at this time still hashing this out but everyone is within their rights and the rules," he said.

The Senate voted 20 to 9 for the Ashe plan. The vote was split along party lines, with Democrats supporting the proposal.

Scott in a press conference said the proposal doesn't reap taxpayer savings year over year by permanently rebasing the Education Fund. He also said the proposal will be too hard on school boards.

"It doesn't meet some of the standards I put in place, about trying to have some uniformity throughout Vermont, a mechanism in place to capture the maximum amount of savings. It is putting more pressure on the school boards," Scott said.

Scott said he worries that the savings would be eaten up by local negotiations for salary increases.

He said he is still working with the House and Senate leadership to get to a compromise and end the session.

The only way to be sure to realize $13 million in savings is for every school board in the state to negotiate an 80/20 split on the Gold Consumer Driven Health Care Plan and reserve $2,400 per person in a Healthcare Savings Account to help cover teacher out-of-pocket costs.

Ashe says his bill requires savings in future years.

"The $13 million is based on each district getting to that number (80/20 and helping with out of pocket costs), the districts that conform with the plan are either held harmless by the Administration or experience gentle expectations for their part of the contribution," Ashe said.

Taxes would be lowered by as much as 3 cents on the average residential property tax rate. That is about $74 in savings for a $200,000 homestead and $113 for those who pay based on $75,000 of income, according to Ashe.

If Ashe's plan is enacted on June 1, the Secretary of the Agency of Administration will tell each school district how much money will be withheld from their final education payment to make up for the tax cut.

It would then be left to up to school boards to figure out how to find savings. The Ashe amendment narrows the options: It says school boards must not cut direct instruction and must consider ways to save on health insurance.

The Joint Fiscal Office asked the Vermont Education Health Initiative to estimate how the Ashe plan would affect local school districts. The analysis shows how the $13 million statewide reduction would be divided up by the state's 60 districts. (The document is called Ashe Plan.)

Some districts would be forced to reduce spending by nearly $500,000. Rep. Cynthia Browning, D-Arlington, said she heard from both her superintendents and they said they will have to deficit spend. Bennington Rutland's share of the $13 million is $248,409.

"This is really irresponsible. This plan is asking school boards to make savings without the tools," Browning said.

Ashe admitted schools might need to fire instructional staff, administrators or maybe cafeteria workers.

School employees have to be let go by April 15 and nine school districts have already finished bargaining contracts. None so far meet the exact definition pointed to in this measure.

Jeff Fannon, head of the Vermont-NEA wasn't worried about RIFs saying schools are good managers and will find a way to make this work.

Fannon supports the Ashe amendment. "It is not perfect, but it does not infringe on collective bargaining," he said.

The measure includes a study to consider how to establish a single statewide health benefit plan for all teachers, administrators and school employees. They will report back to lawmakers in November.

"We are really urging people to move toward a common benefit without compelling them to do it. Nothing in here is saying we aren't open to that united benefit in the future. We try not to disrupt this year's negotiation and try to force a square peg into a circle hole," Ashe said.

The Senate also moved teacher retirement costs from the general fund to the education fund. It is covered by one time money this year, but in the future will bump up property tax rates for local districts. The House has opposed the shift.

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