Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Right. What's your name? Welcome back, It is still the February 19, and this is still a committee on general housing. We have one more item before we adjourn for the day in order to go on the floor, and that's a bill introduction. As you remember, we made a decision last year, which I'm delighted that we did, to allow the author of every bill that comes up onto our wall to tell us about the bill. So, Sandy, just tell us what motivated you, anything you want to tell us about the bill. If we take the bill off the wall, of course, we'll have counsel walk through the whole bill, and we'll have witnesses in the works. But at the moment, it's your show.

[Representative Sandy Pencemalt]: Okay, well for the record, my name is Representative Sandy Pencemalt, Bennington Rutland 1 District. So, I was on the school board when Act 60 came into effect in the late 90s, And at that time we were in teacher negotiations as well with healthcare costs. And so knowing what healthcare has done over the last eight to ten years, and that it's now reaching over $400,000,000 annually, I felt it was time that in the state that we are with X73 and the costs and everything, we're looking at the cost of education itself, I felt it was time that we started to look at some of the factors that relate to the cost of education. So, that's why I willingly decided to do this. So, recent projected cost increases in FY 2025 was 16%, FY 2026 twelve percent, with a projected FY '27 of a 7.3% increase, is an average How much was it in '26? '26 was '12. December. There's a projected of 7.3. 2018, a gold family plan for four people, a gold plus, which is the most common plan for the average school teacher was a cost of $17,000 In FY '27, it's $43,000 And the average contribution that teachers put in is 3% statewide, which is a cost of, and that's for

[Marc Mihaly (Chair)]: the $400,000 in the income, the total cost for the education. Is the 400,000, is that the cost to the school? That's the benefits. That's the benefit, that's the 97% if you will. Right. Okay. Yes,

[Representative Sandy Pencemalt]: so like I said, in FY18 it was at 17,394 and this current FY26 is at 40,000 with a projected next year point of 43,900. So, just under $44,000 which is 125% increase the last eight years with a CPI increase the same period of 32%. So, those costs are mostly borne by the taxpayers. And in the crisis that we're going into with people not being able to afford their own personal healthcare, contributing almost $3,000 a month for that same plan out of pocket when the teachers are contributing less than $10,000 a year. And we're looking at 3,000, malamar taxpayers are $3,000 a month. And then they also get the HRAs, which the teachers don't contribute anything to, that's a complete 100% benefit of a $1,500 average $1,500 benefit, which is a $33,000,000 HR repayment statewide in 2023 that was paid out. And the plans were anywhere from $3,800 to $46,000 So, the impact on the school budgets and healthcare costs are increasingly part of the school district's budgets. Rising benefits costs reduce flexibility for school boards, classroom instruction. So, the funds are directly taken away from classroom instruction, staffing stability, mental health and student supports, facilities maintenance and improvements. Established in 2018 for school play health benefits with both arbitration awards and increased benefits levels, The majority of these costs are absorbed by taxpayers. We currently right now have a winner take all arbitration, and because we have an equal number of board members on both sides of the arbitration table, So, we're looking to change the numbers on that board as well. And that is also in the bill. So, the goal of the bill is to cap total value of health benefits over a phased in period going forward when negotiations happen and establish a single statewide HRA administrator so that schools are dealing with different ones.

[Marc Mihaly (Chair)]: I see, okay. So, the negotiation would be on a statewide basis? Yes. It's not now?

[Representative Sandy Pencemalt]: No. Well, it is now. It is now, but there's no, it's an even number of people on each board. It's a win off, there's never, so when it goes to arbitration, it's a all or nothing

[Marc Mihaly (Chair)]: In other words, right now, as I understand it, if there's an arbitrator, the arbitrator has to go with either one or the other of the last best offer. Correct. And this bill proposes to change that.

[Representative Sandy Pencemalt]: Change that so that he can pick and choose from both pieces, both sides, and say, this is what I come up with, is the last best offer, here's what we've got on the table, and they can agree to that. That's Can I ask you

[Marc Mihaly (Chair)]: a question?

[Representative Sandy Pencemalt]: Yeah, think so you were saying to make the number uneven? So right now there's three members of the school board and three members of the school board association, three members of the teachers' union.

[Marc Mihaly (Chair)]: Marc? Stop that. Yeah. Going to three-two. And it's going

[Representative Sandy Pencemalt]: to go to three-three with with the the chair that can either be the bill is proposed to have the chair of the education commission or an appointee of hers. Is it three or is it five? I believe it's 5. 555. And it's going to go to 3441, or I don't have to go in front of me.

[Marc Mihaly (Chair)]: But it would be But

[Representative Sandy Pencemalt]: it's going to go

[Marc Mihaly (Chair)]: to an odd number. An odd number. An odd number. So that there's a, right, so

[Representative Sandy Pencemalt]: that's not a deadlock each time. And this is going forward. Okay. So I don't know enough about this world to understand who is this commissioner or appointed person. The commissioner is the Board of Education Commissioner? Yeah.

[Marc Mihaly (Chair)]: So that, in other words, that would be the odd person.

[Representative Sandy Pencemalt]: The odd person. Yeah. Yeah. Sure.

[Marc Mihaly (Chair)]: I do. So it's right now, it's five, five administrators, five teachers. And it changes to a total of nine. Right. Three being, administrators, three being teachers. The other three, secretary of education designee, commissioner in taxes or designee, and one representative from from law school board insurance trust.

[Representative Sandy Pencemalt]: Right. I know it was signed.

[Marc Mihaly (Chair)]: It's a three, three, three group. Right?

[Representative Sandy Pencemalt]: Marc? I've got a question.

[Marc Mihaly (Chair)]: Okay. We got the two. Go ahead.

[Elizabeth Burrows (Member)]: I'm wondering what your rationale was for picking or legislate or rather mandating that the secretary of education be the chair of the board and not the chair of the State Board of Education?

[Representative Sandy Pencemalt]: It's not mandating her or him. It's saying that she can appoint. She has the authority to appoint one person. It doesn't necessarily say that it's her. It

[Elizabeth Burrows (Member)]: says her or designee, but I wonder why you picked the agency of education as being okay. A representative of the agency of education as being as chairing that committee versus the state board of education?

[Marc Mihaly (Chair)]: You know what, it's perfectly fine for you to say, I don't know.

[Representative Sandy Pencemalt]: I have no idea why we did it that way.

[Marc Mihaly (Chair)]: You know what? It's legislation. She doesn't know.

[Representative Sandy Pencemalt]: Yep. Okay. Thanks. Yes. Yes. Gayle? I don't know

[Gayle Pezzo (Member)]: anything about this area at all, but it is the bill focused on the educators getting less as far as benefits rather than us focusing on

[Representative Sandy Pencemalt]: how to lower the price of healthcare? No, it's not taking, it's not, the aim is not to take less. The aim is to make it more equitable when it goes to negotiation going forward so that there's an arbitration, a true arbitration instead of saying the teachers say no, we're not going to give anything and this side wanting to say 10% and then this side saying no we're not going to give any and then they come to a middle ground it's not an all or nothing. So you feel that all along it's been there really hasn't been any negotiating? It has not. It's always been one-sided.

[Marc Mihaly (Chair)]: So do you well, the bill doesn't am I right? I don't know the bill. I haven't read the bill yet. So the bill doesn't contain it some sort of mandated specific change in the share that the teachers pay and the share that the state pays?

[Representative Sandy Pencemalt]: There's no mandate. It's just a point forward. It's a process change. Of negotiation.

[Marc Mihaly (Chair)]: Right. So it's changing the arbitration methodology, and it's changing the Size and makeup of the board. Okay. Elizabeth?

[Elizabeth Burrows (Member)]: Thanks. That's been a long standing problem, is that according to the 2018 law, when it was moved up to when negotiations for this were moved up to the state level, it goes straight to arbitration. And and that happened in 2018, and you you from the date or the cost increases that you can see, the the increases were incremental in the very beginning. And then 2020 hit, which is COVID, and it became it was remote for one thing, but it also you can you can see that costs from 2020 onward just it's no longer incremental. It just skyrockets straight up. And that is in part because of the arbitration process. Because the arbitrator is has to choose between the last best offer. They cannot pick and choose and actually negotiate a settlement between the two. They have to actually pick one of the offers on the table, a or b, and that's it. They can't pick a combination of a plus b.

[Marc Mihaly (Chair)]: Right.

[Elizabeth Burrows (Member)]: That's the problem. That's why it has been creeping ever upward.

[Marc Mihaly (Chair)]: I have experience with that, but I'm not gonna talk about it now because we're out of time. So anything else, Sandy, before we adjourn?

[Representative Sandy Pencemalt]: No. Just thank you for taking us in.

[Marc Mihaly (Chair)]: Of course. Thank you. Okay. Take care. Alright. Thanks very much.

[Representative Sandy Pencemalt]: Thank you. Thank So

[Marc Mihaly (Chair)]: we are by the way, tomorrow, we convene after the floor at 11:00. And we have sent to all of you a redraft of the letter to appropriations. Tomorrow, we've gotta reach consensus on that letter. Sounds good.

[Representative Sandy Pencemalt]: We have to get him working on it.

[Marc Mihaly (Chair)]: He's working on it.