Late last year I reported on the work of Vermont's Property Tax Exemption Study Committee and its moves to tax public, pious, and charitable organizations. The one concrete action forthcoming is now the listers who set property values for the towns will be determining a monetary value for exempt properties, so that the legislature can know how much revenue is potentially available.
I had the opportunity to interview Tim Ashe, Democratic/Progressive State Senator from Chittenden county. Because he is Chair of the Senate's Finance Committee, he will be instrumental in both reforming property tax exemptions and figuring out a way to finance Vermont's single payer health care experiment.
I asked him about the Finance Committee's work generally and then we discussed the issues surrounding property tax exemptions for public, pious and charitable institutions.
Let's say down the road it's determined that we need some contribution from exempt properties, you can't properly proceed without knowing what the values are.
Once the state knows how much revenue is out there, the Legislature would have the information necessary to act to remove exemptions. At about 15:20 in the video, Ashe connects removing property tax exemptions with financing single-payer as part of a large comprehensive one-time tax reform plan.
It think it will be discussed in the context of education finance reform and health care reform, because in both instances we're talking about multiple billion dollar enterprises and if you try and reform those, the tax implications up and down the ladder are pretty severe. So you would want to think about all this collectively rather than keep doing fundamental tax reforms. Then people get so dizzy and off balanced that there's no predictability in life anymore.
We are at the point in Vermont where the dream of single payer is meeting the nitty-gritty of financing a new system. As a prelude to figuring out how to pay for single-payer, Governor Peter Shumlin has proposed $14 million in new money raised through a health care claims assessment, a state surcharge on every health insurance claim.
The bigger task is meeting the goals of Act 48, the 2011 law that set Vermont on the path to universal health care coverage. A series of permissions from the Feds is necessary in order to build the system, so that, and some real difficulties with the IT end of the state's health exchange, has made the goal of a 2017 start date for single-payer rather challenging. Ashe describes the daunting scope of the task.
(21:45) What we're talking about is raising $2 billion through some public mechanism to replace roughly $2 billion in what are now private premiums that are paid. So first off people have to get comfortable with the idea with this, whether its 1.6 billion which is the low estimate or 2.2 billion which is the high. We're not talking about adding 1.6 to 2.2 billion to the state's health care expenditures, like we'd be crazy to be saying that.
That money's kind of already there
It's replacing the money we raise with a commensurate amount from a different and hopefully more efficient mechanism. How you do that without creating disturbances to either subsets of the Vermont population or to the economy is a delicate dance.
So in Vermont we may have an amped up version of the phenomenon where Democrats are wondering "oh man, are we going to get punished at the polls for trying to get people better health coverage?" In considering the ins and outs of a payroll tax to finance single payer, Ashe stated
To me that will cause a political storm which we would have to weather. So that will make us, it will require us to think creatively about, one, if that's the right mechanism, how do you transition in a way that it doesnt just blow up the economy. But that's only one method of financing a health care system.
The big news lately is that the Shumlin Administration has not been forthcoming with financing plans.
A legislator of his own party is requesting public records to see the adminsitrations draft plans for financing health care. He was required to do so by January 2013, and delays have put this problem well into an election year. When asked to describe two other financing plans beyond a payroll tax, Shumlin's reply of
"sure, bubble gum and lollipops" did not aid his request that people be patient.
So despite our problems, Vermont is not a meth lab of democracy. While there is much focus on all the bleak heartless extremes codified into law in state legislatures throughout the nation, Vermont is taking on a huge challenge that moves the nation's progress with ACA many steps forward. We are feeling real pressure to get it right, so that people will live better lives in the state, and also to show the nation that yes a single payer system can be done in the US. And we may even do it with precedent-setting taxing of pious institutions.