Pension conflict of interest study planned
$5 million allocated in 2010 by the Vermont Legislature for economic development loans hasn’t been recouped as planned. The Senate Economic Development Committee wants to know why, according to a report from the Campaign for Vermont (CFV).
Also CFV is funding a study of possible conflicts of interest among Vermont state senators and pension funds or unions.
With some edits, the CFV report is printed below.
Concern around the ‘capital seed fund’ from 2010 surfaced in the Senate Economic Development Committee last week. This program was meant to be a revolving loan fund, but the original $5M in funding does not appear to have been recouped. There is a proposal to add another $1M in funding but first legislators want to understand what the ROI of the program actually is.
There is some level of risk that the Senate will pull much of funding out of H.159 which would effectively quash any economic development effort this legislative session. Some programs, like the UVM technology transfer program, may only receive half of the funding originally envisioned by the House. Similar cuts may happen for outdoor recreation efforts and tourism and marketing budgets.
“While prioritizing federal dollars and examining the costs and benefits of each program is a worthwhile effort, we should be careful to not make cuts that will undermine recovery efforts,” CFV said.
There was a discussion in House Natural Resources on Tuesday about expediting administrative review and permitting of the Act 250 process for projects that receive American Rescue Plan Act (ARPA) funding. Administration officials pointed out that speeding up review and permitting is largely a function of resources. More staff equals faster permits.
The Senate is getting down to decision time on broadband funding. The Finance Committee seems ready to allow for more flexibility for who can apply for the available $250M in grant money. However, there is no decision yet around affordability measures. This could prove important because over the next few years the cost of service is likely to overtake availability as the largest driver of access.
Senators are also skeptical of setting up a new statewide entity to take on broadband buildout and funding because of the time it takes to set up such organizations. ARPA funds need to be spent within the next three years and wasting 6-12 months setting up a new organization may prove to be a costly delay.
The pension bill, H.449, was voted out of the House last week after a debate over defined benefit versus defined contribution plans (like state colleges, some state employees, and municipalities now enjoy). The bill would create a task force to look at benefit and contribution recommendations and bring a proposal back to the legislature next year.
“We are concerned that delaying action on this issue will make the problem worse and force even more painful cuts,” CFV said.
Governance changes in the bill that would require training for members of the Vermont Pension Investment Committee (VPIC) and require experienced financial and investment advisors be consulted in setting expected rates of return and in making investment decisions.
During Senate review of H449, there was some debate about the makeup of VPIC, particularly whether legislators should serve on the board. The Senate has no qualms about adjusting benefits and is already talking about what groups should be exempt. They agree with the House approach of exempting existing retirees and those within five years of retirement. However there was interest in extending this to ten years (which aligns with the CFV recommendation of consistency between the vestment and exemption periods).
Some committee members suggested a possible deficit reduction of $600 million. Campaign for Vermont released a project proposal to do background research on all 30 Vermont State Senators to determine which might have conflicts with the pension funds or unions. Our intent is to publish a list of those conflicts and ask legislators to recuse themselves where appropriate. Currently, the project is almost 70% funded.
House Government Operations started looking at S.15 last week, which would move towards universal mail-in voting. A number of advocacy groups are supporting the bill because of expanded access to voting. However, there are some concerns around the ability to town clerks to manage this process going forward and whether the State is asking them to do too much. As part of this effort, the Secretary of State’s office is promising to work on cleaning up voter checklists in order to make sure that ballots get to the right people.