Legislative Update- March 25, 2024
Sunday, March 24, 2024
by: Matt Musgrave

Section: Legislative Update

In the midst of crossover in the legislature when bills have to pass from the Senate to the House and vise versa things get hectic because to the legislators self imposed deadline. This self imposed deadline is meant to push the work of legislators so that they spend the appropriate amount of time on a bill then pass a vetted bill over to the other chamber to agree, disagree or amend. The process works well and is intended to create quality laws that are based on accurate facts, data and input from parties involved.

We recently reported that the AGC/VT lobbying team was active on bills S.96. This is a perennially introduced bill that usually are initiated by Chittenden County Progressives but this year the bill that fails year after year got worse. The bill was initiated this year by a few legislators who were convinced by the Vermont State Employees Association (VSEA) that work was inappropriately contracted to the private sector by state agencies causing the loss of work and positions within state government. On its face the bill is well intentioned to ensure that our dedicated state employees are not losing work but the reality of the results will change contracting in Vermont.

The bill addresses privatization contracts. By definition today a privatization contract is defined as "a contract for services valued at $25,000.00 or more per year, which is the same or substantially similar to and in lieu of services previously provided, in whole or in part, by permanent, classified State employees, and which results in a reduction in force of at least one permanent, classified employee, or the elimination of a vacant position of an employee covered by a collective bargaining agreement". The definition is clear that it requires the replacement of a state employee or elimination of a vacant position. There is a threshold created that requires the contractor to achieve a 10% savings above what could be done by a state employee to be privatized. 

The bill that was introduced changes the definition of privatization contract by eliminating "and which results in a reduction in force of at least one permanent, classified employee, or the elimination of a vacant position of an employee covered by a collective bargaining agreement" from the definition. The bill also increases the privatization threshold from 10% to 20% and includes a number of auditing before and after award that could result in the pull back of a contract. It also imposes a number of union related employee benefits and pay which may have an impact of prevailing wage and Davis Bacon rates. The bill also includes a controversial "just cause termination" that the legislature in Vermont and 48 other states has resisted despite numerous attempts to pass.

By changing the definition of privatization contracts the bill gives a significant amount of authority to VSEA and discretionary authority to the Attorney Generals Office. This means that with discretion based on the loose definition after the elimination of pretty important language mean that the $2 billon of state contracting and grant programs will be held under VSEA rules of employment. This will create a chilling effect for some and ruin businesses far beyond construction including healthcare, education and childcare contracting. It also would have an impact on municipalities and anyone whoever took a grant including PPP over $25,000 where a state employee "could" have done the work based on the discretion of the union and Attorney General. 

AGC/VT was the only witness representing the private sector of contractors to testify at the Senate Government Ops committee who introduced the bill and waited until the week of crossover to take consideration. In testimony we were stern about the opposition to the definition language. The committee seemed open to leaving the definition alone but VSEA rebutted suggesting that it was the most critical part of the bill intended to pull back work from private contractors to state employees. We pointed out that the reason for the privatization and outside contracting was due to a massive shortage of state workers. Currently there are over 1000 positions vacant in state government and they have stopped advertising for 600 due to a lack of interested workforce. Whatever the reason may be including that the private sector jobs are paying better and the major changes to the states pension program have made hiring state workers difficult. 

Yet, the Senate Government Ops committee felt by the end of one days work that they had found language that would exclude AGC/VT and VIECA members while accomplishing their goals by proponents of the bill. On the direction of the Attorney Generals office they left the definition as was opposed by AGC/VT and created some vague language to somehow exempt contractors and people with specialties. The challenge remains thought that the vagueness of the language seems to still appear to leave that broad discretion without direction with VSEA and the Attorney General. AGC/VT reiterated the concern and vowed to continue to oppose the bill and lobbied other Senators to the cause.

On Friday, March 22nd the Senate Appropriations took up the bill on a procedural rule that requires bills that cost money to be reviewed by the money committee. The committee was concerned on similar fronts to AGC/VT and some other emerging opponents who learned that the bill had passed its original committee. Committee chair, Senator Jane Kitchel introduced language that would create a study committee to see what the realities of the changes to contracting would result in. Specifically the strike all amendment asks a committee of the Governors admin, VSEA, Attorney General and Auditor of Accounts to report on the definition change language and who it would affect and what the change in threshold to privatization savings would do to Vermonts coffers.

AGC/VT applauds the Senate Appropriations committee for calling out that the work to establish the impact on Vermont and Vermonters needs to be considered prior to passing laws with limited input. This is certainly a case we can report that the process worked the way it should!