2025 VTGOP Convention: Policy Panel on Affordability

All right. Uh, my name is Jim Harrison. I am a state representative from Rutland County, uh, Rutland 11, which uh, includes Chittenden, Menden, Killington, and Pittsfield. Uh, I also serve in the legislature as vice chair of the House Appropriations Committee. So, when we talk about affordability, we're the ones that spend all of your money. Um, sometimes I agree with and sometimes I don't. Um, also a little factoid is I am the selfappointed commissioner of March Madness competition under the dome. And I say that because with me on this panel today is Matt Cota who was the 2024 champion of March Madness at the state house. >> Highest achievement. >> You can pay me later, Matt, for that little publicity. Uh anyhow, we're here to talk about um affordability. Um and before I do that, I just want to introduce Matt. He has a firm called Metal Hill which represents uh several clients among them the Vermont Fuel Dealers Association also represent Vermont Auto Dealers Association. He does some work for an organization I used to be affiliated with the Vermont Retail and Grocerers Association among others. Um he is also a frequent guest on WVMT's morning drive um in Colchester. So, we're very pleased to have Matt with us. He came all the way from South Burlington, so we appreciate the time and effort you put into it. Um, last session or last election, Republicans gained 25 seats between the House and the Senate at the state house. That gain was in large part because of the affordability issue. Chief among them was the 14% average property tax increase for education. For those of you who are at the past session, um, you know, we're trying to make some inroads to reducing overhead, but Vermont educa spends, I think it's the second highest in the country per student. Um, we're only fourth highest, whatever. It's high. Um, you know, we're probably always going to be on the top half because of our rural nature, but we don't need to be 1 2 3 or four. Um, so we're trying on that 14% average increase. I wish that that's what our property taxes only increase by. Our little town of Chitten had a 24% increase. This year I heard someone talk about they actually had a decrease. Well, we didn't. We had a 6% increase. So, it's still going up and it's still a problem. But that's not the only reason we're talking about high property taxes. There are a lot of other affordability issues. And we have with us an expert on that. Matt, what other issues would you talk about if you were talking about affordability? >> Thank you, Jim. Uh, and thank you for the invitation to be here. Um, when it comes to affordability, what I'm talking about is energy and energy policy and transportation policy. Uh, people ask me, why are you always on the radio, Matt? And one of the reason main reasons why is I never say no. And I could never say no to Jim Harrison if he asked me to speak. But I'll tell you, I would speak at the Progressive Party today or the Democratic party. Just so happens I was invited here. And I'll say the exact same thing, which is energy affordability is one of the most important topics in the last election and then in all future elections because how we drive, how we heat our homes, and how we power our homes with electricity is one of the most fundamental questions that we have going forward. We have on the books a law from 2020 called the Global Warming Solutions Act that mandates that we reduce greenhouse gas emissions by 40% by the end of the decade. So I was appointed by the speaker of the house to serve on the climate council. So, I am part of a 23 member panel that is designing climate and energy policy for the legislature and the governor and the administration to consider going forward. And I'll tell you what's in it, the good parts, the bad parts, and there's lots of disagreement about what is good and what is bad. But think about that fundamentally. We are required by law to reduce greenhouse gas emissions by 40% below 1990 levels by the end of the decade. That will be as a climate counselor, I'm telling you, impossible. What are the repercussions? Um well, number one, what have we been doing? We have in fact stopped the growth of greenhouse gas emissions and we've stopped the growth of fossil fuel consumption. There are some that think that we won't be selling gasoline or diesel fuel in 5 years. Nothing could be further from the truth. If you look at and I have a slide you can see at my website metohillmedia.com where our gasoline and diesel consumption has been over the last 10 years and over the last five since since 2020 co we are absolutely flat. We're not going down. We're not going up. And same with diesel fuel. The number one, the best program, government program, not government, the best way we have reduced greenhouse gas emissions in the transportation sector is a global pandemic. Our gasoline consumptions decreased dramatically in 2020 as people stopped started working from home um and stopped commuting as much. They have since gone up not to where they were preandemic but they have been uh less than 1% a change over the last 5 years. On the heating fuel side, propane gallons, gallons of propane used for heating, cooking, hot water, they have increased over the last 5 years. Heating oil has gone down. All this is to say, we have spent in FY25, the state of Vermont has spent over a half a billion dollars on climate change mitigation. I'm going to say that one more time. a half a billion dollars according to the Agency of Natural Resources on climate change mitigation. Most of that is federal funding, but still that represents about 5% 5 a.5% of 2025 FY spending. So we've spent a half a billion dollars in one year. Where are we at? Flat. Guess what? We're not going to be spending in FY26 and FY27, FY28. a half a billion dollars. Because if the money is not coming from the feds, that means in order to continue the programs that have kept everything flat, we'd have to come up with what the feds paid in about 400 430 billion every year. Again, 5 to 6% of our budget. So what? So now we have a new climate action plan that will be dropped on the desk of every representative and state senator in January that we put the finishing touches on the climate uh council u this past year that will say we need to do three things. We need to replace the incentives and rebates that have gone away under the current administration in DC. Okay? And we need to spend significant sums of money making sure our towns are more resilient to future climate change. And we need to ensure that our forestry and farmlands are well positioned to absorb carbon and to reduce uh climate change and other impacts on our farm and agricultural economies. What is that going to take? A lot of money. Meanwhile, as I hear from my friends in the trucking industry who have driven over too many potholes and and and bridges that aren't quite ready, we also need to raise a significant sum of money to fix our roads and bridges to get that federal match in order to have have good roads and bridges. So from the fossil fuel industry, from the industry that provides 97% of the fuel that you need and that businesses need to travel our state, from the industry that sells uh fuel that keeps 75% of the homes and businesses warm and with hot water from those users, from that user base and those businesses, there will be pressure to increase those costs of those fuels and that use that money for roads and bridges, resilient downtowns in agricultural areas, and to replace the rebates and incentives that have gone away. Is that going to happen in 2026? I doubt it. I sincerely doubt it. So, what does that mean? And and this is where I'll wrap up. What that means is that we will fail to meet our statutory obligations to reduce greenhouse gas emissions by 40% by the end of the decade. And because the 2020 law vetoed by our governor but returned by supermajority says that anyone anyone can sue the state of Vermont for failure to meet these impossibly high mandates and get their court costs paid and compelled regulatory agencies to enact rules that will in fact reach those mandates. There was legislation proposed to turn those mandates into goals to rightsize those emission reduction requirements. That has failed. It will probably fail again next year, but I appreciate all those that reckon with the reality. Thank you. >> Thanks, Matt, for your so positive and such a nice outline of what's to what's to come. Um, you know, I if I sort of recall and my name's on a couple of them, but um we had this clean heat standard that was passed a few years ago again over an override of the governor's veto. Um, and there were some expectations of u significant price increases in our heating fuels. Um, you talked about the supervision of the global warming uh solutions act. Uh there is a a measure I think that's been introduced to repeal the soup provision. Um there's also um a measure to a bill was introduced to modify some of the renewable energy uh mandates to allow for some more cost effective uh renewable energy. Um give me your insight as to why those bills haven't been taken up and and passed. I mean, the dynamic, as I said at the beginning, has changed a little bit. There's no more supermajority. Republicans gained seats. Still in a minority, but um why haven't those been taken up and passed? Yeah. And and I would add a third thing to that. Um and I'll respond to that question, which is the EV mandates. So in 2022, Vermont passed a regulation that said in order to address our number one uh emissions pollution sector, which is transportation, we are going to join California and require Vermoners require sellers of vehicles in Vermont to only sell electric vehicles. So if you if you wanted to buy a vehicle in Vermont, the rule said 35% of the vehicles on any dealers's lot had to be electric in 2026, scaling up to 100% in 2035. On truck side, it was slightly less, but it was still significant. There was no way in God's green earth that we were ever going to be able to convince enough Vermonters to buy enough battery electric vehicles as required by law. So, we also had a bill that would resend these regulations and that also failed. Thank goodness the governor put a pause on them until 2026, December 31st, 2026. U because what we have seen in the last 6 months is electric vehicle sales have gone down compared to last year. We're about 12 13%. It's going to be very difficult to get 15% and the law required us to get to 35% in just 60 days. It was impossible. So that gives me hope. That gives me hope that says with the governor's action, we can make sure that we won't have these impossible mandates that would really harm us. But the Clean Heat Standard or as was originally called the Affordable Heat Act, although enough Vermonters recognized that that was a laughable title, any any program that increases the cost of fuel by 78 cents, 80 cents, whatever the number it happened to be, depending on what study you look at, it doesn't make heating more affordable. Um, but the reality is is that it's still a viable program that could be adopted by a future administration. So, how does this work? The legislature passed the clean heat standard. The governor vetos it. It was overridden and now we went on a process of studying how it would actually be deployed. I was part of the technical advisory group that designed it. I was part of the equity advisory group that determined whether it would work. And it's pretty clear. I mean, this is America. We can put people on the moon. We can design a clean heat standard. What does it take? A giant pile of money. About a billion dollars over 10 years is what the experts found that it would cost a billion dollars over 10 years. about 58 cents a gallon in order to convince enough people enough people to drop their perfectly good heating system and buy something new. Um so that program did not pass because everyone smelled it out quite clearly. Democrats, Republicans knew from the beginning, but Democrats realized, oh yeah, this isn't really affordable. We can't put this into law. So they didn't, but they also didn't reject it. So it is still a viable policy to reduce greenhouse gas emissions in the heating sector if and when a future legislature or governor decides to enact it into law. It it didn't go away. It's not it's not law, but it didn't quite go away. Same thing with the mandates that Representative Harrison referred to in terms of reducing greenhouse gas emissions, removing a private right of action to stop uh anyone from suing the state for failure to meet these impossible mandates. Um that still there, still able to vote on, but we don't have it yet. The next lawsuit that comes, if it comes before the next election, I think will be telling. I think we'll learn about people's the public's appetite for legislature creating laws that allow anyone to sue us at any time. Well, you bring up a good point, Matt. Um why can't if if this is the most important issue before voters uh in terms of having, you know, reducing our greenhouse gas emissions, which no one would argue is not an admirable goal. We want to reduce greenhouse gas, but why don't you just why don't we just elect new legislators if they're not doing the job? Why do we need a suit provision? I mean, just if if I voted against the clean heat standard, which I did, um, unelect me, elect Aaron over there. I mean, um, you know, it's why why do we need a supervision? I mean, that seems like kind of crazy to shoot yourself in the foot. Uh, if you know, I don't know, maybe I'm looking at this wrong. >> Well, you're looking at it very similar to how I looked at it in 2020. Um, and remember that they first tried this in 2019. I've been in and around the state house for not as long as Representative Harrison, but for over 20 years now. And uh and so I can remember different policies that have tried and failed. And one of them that failed was in 2019 when the original global warming solutions act would allow anyone to sue anyone that sells fuel. Well, that was existential for business. And and let's just put a face on it for a second. You know, people talk about big oil, make big oil pay. Who is who's delivering your heating fuel? Well, if you're in Proctor, it's Judy Teranovich. If you're in Pittsburgh, it's the Getcha Boys or or or Howard. Um, if you're up in uh if you're up in the Northeast Kingdom, it's Fred. If you're down in Windham County, it's Casey. These are local Vermoners. The average heating fuel business, 10 employees. You talk about small businesses. Small businesses, you know, are are the general businesses in Vermont. The average small businesses last maybe 8 to 10 years. These companies have been around, some of them, for a century. How can they do that? They work their heart out and they provide a product that people want and they provide good service. And and when there is a sentiment that, oh, no, no, it's all controlled by someone in Texas, it's like they don't understand how the system works, they really don't. All right, I'm going to take this back. Um, we've got a few minutes left. I'm waiting for Patty to give me the high sign that you're you're done. Um, are there any questions that anybody would like to ask? Yes, sir. Johnson was our Nancy Johnson was our our speaker of the house and our representative in South Bureau. She had a 20point party lead going into the election and we all wrote this is stupid that we would have a lawsuit at the moment that something important was failing and uh she got unelected. >> She lost her election by 18 votes. Wow. >> Clear me. This is something that's going to get local. >> Yeah. I I think um the last election cycle, I think from the governor on down, Republicans did a good job of articulating the issue and things that were passed that were going to cost you more money. Um as I said at the start, the first thing was the property taxes. um politically um to override the governor's veto on that and not trying to find some way to bring that rate down um was stupid in my view. On on the other hand, I understand where the majority was. They didn't pass all the school budgets. They were done in each of our various towns. And as Beth said before, 119 different school districts. Uh so um you know they were a little bit in a box, but nonetheless um the message has from my perspective politically, you got to talk about affordability, affordability, affordability. Um, this past Tuesday there was an election for a new career technical school and I think a lot of us would like to see, you know, more investment in career technical education. But from what I gather from our friends in the press, the people that voted no, and a majority voted a strong no, was it was going to increase their property tax bill by 300, 400, $500, in addition to the question mark, okay, if the legislature redo the maps for what school districts are, am I going to be paying for it? and I'm not my kids can't even go to that school, you know, after, you know, next year. So, um, message has to be clear. It's not just about being a night person, nice person, and smiling to people at the dump and giving them donuts, which I've been guilty of before. Um it's it's about articulating the issues and affordability in your pocketbook means a lot to most of us. So any other questions are how are we on >> Oh we have seven minutes. Okay. All right. Yes sir. >> Global warming solutions. It it I'll let Matt answer this. I don't think it would be a tax reduction, but it would take the pressure off. Sometimes we do things because the court said we had to do it. And I think that's where we are on some of these new bills. None of them are I mean, they're all well-intentioned, but we don't live in a vacuum. I mean, I want One of the things we love about Vermont is our environment. We have a we have clean air. We have beautiful uh views, but we can't we can't solve global warming for the world. We can't I mean, I'll ask Matt, he's more in tune to this, but what is New Hampshire doing? What is New York doing? What is Massachusetts doing? I don't think they're doing any of these things, and we're supposed to solve it for everybody and pay for it. And we can't. We can't. I'm sorry. So, I would just say about uh the Affordable Heat Act or the Clean Heat Standard or whatever it's being going to be called in the future, which it's still a viable policy option for a future governor or a future legislature. Um, which is to say the reason why it failed is because of the mandate. So, people have questioned me and say, well, well, how what do you mean? when we designed the clean heat standard and I was part of the group that designed it uh the clean heat standard we immediately said well this isn't going to work because of the price tag and there was a robust discussion by the way I know we have a member of the press in the audience but very not covered by the press at all that's why I formed me media because we needed real coverage of what's happening inside the bureaucracy when we passed this when we designed it we asked the sensible question Well, this is going to really increase the cost, why can't we rightsize it? Why can't we make it so rather than 58 cents a gallon? Rather than a billion dollar program, why don't we make it a smaller program so it will be more effective in getting off the ground because the large price tag, it's dead on arrival. And the answer was, well, because the law passed by the legislature said you can't design a program that will do some good, that will reduce some emissions. You can only pass a program, you can only design a program that effectively reduces greenhouse gas emissions by 40% by the end of the decade. So our hands were tied. People said, "Oh, that price tag's too big." That was the law. The answer from the attorneys was you cannot pass a clean eat standard. You cannot design a clean eat standard unless it takes drastic measures to reduce greenhouse gas emissions, to reduce consumption of heating, oil, and propane. And to further complicate matters, this is five years of my life, so I'm sorry for delving into it, which is you have to design it so a third of those that receive the benefits of a clean heat standard, meaning subsidies to install something other than heating, oil, propane, that a third of them um that they get the credits. So, in other words, in order to ensure that low and moderate income verers that don't want to throw away the perfectly good heating system, that necessarily don't want to invest in an electric heating system, in order to convince them to do it, this the analysts came back, the private consultants that we paid several hundred,000 for said, "Yep, for that group of people, you need to pay 100% of the cost." So, we said, "Okay, the law says we have to design it to reduce it by 40%. The law says that we have to make sure a third of the benefits go to those that can't afford anything unless the money is provided for them. Okay, a billion dollars. And because of that, and because the 60 cents a gallon price tag that comes with a billion dollars, the program failed. If they if the legislature had just tweaked the law and said, "You should pass this, but it doesn't have to do all the work, just some of the work, it would have been designed completely different and it might be law today." So, in an interesting twist, the Global Warming Solutions Act and their strict mandates and the law for the Clean Heat Standard in fact prevented it from becoming law. >> Thanks, Matt. Um, last, as I talked about earlier, last election, affordability was on the minds of a lot of voters. Um, I'd also like to recognize our Lieutenant Governor, John Rogers, is here because I remember him before he got elected Lieutenant Governor. He was at the state house as a citizen several times during the course of the 2024 legislative session with groups calling attention to affordability and some of these same issues. John, is there anything you would like to add that um uh would be a good point for messaging going forward? Um, I would just say that we need to stay on the exact same testimony as last time around and that we continue to call on majority of the legislature to repeal both the heat standard and the world act and especially the heat standard because they told us on the floor that there would be enough for them to vote and it hasn't happened yet. I think we as needed, >> right? I agree. Thank you. Um, thank you all for coming this morning. I know there's more sessions coming up. Patty, I'm on time, right? We're we're good. So, thank you uh very much for uh being the timekeeper and not getting us in trouble. Thank you, Matt. Thank you.