As we've seen, the Federal Tax Cuts and Jobs Act passed in December will have varying impacts on Vermonters and Vermont businesses. And as there is with any major policy changes, there will be both winners and losers. In Vermont, we've been working to assess these impacts and identify where we can lessen any burdens or maximize any added benefits. I'm pleased to be here today with Don George, CEO of Blue Cross Blue Shield of Vermont, to talk about some steps they're taking to pass along some of the benefits the company is seeing through its members. Don will share more details in a moment, but in summary, Blue Cross Blue Shield of Vermont now expects to see an unanticipated, multi-million dollar credit due to federal tax reforms. A credit they are committed to passing on to their members. I also wanna recognize Green Mountain Power and Vermont Gas as both companies have also pledged to return the tax benefit they are seeing to their great payers. As you know, I appreciate any opportunity we can take in Vermont, the slow growth in the cost of living as my administration continues its work to make Vermont more affordable. As I've said in the past, as a matter of principle, I believe that we need to do more to keep costs of living from growing faster than the growth in the economy. And I wanna be clear, we have much more work to do on this front, but I want to take a moment today and acknowledge the transparency from these companies and their commitment to using this tax credit to diminish further increases. So while we think about making Vermont more affordable and ensuring Vermonters benefit from federal changes, I wanna thank the legislature for working with my administration on our proposals for tax reform and tax breaks for Social Security beneficiaries. Again, it may seem counterintuitive, but while the Federal Tax Cuts and Jobs Act will actually lower federal taxes for most Vermonters due to the complexity of Vermont's tax system, it's actually going to inadvertently raise state income taxes on Vermont taxpayers. If lawmakers do nothing to rectify this situation, about half of Vermonters, primarily working families with kids will pay a net total of $30 million more in Vermont income tax. We can't allow an accidental $30 million tax increase on Vermont's working families. That's why I propose the plan that not only protects Vermonters from this increase, but also achieves additional benefits in the process. My proposal simplifies our system but maintains our progressive tax code and makes sure that Vermont is more competitive with other states through lower tax rates. Our proposal is revenue-neutral and ensures most Vermonters will not see an increase in what they pay in Vermont taxes this year due to the federal action. The changes that we proposed allow working families with children to receive the full benefit of federal tax reductions without requiring cuts in state spending. Additionally, it greatly simplifies Vermont's tax calculation, lowers rates and encourages charitable giving while adding stability in revenue collection. Now, I'm encouraged that the legislature is giving this plan some discussion and our Department of Taxes is working to analyze the latest proposals. There's a lot of common ground here but I have some concerns about putting our income tax and social security tax proposals together with an education, a finance package that complicates these plans and moves us further away from the discussion on reforms and cost containment in our education system. It is my hope that we can work with the legislature to keep these separate, focus on areas of agreement and work together to make Vermont more affordable. Whether through common sense tax reforms or companies stepping up to pass along the benefits to Vermonters, this is another opportunity to make Vermont more affordable so we can help all Vermonters get ahead and become more competitive with other states aiming to attract more working families here to our beautiful state. With that, I'd like to turn this over to Don George to share more on the steps Blue Cross Blue Shield is taking on this front. Thank you, Governor Scott, for inviting me today and for that nice introduction. This is a day that I have been anticipating looking forward to since that changed into the new year. It was at that time that I became aware for the first time that Blue Cross Blue Shield members, that there was a high likelihood would experience lower premium increases over the next several years as a result of recently enacted federal tax legislation. And indeed, over the next several days and weeks, we were able to confirm that Blue Cross Blue Shield of Vermont in its members are positively impacted in two ways by the elimination of the Corporate Alternative Minimum Tax, or AMT, and the Federal Tax Cuts and Jobs Act. The first of these two positive impacts is that beginning in 2018, Blue Cross Blue Shield of Vermont will no longer have a federal tax obligation and federal income tax therefore will no longer be included in Blue Cross Blue Shield of Vermont premiums. The estimated impact of this positive development is just under 1% of insured premiums or between two and $3 million annually. So the elimination of our federal tax obligation will absolutely accrue to our members through lower annual premiums beginning next year. The second of these positive impacts is that Blue Cross Blue Shield of Vermont should receive a significant but very unanticipated federal tax refund as a result of the elimination of the Corporate Alternative Minimum Tax. The tax refund totaling approximately $30 million will be paid to Blue Cross Blue Shield of Vermont over a four-year period beginning towards the end of 2019 and extending for a four-year period through to 2022. Again, we're here today to announce that the full impact of these changes will be dedicated to mitigating our future premium increases on behalf of all Blue Cross Blue Shield of Vermont employees, customers. And I think most of you know that Blue Cross Blue Shield covers nearly a quarter million Vermonters. We provide healthcare coverage to over 120 large employers to about 3,000 small business owners and their employees and nearly 20,000 individual purchasers of qualified health plans on Vermont's health benefit exchange. And while today's development is a very positive and welcome form of premium relief to all Blue Cross Blue Shield of Vermont customers, I would say nevertheless, this premium relief needs to be understood in the full context of Blue Cross Blue Shield of Vermont's total premium and claim obligations. Each year, we process and pay nearly $1.5 billion in medically necessary covered services to the Vermonters whom we serve. So I think today there are two takeaways. One is that $30 million is a significant amount of money to Blue Cross Blue Shield and our customers, indeed a significant amount of money in Vermont. And we will pass all of this on to our ratepayers. The annual federal tax liability will begin today and be reflected in premiums beginning next year. And then the tax refund beginning in 2019 through years 2022. By the same token, $30 million in its mitigating effect needs to be seen in the context of $1.5 billion in obligation that is paid out each year by Blue Cross Blue Shield of Vermont to the Vermonters that it serves. And closing, and perhaps to answer a question you might have, from the time that I learned of this tax refund, it never occurred to me that Blue Cross Blue Shield of Vermont would use these funds for any other purpose other than providing premium relief to our members. For we operate solely for the benefit of our members and it is entirely consistent with our company and customer values and our commitment to Vermonters that the full impact of this tax refund be dedicated to mitigating future premium increases. Thank you for being here today. I'll turn it back over to Governor Scott. Thank you very much, Don. With that, we'd be happy to answer any questions maybe on this subject first, if you have any. How much of a savings per member do you think that would be? Do you have an estimate of that? You know, for the tax refund that's gonna begin in 2019 through 2020, we don't, we'd have to understand what premiums are gonna look like at that time. That is going to accrue to all of our members. Some are self-insured, some are fully insured. Different amounts will accrue to them based on those funding mechanisms. I can say that for the annual tax obligation that we no longer have, this will be reflected in initially in our first premium in filing in May to small business owners and individuals that are in our qualified health plan poll and Vermont's health benefit exchange and it will mean that their premium increase will be a little less than 1% higher than it would have been. So 1% of, what's the average annual premium for an individual policy? You know, for an individual policy, individual up to family could range on a monthly basis anywhere from $550 to $700. So could you do that? Five and a half bucks a month? I'll let you do the math. Well, we're asking you to do the math. Can you put a number on that? A number on that. I really, and the other thing is, I think that we all want to view this in the context of not today, but what the premiums are gonna be in 2019 and we've yet to begin that development. But is it, at its most base level, $550 a month for an individual premium? That's five and a half bucks a month. You can use that number. Okay. If the tax cuts took effect January 1st, why does the premium reduction not take effect until the beginning of next year? That's a great question. So we no longer have federal tax obligation. We begin to reflect that immediately in our filings to the Green Mountain Parable Board. The first one we have is would go in for May of this year. They will approve that by August and it'll be effective for January 1, 2019. Will the other insurers do the same? Yeah, I'm not sure. I think, and maybe others could answer this, but I believe that Blue Cross Blue Shield is fairly unique. That's a non-profit. I'm not sure if it does the same. Holds true for the others like MVP, but we'll certainly be looking at that to ask them if they are or they aren't, but effective they'll have on them and their rates. Have you heard from any of the other insurers? I have not at this point in time. So it looks like the legislature's gonna take a break next week. Are you satisfied with their progress today? I think this is where you get to leave this in life. I may need a lifeline, but feel free. If your staff can provide it, then sure. We still have another, about a day and a half and hopefully that they'll be able to put some measures forward undoubtedly. There are some initiatives that I'd like to see move. Some of the proposals that I put forward. Certainly the debate on S21-221 is one that we're interested in passing the Senate. It appears, I think they take it up for third reading today, and I would expect that they would, as they have with other bills that we wanna expedite, I would expect that they would message their actions taken on that to the House so that they could consider this even tomorrow. You had asked for that bill to be expedited before town meeting day. It doesn't look like they're going to make that. There's still a way to do it, if there really is. And I would say if I was somewhat surprised that they didn't take it up for third reading with a 30-zero vote in the Senate yesterday, but be that as it may, having it come out today for third reading, they could still message it to the House today. It could be taken up tomorrow with some rule suspensions and it could be, if they did that properly and there was consensus, then it could be on my desk tomorrow night. Would that just be 221? It appears 221 is an area, it seems as though when you read the tea leaves, so to speak, that there is a lot of support for that coming with a 30-zero vote in the Senate. And I believe that they might see somewhat, some acceptability to that in the House as well. The question about 221 between the Senate and the House is over the House Bill 422. And some in the House might like to combine them rather than pass a clean 221. I guess my question is, how do you feel about 422? Yeah, I'm in favor of 422. And I understand combining the two. But from my standpoint, right now, standing here today, if there is any consensus on one of them, let's get it done. Let us pass this, let's send the message that we're taking this seriously and that everyone is on board. And then we can work on 422 after the break next week and when we come back. It's still going to be an issue. There are other initiatives that I'd like to see taken up and we'll be able to take those up when they return. Well, what are those other initiatives? Well, there was a number of issues that I had asked that we consider. Raising the age from 18 to 21, I thought was a good idea. The ban on bump stocks, I thought that was a good idea. They have some other bills as well that should be considered. Putting forward, I'm all ears to what they would like to do in order to give for Monner's a sense of accomplishment in some respects that we're taking this seriously and that we aim to do something in a much better way. You mentioned regulating high capacity magazines as well. The possibilities when you're open to it, is that an discussion that you had with all ministers? Have not at this point in time, but I expect that'll be on the table as well. I am watching with interest what's happening on the national level and it's encouraging to see, to be honest with you, that there is some consideration for both sides of the aisle, even the president on some of these issues. So I'm hopeful that this will give some comfort to those who aren't feeling as though they wanna move forward, that they were all in this together. Let's take the politics out of this and let's do what's right for all across the US but here in Vermont as well. The American Senate is considering, expected to consider an amendment that would raise the legal age for producing firearms to age 21 but it would not include an exception if either taking a firearms class. Is that something you could get behind? Well, again, it could be but I think it would make a lot of sense if we could have some of those caveats that I talked about, if you served in the military, that you would get an exemption as well as if you're in law enforcement, you get an exemption. And I believe that if you've been involved in a hunter safety, completed a hunter safety course or a gun safety course successfully that you would be given consideration. But again, I've come a long ways and if that's what comes to be at the end, I could find a way to support that as well but I'd like them to consider those other actions. Have you had any further thoughts about S6? Well, again, that will be coming up. I think I said last week, I'm amenable to considering any and all and I believe that this issue is going to be coming up even as close to us as tomorrow in the Senate. The Senate this afternoon is folded into S55. Okay, so it'll start this afternoon and we'll see where the conversation goes from there. And why is it important to have something in hand before tongue meeting? I think Vermonters are looking for us to do something. And again, I think this sends a message that we are, that we care, we can put politics aside and we can do what we think is right, what makes sense, common sense. And I think that just providing this one bill that we can agree to and moving forward, I think would send a strong message to Vermonters. You said the ed financed that has been advanced in the income tax bill moves away from education reform. What do you mean by that? What reform does it move away from? Well, from my understanding, the House proposal that, and I'm still trying to catch up from what happened last night, but it appears that they've merged the two together. Some of the proposals that I would like to see for tax relief, they've merged them with the education reform package. So I think it complicates the issue from my standpoint. I don't see that there's been any serious look at cost containment. We're still going to complicate matters in some respects by having an income tax proposal. There may be some production and property taxes, but at the end of the day, if we're not spending less, we're going to pay just as much. It's just going to come out of a different pocket. So the cost containment part they talk about is referred to as the Beck Amendment or the Beck Maneuver, I mean. Is, you don't see that as cost containment? I don't see that as the type of cost containment in the near term that we need right now. So you're just focused on FY19. I think we need to look at both approaches, both short term and long term. And we have, there are a number of proposals that we move forward with that could be considered. On Friday, the original proposal that the House was in needs of a lot of money, they said, but we'll just delay this for a year because we're not going to have the proposed allegement we'll have at $47,000 in the county threshold and tier income tax and tax and property tax and so on. Did you do like that point? Well, again, I wanted to make sure I was willing to be open minded in terms of considering any different type of formula that came forward admittedly. I think an income tax proposal where it may complicate that for taxpayers when they feel as though they're getting a property tax reduction, which they would be, but they're not getting a reduction out of their pocketbooks in the end. So I was concerned that it was just, again, a way to make the whole picture murky that without cost containment on the other end, it was all for naught. But again, I was willing to consider most anything, but cost containment is something that we have to be serious about. So it was the latest proposal which came out yesterday. Does it get even further away from tying property tax expenses with school budgets? Yeah, I don't know if it gets any further away, but it doesn't get any closer. Okay. Do you think we should abolish the income sensitivity program? I think that it does give some sense of security that everything is okay when I think our spending is a bit out of control. So is it fair to say like every income sensitivity program? Well, I think it could be part of the mix. Again, I'm more concerned with the cost saving measures that we haven't seen much action on. And that's where I wish that the legislature would put it to spend more time on that. Yeah, I feel like you can really answer my question. Would you like to get rid of the income sensitivity program? I am willing to have that conversation. That's not an answer. But I'm willing to have that conversation in conjunction with any cost containment. And that's the answer I'm going to give and I'll continue to give because I believe that we have to, it has to be done simultaneously because you can't have one without the other. Maybe we'll get an answer sometime. Maybe. When they take up cost containment, maybe we will have that conversation. And I'll let you know that. Senator Sears is holding a hearing in our morning in judiciary, which is headed something like what specific language would you support? And your chief counsel is going to be there one of the witnesses. And the senator is going to be interested in not hearing everything that's on the table, everything is open to discussion, but getting to specifics. Is she going to be able to deliver any specifics tomorrow morning? You outlined last week. Yeah, I haven't spoken to Jay about this in her testimony tomorrow. But certainly I've moved in favor of certain proposals that I'm willing to have the conversation about and move forward with. And she's more than willing to have her speak about those. And again, consider anything else that they might have that they'd like to consider. But again, I hope that we move forward really concentrate on 221 over the next day and a half. Governor Baker and Governor Cuomo have a part of his Northeast gun safety coalition. They've signed them, MOUs, I guess, to establish sort of a regional approach to gun safety. So we're sort of surrounded in a sense, except for those wayward people in New Hampshire. Is that something you're interested in? It's something that I've asked our general counsel and public safety to take a look at. It may make some sense for us to be a part of that. I was somewhat surprised when I went to the National Governance Association meeting and seeing that they had a press conference on Thursday or Friday, announcing this three or four state coalition when they had never reached out to us or Governor Baker at that time. In fact, I was at the table with Governor Baker and we spoke about that. And I asked him if he had been briefed on that and he had not. So Saturday afternoon, I believe, Governor Malloy had approached both of us and said asked if we would be supportive. And I said we would take a look at it. But it was unfortunate that we were gonna meet in DC. We were all going to be there. In fact, we had a meeting of the Northeast Governance Association on Sunday morning, which we were all going to attend. And I thought that would have been a great time to discuss it, but unfortunately, this has taken a bit of a political turn, but we'll assess this and see if it makes sense for Vermont to be a part of this. Has Governor Baker given you any more insight into the degree of patience Massachusetts has with respect to Northern Pass vis-a-vis the Lake Shamp Land Park? He has not. He has made a mention, I think, in one of the meetings that I've been patiently waiting and I keep saying that eventually you'll get back to us. So are you still hopeful? Yes. Yeah, I mean, they want something to happen sooner rather than later. And when I look at some of the other proposals, I'm not sure that they're all shovel-ready. They don't have all their permits, which we have. And I continually try to promote the fact that we could act sooner rather than later. And I'm not sure that the other proposals can, but they'll find that out. That's part of some of the questions they have to ask themselves. Were you there for President Trump's speech to the NGA? I was not. I left on Sunday afternoon, so I missed the White House dinner and the conversation the next day. I was looking forward to asking you about his insistence that he would have run into the school. Right, yeah. Top to put yourself in that situation, I would imagine. I don't know how anybody could say that they would do or not do. I think we all hope we do the right thing, but I'm not sure. Who do you think should be the next growing from there? You know, I'm not gonna weigh into that because I could help or hurt any candidate I might pick. But it's an interesting election, and I'm sure we'll know more a week from now. I'd be able to tell you that probably then. Can you speak about where you stand on the 35,000 which is a little bit whether or not you think that, say, they're popular support to resist. Yeah, I'm all in for the F-35. I think it's be extremely beneficial for Vermont in its entirety, it's part of our economy and part of the economic opportunity in the future for Vermont. So I've been consistent in advocating for that initiative. Would you be okay if the Air Force sent a different plan? I don't know what that would be, but I want to make sure that we have an active airport and that we have an active base because, again, it's essential for our economy in that region. So a different aircraft or a different mission would be okay with you as long as it preserve the jobs? I'm very concerned about the jobs. I haven't heard that there is any other airplane under consideration. They've done a tremendous amount of work at the base already in anticipation of the F-35. I would have a hard time believing there's anything else under consideration. Is Lake Carmi in crisis? There is no doubt there are a number of problems on Lake Carmi have been for probably decades and we have some initiatives that we want to put forward. We hope that they will help mitigate in some respects and try and provide relief for those camp owners on Lake Carmi. Your officials look like there's no reason to take action right now, but at the end of the day, should we just wait for Derek to come and describe this as a setup? Yeah, I don't think that's enough. We're planning some aerators, I believe, to try and mitigate that damage or at least try and provide relief, as I said before. Is that enough? Oh, it's not enough, but it's, again, a one approach that we can take as we take other approaches, trying to, again, mitigate any amount of phosphorus entering the lake. I mean, I've talked about this before and that's part of this initiative that I believe has some merit that we should look to others, have a shark tank approach where we consider some entrepreneurial approaches to dealing with the phosphorus before it hits the ground and becomes a problem because what we have in this state is we have more phosphorus coming in than we have leaving and when we're trying to deal with it after it leaves the farm, so to speak, and goes into the lakes and streams. So if we can take care of that sooner, rather than later, I think that would be helpful over the long term, but we have to do some things as well to clean up the lake and we're putting some measures in place sooner rather than later. So how long in the shark tank are you taking hold? They're working on it now. You know, I don't know, I'm sorry? 50 years, but then the storm's actually coming. Well, you know, we'll see. We'll see. So people should just live with toxic water in the name of the lake? I didn't say that. We've devoted, committed to $50 million worth of projects and initiatives to try and clean up our lakes and streams. So we're moving forward with that and we'll stay committed to that and we'll keep putting money into that, but we should take and consider other approaches as well. But the only source of pollution there's a farm chain. No, it's not the only source. Is it Lake Irma? Oh, I don't, yeah, maybe Lake Irma. I mean, probably most of that, I would say it probably is, but I'm not a scientist. So why is there any effort to require farmers not to use manure? Well, I think they are taking different best management practices. I think they are doing alternative crop placement. They're creating buffers and so forth. I mean, I think they're doing, taking some steps as well. So it's all of us working together in order to accomplish that. And do you think that's enough for the homeowners up there to live? Probably not. I, you know, if I was in their position, I would be anxious as well. But we're doing everything we can at this point. So the farmers are more important? I'm sorry? The farmers are more important than the residents up there. Well, farming is very important too. It's part of our tradition. It's part of our culture. It's a three billion dollar industry for Vermont. So I would say it's important. I was talking to a Republican lawmaker this morning from a rural part of the state. And he said that he has been stunned at the reaction on the gun issue even from his constituents that there seems to be an overwhelming groundswell and the feeling that this is still growing. I think you met with Middlebury Middle School students this morning. They seem to have a powerful message as well. Do you see this still in process still evolving? I do. It is remarkable. I mean, look at my own, myself. It's evolving on this issue in a quick amount of time. And I think it's happening across the state, across the country. I think we owe our students a lot of credit for keeping highlighting this issue and continuing to move forward. And when I met with that group this morning, they asked great questions. They were great advocates. And I think we need to encourage that. And I hope they don't stop because as a result of their action, we're taking action as well. And I think that's helpful. Thank you very much. Appreciate it. Thank you.


Welcome to All Hands Update, I'm Petty Officer Ian Cotter. November is National Native American Heritage Month and this year's theme is Native Pride and Spirit, Yesterday, Today and Forever. Native Americans were first recognized for their service during the Revolutionary War, when George Washington authorized their enlistment for service in the Army, Navy and Marines. Native Americans served as code talkers during World War II and their legacy continues today with more than 12,000 sailors of Native American and Alaska Native Heritage serving in the Navy. Since 1994, ceremonies across America have honored Native Americans and Alaska Natives. Read a Sailor's Personal Story about their Native American heritage at All Hands Magazine online. To learn more about Native American service in the Navy, visit the Naval History and Heritage Command website.