Statement on Gov. Peter Shumlin’s Budget Address
Governor Shumlin has rightly focused on two major structural problems that must be addressed if Vermont is going to develop a sustainable fiscal policy: the rising costs of health care and corrections. His commitment to a single-payer health care system is an important first step to both cost reductions and needed reforms. And we agree that the state needs to do more now to reduce our future prison population.
It was refreshing that the governor appears to recognize that improving the efficiency of state government will take time and probably additional investment. The governor reduced his expectations of the savings that can be achieved in 2012 through Challenges for Change, the plan to improve government services while reducing the cost. The goal was a worthy one. But first state government needs to restore its capacity to assess performance and measure whether Vermonters are actually getting better services for their hard-earned tax dollars.
We are cautiously optimistic about the governor’s commitment to improving Vermont’s infrastructure, in particular, its broadband network. We remember that four years ago, we heard a similar promise from the previous administration: high-speed Internet throughout the state by 2010. We’re still waiting.
We are disappointed, however, that the governor’s budget relies so heavily on spending cuts, including cuts to human services that will hurt the most vulnerable Vermonters, and cuts for education that will only add to the upward pressure on property taxes. What new revenue the governor uses is mostly windfall revenue—an unexpected surplus from 2011, unanticipated federal funds, and additional taxes on health care providers that will enable Vermont to draw down additional federal money. Unfortunately, the governor has ignored the fact that Vermont has additional tax capacity for the next two years, thanks to Congress’s decision to extend the Bush tax cuts. The extension of those tax cuts will save the wealthiest Vermonters $190 million in 2011 and a similar amount in 2012.
I am very concerned about the cuts to social services and in particular, mental health. As stated by Floyd Nease: “The cuts would come at a time when Mental Health programs all over the state report long waiting lists for services, and a higher level of acuity for those Vermonters who are being seen. This means that our police, ambulance, emergency rooms, corrections and other community resources will be called upon to provide ever more inappropriate and expensive interventions.”
This is a mistake when hidden in staticis now know:
* In 2005, over 32,000 individuals died by suicide in the U.S. (nearly twice the rate of homicide).
* Suicide is the 11th leading cause of death nationwide. Whereas, homicide ranks as 13th.
* More teenagers die from suicide than cancer, heart disease, AIDS, birth defects, stroke, pneumonia and influenza, and chronic lung disease combined.
The “wealthiest” are people who invest in the US economy. Not having to pay higher taxes means they have more to invest.
Numerous studies show when the state takes their money by means of taxes, it will add jobs in the state government to administer the programs, but will reduce 2-3 times the jobs in the private sector that experiences a low-growth/no-growth economy.
The last thing Vermont needs is a bigger state government with a bigger budget and more/bigger programs.
Vermont’s government needs to become more efficient in all areas, including energy efficiency. Below are some websites to illustrate the point regarding energy.
http://theenergycollective.com/willem-post/46252/thermal-solar-california-desert
http://theenergycollective.com/willem-post/46824/impact-csp-and-pv-solar-feed-tariffs-spain
http://theenergycollective.com/willem-post/46142/impact-pv-solar-feed-tariffs-germany
http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses
http://theenergycollective.com/willem-post/47519/base-power-alternatives-replace-base-loaded-coal-plants
http://theenergycollective.com/willem-post/46977/impacts-variable-intermittent-power-grids
http://theenergycollective.com/willem-post/50167/impact-pv-solar-peak-electric-demands
The cuts to HHS could easily be offset in a couple of years if the Governor and our Congressional delegation are successful in implementing a single payer system. So much of what the state pays for services to vulnerable citizens is gobbled up by administrative costs and corporate profits by the service providers–it really is unconscionable. Single Payer could dramatically reduce costs to the state while improving services.
I agree. To make those who can least afford it shoulder the burden of deficits is reprehensible. Raising the deductible for Catamount participants will mean people will not get the health care they need become sicker and then rely on the state to pick up the bill. The tax cuts on the federal level is wrong headed and the lack of taxes on rich in Vermont is also wrong.
Thanks, Jack for a good summary of the strengths and weaknesses of Shumlin’s intentions for the budget. I hope that Vermont will not be bound by the national Republican drumbeat against “tax increases” which has bound the hands of lawmakers. As you say, there is room for progressive taxation which will use some of the “additional tax capacity” you point out. Continued expansion of a basically regressive tax–the property tax–will only put pressure on the already squeezed education system and town revenues. This will threaten one of Vermont’s usual strengths in attracting and growing companies: well educated, ready workers.
Jack,
The extension of those tax cuts will save the wealthiest Vermonters $190 million in 2011 and a similar amount in 2012.
What source does the $190 million number come from?
These wealthiest Vermonters are needed to make investments in Vermont’s economy. To use their money for government programs is an inefficient use of scarce money, that would be of much better use to strengthen the private sector so it can pay for the government we have.
This bill benefits no one, not even the billionaires. It will not staunch their fear of never having enough, it will in fact just feed it.