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The fiscal 2013 budget adopted by the Vermont House last month would increase state spending by about 6 percent over the current budget year. That may sound like a lot, compared to inflation, say. But Vermont’s General Fund budget was cut by 6.6 percent in fiscal 2012¹—so the proposed increase isn’t enough to make up for lost ground, let alone cover inflation or any increased need for services.

Focusing on a one-year percentage increase highlights an important flaw in Vermont’s budget process: No one can say whether 6 percent is too much, too little, or just enough, because Montpelier presents Vermonters with no vision of what the budget is meant to achieve—other than to keep state government running.

The “purpose” section of the House’s Omnibus Appropriations Act for fiscal 2013 states:

The purpose of this act is to provide appropriations for the operations of state government during fiscal year 2013. It is the express intent of the general assembly that activities of the various agencies, departments, divisions, boards, and commissions be limited to those which can be supported by funds appropriated in this act or other acts passed prior to June 30, 2012.

Although Vermont is the only state not required by law to balance its budget, the expectation in Montpelier and among Vermonters is that spending will match available revenues each year. That’s a fiscally responsible stance. But instead of looking at both available revenue and the cost of meeting Vermonters’ needs, state budgets start with the revenue estimate and then attempt to adjust spending to match what’s in the till.

In other words, Vermont takes the short-term approach of “managing to the money,” rather than working toward a long-term strategy to meet Vermonters’ needs.

If we think of the state as a bus, the process the governor and legislative budget-writers have followed is to look in the gas tank, estimate how much fuel they have, and try to figure out how far they can get in the coming year. If times are good, they may carry a few more passengers. At other times, in order to go a little farther they’ll tell some passengers to walk.

A better approach would be to determine how many passengers are on the bus and where they need to go, figure out the most efficient way to get there, and then make sure there’s enough fuel in the tank to get everybody to their destinations.

How we got here
Gov. Richard Snelling, who served from 1977 to 1985 and again from January 1991 to August 1991, earned a reputation for being a good manager of state government. His view was that government had a counter-cyclical role in the economy, which is the opposite of managing to the money. He said state government should grow faster when the economy slowed and more slowly when the economy was better and the private sector stronger.

Snelling maintained that state government could respond to Vermonters’ needs for additional services in the difficult times, cut back in the good times, and have a long-term, sustainable growth rate of about 2 percentage points above inflation.² He wasn’t proposing a rule that the budget ought to grow 2 percentage points above inflation each year. He simply said that was a sustainable growth rate—a reasonable long-term average through the economic peaks and valleys.

Managing to the money, which took root in the mid-1990s, shifted the goal from addressing Vermonters’ needs to making the numbers work. That approach didn’t pose serious problems before the Great Recession, because the economy was relatively strong. Both the administration and the Legislature assumed an average budget growth rate of 3 percent to 3.5 percent, but sometimes growth exceeded that. For instance, between 1997 and 2008 General Fund spending grew at an annual average rate of 4.7 percent because revenues also were growing at that rate. (As it turns out, 4.7 percent was also 2 percentage points above inflation for that period.) For 25 years before the Great Recession—fiscal 1983 through fiscal 2008—Vermont’s General Fund expenditures grew at an average annual rate of 5.3 percent. Inflation averaged 3.1 percent a year.

When the recession hit in December 2007 the economy shrank and tax receipts declined. Now managing to the money meant something different: appropriating less money for essential services just when more Vermonters were turning to state government for help. From fiscal 2007 to 2012, the growth of General Fund spending averaged 1.6 percent a year—including use of federal funds Vermont received to make up for the drop in state revenues. The increase approved by the House last week pushes up the average annual growth rate for 2007 to 2013 to 2.4 percent.

More than 13,000 jobs disappeared in the first 18 months of the Great Recession. Just as in previous recessions, more families turned to the state for help. From fiscal 2007 through fiscal 2011 the number of Vermonters receiving food stamps through the state’s 3SquaresVT program increased by 75 percent—to more than 90,000 (Figure 1). In the same period, the number of households needing fuel assistance through the Low-Income Home Energy Assistance Program (LIHEAP) rose 74 percent—to more than 36,000 (Figure 2). Reach Up, the program to help support low-income families with children, saw a 31 percent increase in enrollment.³ And the number of Vermonters receiving health care through Medicaid increased. Meanwhile, the cost of the health care services covered by Medicaid was rising at more than 6 percent a year.

Food stamps and LIHEAP are usually supported entirely with federal funds, so increased demand for those services shouldn’t create a direct demand for more state funds. However, Vermont did step in to help when federal LIHEAP funding was cut a few years ago, and in response to more cuts scheduled for next year the House approved $5.1 million from the General Fund for heating assistance. Medicaid and Reach Up require a state match for the federal funding, so increases in enrollment have demanded increases in state funding. General Fund spending for Reach Up, for example, grew at an annual rate of 8.3 percent from 2007 to 2012.

These larger increases were offset with cuts in other areas, which is how budget growth slowed to 1.6 percent after the recession. That’s why the courts closed their doors at least one day a month, and the state reduced its workforce by 8 percent, especially positions involving planning, data collection, and analysis. These cuts were not the result of an assessment that the courts were open too much or that the state had too many employees. They were simply the result of manage-to-the-money math: There wasn’t enough money coming in at current tax rates, so the state needed to cut spending regardless of Vermonters’ needs. If the spending track from 1983 to 2008 had continued through the recession, the fiscal 2013 General Fund budget would be about $240 million higher (Figure 3).

What’s enough? Who knows
Even this long-term growth trend doesn’t answer the question of how much Vermont should be spending in fiscal 2013. In fact, Vermont doesn’t know what it should cost to carry out all of the current functions and obligations of state government. One way of knowing would be to prepare a current services budget each year, which would provide an assessment of the cost of delivering existing state services with adjustments for known or anticipated changes—for example, higher fuel costs or higher unemployment. But Vermont does not prepare a current services budget.

Instead, what Vermont has published in recent years is a consensus “budget gap” estimate. The administration and the Legislature’s Joint Fiscal Office agree on a projected General Fund spending amount. Their economists also prepare a consensus estimate of how much revenue the state expects to collect with no changes to current law. The difference between the spending and revenue forecasts is the budget gap that needs to be closed to balance the budget. For the last few years, Montpelier has relied primarily on budget cuts and one-time revenue windfalls to close the gap, though officials have used small tax and fee increases to raise some additional funds. Both the administration and the Legislature have generally opposed raising broad-based taxes.

It’s not clear how the spending side of the budget gap calculation is derived, though it is usually based on the prior year’s budget—which itself may have been inadequate—with some adjustments up or down for unavoidable expenses or anticipated savings. The administration does not release information from agencies and departments showing how much they need to run their programs or carry out their obligations for the coming year. The budget gap estimates for the last three years show the demand for General Fund spending going down: The spending forecast for fiscal 2013 is about $40 million less than the fiscal 2010 projection.⁴ It’s hard to imagine the need for spending was dropping while the economy remained soft and demand for services high.

The real budget gap
Even with this forecast of declining spending, the administration and the Legislature calculated about a $50 million budget gap for fiscal 2013. When he presented his budget in January, Gov. Peter Shumlin recommended using one-time revenues left over from the previous year, primarily from human services; cutting human services programs; and using unanticipated revenues from other state funds, such as cigarette taxes and taxes from health care providers (Table 1).

This is the gap in the General Fund, which covers most functions of state government— such as the judicial and prison systems, environmental regulation, economic development, human service programs, state police, and a portion of education. But the $1.3 billion General Fund accounts for only about a quarter of all of the money the state will spend in fiscal 2013.

There is no discussion of a shortfall in the remaining three-quarters of state spending. Appropriations from the Education Fund, not counting money it receives from the General Fund, are about $1.1 billion. Spending from federal funds, including additional money provided for recovery from Tropical Storm Irene, will total almost $1.8 billion. Transportation, state-funded health care, and other functions grouped into “special funds” come to almost $750 million. With a few other minor funds, state spending totals $5 billion, including the General Fund (Table 2).

Vermont has numerous needs that are not being addressed—such as the backlog of paving and bridge repair projects even before Irene struck. But the difference between necessary spending on Vermont’s highway system and available transportation funds is not included in the budget gap projections. Nor do costs disappear simply because the General Fund has balanced its books. For instance, when the Legislature reduces the annual transfer from the General Fund to the Education Fund—as it has in recent years—the gap in the Education Fund grows and has to be closed by increasing property taxes or cutting school budgets. Projected shortfalls in education funding are never included in the budget gap projections.

Eyes on the goal
Vermont’s budget process has become an exercise in making the numbers work—holding General Fund spending to an arbitrary measure of acceptable growth, which by definition does not exceed anticipated revenue. In the meantime, we seem to have lost sight of the purpose of the state budget—and of state government: to meet Vermonters’ needs.

Vermont should have a budget process that begins with an objective assessment of need. But before that assessment is made, there should be public agreement and understanding of what we’re trying to achieve with the $5 billion we’re spending each year. High on the list should be meeting the fundamental human needs of Vermonters, which include adequate food and housing, safe neighborhoods, a clean environment, high quality education, a fair and speedy judicial system, and economic opportunities sufficient to support a decent standard of living.

Vermont also needs to re-establish a system of accountability—tracking how well it is doing in meeting those fundamental needs. The state should resurrect the Vermont Well-Being Reports, last published in 2006, which measured the overall health of Vermont society. Can we honestly say Vermont is meeting its commitment to residents when more than 70,000 people are living below the poverty level?⁵

Vermont needs to develop new indicators so people can see whether everyone is sharing in the state’s economic prosperity, or just a few at the top. When the governor calls for rebuilding Vermont’s middle class, it should be easy for Vermonters to access information that shows the state’s progress toward that goal. The growth in Vermont’s income disparity over the last 25 or 30 years should tell us we’ve been moving in the wrong direction.

Finally, the annual budget process needs to provide a meaningful way for Vermonters to provide input beyond being allowed to speak for two minutes at a public hearing. After all, it’s Vermonters’ tax dollars that fund state government. The state should be using these funds for the wellbeing of Vermonters.

Without objective needs assessments, meaningful public participation, and easily accessible, comprehensible transparency and accountability, the budget process is disconnected from the people—and the debate shrinks to the budget’s percentage increase or decrease in a given year. Vermonters deserve better.

© 2012 by Public Assets Institute

This research was funded in part by the Annie E. Casey Foundation. We thank it for its support but acknowledge that the findings presented in this report are those of the Public Assets Institute and do not necessarily reflect the opinions of the foundation.

1. Includes American Recovery and Reconstruction Act (ARRA) funds used for “base” appropriations—for essential, ongoing programs and services—in fiscal 2011. In fiscal 2009-11, Vermont used ARRA funds to pay for base appropriations that otherwise would have been covered with in-state revenues. Vermont received additional ARRA funds for projects and programs the state might not have undertaken without those federal funds.
2. Gov. Richard Snelling, Inaugural Address, Jan. 10, 1991.
3. Vermont Agency of Human Services, Economic Services Division.
4. Joint Fiscal Office forecast, November 2009.
5. U.S. Census, American Community Survey, 2008-2010.

Deputy Transportation Secretary Sue Minter summed it up best in a New York Times story last week. The Shumlin administration received well-deserved front-page kudos for getting the state’s highways and bridges fixed and functioning in record time.

“The attitude,” said Minter, “was, ‘We’ll do the work and we’ll figure out how we’re paying for it, but we’re not waiting.’”

In other words, the administration was committed to rebuilding the state’s infrastructure after the flood regardless of where the money was coming from. That was the right attitude and it’s not a surprise that it got results.

It’s the opposite, however, of the usual manage-to-the-money approach where the state estimates its annual receipts at current tax rates and then decides what it can and can’t do.

We’re still waiting, for example, for the state to investigate the backlog of reports alleging abuse and neglect of elderly and disabled Vermonters. Organizations representing the victims felt compelled to sue this week to force the state to take action. We’re still tying to figure out how to pay for state policies that we know will reduce poverty—11.7 percent of Vermonters lived in poverty in 2010, up from 9.4 percent in the 2000 Census. And we’re still waiting to have adequate and affordable childcare for Vermont’s working families.

If we had managed to the money with post-Irene repairs, we would still be reading about impassable highways and stranded residents. The state would still be in crisis.

And in fact, the state is in crisis, but not in ways that make headlines. At least 70,000 of us live in poverty, and our middle class is losing ground. But our elected leaders aren’t showing the post-Irene, can-do attitude to tackling these problems.

After Irene, the state had a clear goal of rebuilding roads and bridges and our public officials kept at it until we achieved those results. We need to bring the same approach to the rest of state government and to state budgeting. Instead of allocating a certain sum each year to anti-poverty programs, the Legislature should adopt a budget that will reduce poverty. Instead of arguing that we can’t afford to hire more investigators, our political leaders should be saying we can’t afford to allow elderly or disabled Vermonters to be abused or neglected.

In other words, Montpelier needs to use the new thinking that guided the flood recovery – a commitment to results – to create a state that works for all Vermonters.

That said, last week’s meltdown creates a big problem for Vermont—along with the rest of the states—as it prepares to develop a state budget for the 2013 fiscal year, which begins next July 1. The bill creating the Super Committee called for automatic budget cuts if the committee failed to meet its deficit reduction targets. The automatic cuts don’t take effect until January 2013, which leaves Congress to continue to fiddle until after the November elections.

The states, meanwhile, have to proceed on the assumption that the automatic cuts will occur on schedule, which will be smack in the middle of fiscal 2013 for most of them. This auto-pilot plan is the least responsible way to start to close the budget deficit because it doesn’t require any additional revenue. Nevertheless, the states have no choice but to develop their budgets next year around this worst-case scenario.

Maybe the message of the Occupy Wall Street will carry into the November elections. Maybe the next Congress will start thinking about national budget priorities that address the needs of the 99 percent rather than cater to the 1 percent. But the states can’t count on that, and by November much of the damage will already have been done.

There are no estimates yet of how the automatic cuts will affect federal funding to the states for specific programs. Those will emerge in the coming weeks and months. Rather than passively waiting to take the hit, Vermont should prepare to step in to take the action that Congress is seemingly incapable of taking. If members of Congress won’t raise revenues to pay for needed services, then Vermont ought to do it for them. We could call them “federal replacement revenues,” and if a new Congress accepts its responsibility and raises the taxes that have to be raised, Vermont’s replacement revenues could expire automatically.

Vermont wasn’t afraid to move forward with real health care reform when Washington failed to respond to voters’ desire for a public option. Yes, it probably would have been better to do this at the national level, but that wasn’t going to happen, so Vermont had to do something. Similarly, Governor Shumlin is right that it would be better if Congress would raise historically low federal taxes. But, again, if Washington won’t act, Vermont should claim the unused federal taxing capacity to generate the revenue necessary to meet its responsibilities to the citizens of the state.

Now that deficit reduction has been become the crisis du jour, most of the current reporting and discussion are focused on how much and how quickly to cut federal spending—few are questioning whether to cut.  National Public Radio, therefore, deserves credit for broadcasting one interview at least that challenges the conventional wisdom. What Stiglitz said wasn’t new or unusual for him. It just wasn’t the kind of thing you hear very often in the echo chamber that the mainstream media have become.

I don’t need to summarize the points Stiglitz makes; you can listen to or read the interview. I will say this, though: His comments at the end on the role of government are a refreshing change from the rhetoric of the last 30 years, which has only gotten more shrill.

During the current federal deficit reduction debate, as the deficit hawks grow more righteous, it’s important to remember that we had this problem solved 10 years ago. Clinton raised taxes during his first term—despite dire warnings that it would destroy the economy—and by 2000 the federal government had a record annual budget surplus of $236 billion. According to Congressional Budget Office forecasts at the time, the public debt was projected to drop from $3.5 trillion in 2000 to $1.2 trillion in 2009.

When George Bush took office, he evidently saw no problem with leaving our children and grandchildren saddled with debt. Never mind that we still owed trillions of dollars, he said a surplus meant the government was taking in too much money, and pushed Congress to cut taxes.

It’s also worth noting here that in 2001 Bush correctly concluded that cutting taxes would reduce the amount of revenue flowing to the federal government. A couple years later, when the federal budget was back in the red, he reverted to supply-side economic theory and called for more tax cuts—this time, under the delusion that it would increase federal revenue.

We surely have enough evidence by now that cutting taxes and starving government does not produce prosperity for the large majority of Americans. It’s time to start addressing the questions that Stiglitz poses: “[W]hat kind of society do we want to create and how do we get there? What is the appropriate role of government and what does that cost and how do we best finance that?”

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.

The official state projection of the fiscal 2012 budget deficit is $112 million, about 9 percent of projected General Fund spending. This assumes that $33 million in new cuts under the Challenges for Change initiative have already been made for 2012 (they haven’t) and that all $38 million in fiscal 2011 Challenges savings will carry forward into fiscal 2012 (they won’t).

But even if we assume the consensus number is correct, the task of filling this budget gap is a killer.

Here’s why.

The recession started in the middle of fiscal 2008. State revenues nosedived over the next two years; they’ve only begun to recover this year. Federal recovery (ARRA) funds combined with state budget cuts plugged more than 90 percent of the hole between what the state needed to spend to maintain state services and what it took in for revenue during fiscal 2009-2011.

The good news is that the gap is much smaller in 2012 than in the previous years, and revenues are recovering.

The bad news: ARRA funding—which filled more than half of the hole over three years—will no longer be available in fiscal 2012.

More important, though, 2012 will be the fourth year of major budget cutting. The administration is preparing a budget that would reduce state appropriations to about 85 percent of what the state needs to do its job.

In general, the easiest and least harmful cuts are made first—and they’ve been made. There is little left to cut without undermining essential state services to Vermonters.

How did we get here? In short, by mixing up our priorities. Policymakers have followed the fiscal principle called “manage to the money.” This approach suggests that the state needs to function on reduced recession-level revenue even as Vermonters have greater need. Little attention is focused on that increased need.

In other words, the focus of state policymakers has been money—raising and spending less of it. In fact, despite the revenue shortfall, the Legislature actually cut taxes this year. While this might sound good to Vermonters who don’t like the thought of paying more, it is undermining education, health care, clean air and water, transportation, communications—the things people need.

“Managing to the money” is putting money ahead of people. And that’s not only bad for people, it’s bad for the economy.

During the last major recession, 20 years ago, the state put people first and then worked out the money part. It raised income taxes on the wealthiest and other taxes as well. It even ran a deficit for a couple of years. Vermont came out of the recession stronger than it went in.

We’ll have a new administration in January and it needs to get its priorities straight. It has to bring new thinking to the job it is taking on: making government work for Vermonters, not just counting beans.

The promise was that cutting taxes would bolster the economy and create jobs.

But the record shows just the opposite. The national rate of job growth during George W. Bush’s tenure was the worst since the government starting counting in 1939.

The tax changes didn’t do much for Vermont, either. Job growth so far this decade is worse than any decade since the 1940s. We have fewer jobs today than we had in 2000.

The federal tax cuts were clearly good for some, though. Vermonters with incomes of $200,000 or more saved a total of about $660 million between 2003 and 2008 on their federal tax bills.

But did those tax savings lead to investment in job-creating activities to benefit the rest of us? A report from the Congressional Budget Office last February casts doubt on the theory that they did—or ever would.  “[I]ncreasing the after-tax income of businesses typically does not create much incentive for them to hire more workers in order to produce more, because production depends principally on their ability to sell their products,” the report said.

It’s impossible to know what would have happened without these tax policy changes. Many factors influence the economy. Still, there’s reason to be skeptical when tax cuts are offered as the cure for all problems.

Bush first proposed tax cuts in response to a modest budget surplus: The government was collecting too much money, so we should cut taxes. But then the economy slid into recession in 2001 and revenue looked weak, so Bush trotted out the supply-side argument: We needed to cut taxes in order to stimulate the economy and generate more revenue.

The corollary to tax-cuts-make-everything-better is that tax increases make everything worse. That’s exactly what a lot of people predicted when Clinton proposed raising taxes, primarily on the wealthy, in the early 1990s. For Vermonters, this was on top of state tax increases Governor Snelling and the Legislature had already enacted—again, largely on the wealthy—to solve a budget deficit.

Now here’s an interesting fact: In the 1990s, after these federal and state tax increases, Vermont’s private sector jobs increased 22.7 percent.

Jobs are always held up as the reward for tax breaks. And when we offer tax credits to businesses in return for creating jobs, at least we ask for proof that they have, in fact, added new positions. (We’re less demanding of proof that the jobs would not have been created without the tax credit.)

With broad tax cuts, however, we’re supposed to take it on faith that lower taxes will translate into more jobs. Only after the money is gone do we get a chance to tally up the return on our investment.

After this last round, it appears there is little to show at either the national or state level for the money that stayed in the bank accounts of the wealthiest among us. That money could have been spent on early education or colleges, building new fuel-efficient mass transportation, or getting broadband to people and businesses who desperately need it. All these activities would be good for everybody: rich, poor, and in-between.

And unlike tax cuts, they are proven economy-boosters. That means jobs.

“Scissors, Glue, Pencils? Check. Cleaning Spray?” describes how other states are responding to the wave of school funding cuts that have occurred during this recession. Having already shifted the cost of routine school supplies onto families with schoolchildren, administrators in some states are now asking those families to pack toilet paper, paper towels, and cleaning supplies in their kids’ backpacks as they ship them off to school.

This is the kind of false savings we’re likely to see in Vermont if we allow the commissioner of education to dictate school budget amounts for every district in the state. One way to meet artificial budget targets is to simply move items off budget. Instead of buying toilet paper or Windex with tax dollars, ask local residents to pay for them. The community doesn’t save any money. In fact, without the benefit of bulk purchasing, families are likely to spend more on the supplies than the school would. But the school budget will be smaller, and we can pretend we’re better off because taxes are a fraction lower.

The school board in Williamstown recently reduced bus service in response to pressure to cut its budget. Perhaps the parents who now will have to drive their kids to schools will use less fuel than the buses, but it seems unlikely. Like many of the state budget cuts in the last couple of years, the Williamstown action will reduce school spending by shifting costs, but without a net savings to the community. It’s true that only the parents of schoolchildren will have to bear the additional cost, but that hardly seems fair when everyone has an interest in making sure our kids are well educated.

We’re coming up on the 30^th anniversary of Ronald Reagan’s declaration that government is not the solution to the problem, government is the problem. Three decades of anti-government, anti-tax rhetoric have created such a phobia about taxes that we’ve lost sight of our self-interest. We pool our money to buy and operate buses because it’s the most efficient way to get kids to school in a rural state like Vermont. We don’t (yet) ask kids to bring heating oil, chalk, fax paper, toilet bowl cleaner, or dry macaroni to school because it’s cheaper and more efficient to buy that stuff in bulk. But we’ve gotten so freaked out about taxes we’ll do almost anything to avoid them—even if ends up costing the community more than the taxes would.

That’s not good management. You can’t give people 75 percent of the resources they need and expect them to get all of their work done. It’s unfair to the employees, a disservice to the people they’re serving, and often a waste of the money you do spend.

If we had been having an honest conversation about the state budget, everyone would know what the choices were. If we cut the budget, these are the services we might want to eliminate. If we decide we want the services and need additional revenue, these are the options for generating more money. That discussion also should include an objective assessment of what’s working and what’s not.

Challenges for Change, the government reform program passed by the Legislature this year, holds out the promise of getting better services for less money. But while the main focus of Challenges has been doing more for less, the latest progress report on the new efficiency program points to one area where Vermont may be able to do less and save more. The report doesn’t come right out and suggest we eliminate the Department of Economic Development, but it certainly raises the question.

Challenges’ first economic development goal is achieving “a sustainable annual increase in nonpublic sector employment and in median household income.” That really goes without saying; more jobs and higher wages is the essence of economic development. But look at the administration’s take on the government’s role in achieving this goal:

“We do not believe that the State spends anywhere near enough to actually affect median income. Other much more influential factors will affect medium[sic] income much more than any program or group of programs we could afford to implement. Factors such as cost of fuels, the weather, interest rates, inflation, etc will affect medium [sic] incomes far more than anything this Agency can do. We believe net new, nonpublic jobs are also more dependent on national and international forces more than our programs.”

If these programs really don’t work, why does the administration keep pushing tax credits and claiming that they’re creating jobs and boosting wages. And if we’re trying to reduce state spending, shouldn’t we start with programs we know are ineffective before we cut services that are going to diminish the lives of some Vermonters?

Vermont is a great place to live and work and an attractive place to do business because of the investments we’ve made over the years in our public structures like parks, courts, schools, and environmental protections.

With state budget cuts and state employee layoffs for the past several years, we are starting to see cracks in those public structures. In the Cracks in the Public Structures series published in our bi-monthly newsletter, we’ve looked closely at several areas of state government where the signs of deterioration are showing.

We are interested in knowing the places where you see cracks. Have you or someone you know noticed a reduction in services, or change in Vermont’s quality of life as a result of state budget cuts?

Email sarah@publicassets.org with your thoughts.