Public Assets Institute > Policy Areas > Education > Health care is the budget-buster—not education

Health care is the budget-buster—not education

From 1992 to 2009, the amount Vermonters spent on health care shot up. In the early 1990s, health care spending was roughly 10 percent of the state’s economy. Last year it was over 17 percent.

When you plot those figures on a chart, you see a steeply rising line. Economically, this growth in the cost of health care is unsustainable.

Now contrast health care with education. Between 1992 and 2009, Vermont’s total expenditures for K-12 public education fluctuated between 5.5 percent and 6 percent. On a line graph, education expenditures are flat. Unlike health care, education costs are not becoming an ever-larger portion of the economy. In other words, they are sustainable.

In his final State of the State Address earlier this month, Gov. Jim Douglas touched on both health care and education. Care to guess which he called the bigger problem?

He uttered the words “health care” just three times, and the context was either congratulatory or neutral. Nowhere did he mention that one of the main reasons Vermont is having trouble balancing its budget—and has had for several years—is the unsustainable growth of health care.

“Education,” on the other hand, appeared 36 times in the governor’s speech, and the references were mostly negative. Only one other noun—the word “state”—crossed the governor’s lips more frequently.

The first step to solving Vermont’s budget problems is to understand what’s causing them. Controlling health care costs is a big task, and one Vermont probably cannot solve by itself. But making education a scapegoat diverts Vermonters’ attention from the real issue we need to address: galloping health care costs.

Posted by Jack Hoffman on January 18, 2010 at 3:06 pm

4 Responses to “Health care is the budget-buster—not education”

  1. Tom Licata says:

    I happened to listen to Paul Cillo and Art Wolff discuss the state of Vermont’s economy on today’s Mark Johnson show.

    Paul continually harped on the fact that budget cuts translates into fewer government services. If fewer government services also mean fewer mandates, regulations, taxes, etc…, then fewer of these current services will be needed, as private sector jobs become more available and folks are able to hold onto more of their after tax income:

    Judging from the poll cited below, it appears it is just what citizens are asking for.

    Has the Public Assets Institute ever considered that it may be government and its policies that is driving its citizens into the very dependency that keeps government growing and seemingly so needed?

    According to a new poll from the Washington Post and ABC News, a large majority of Americans say they want a smaller government that provides them with fewer services.

    The poll asked: “Generally speaking, would you say you favor smaller government with fewer services, or larger government with more services?”

    58% aid they favor a smaller government with fewer services, and only 38 percent said they favor a larger government with more services.

    Paul, you compare education as a percent of Gross State Product; showing it fairly consistent over time.

    What would education look like as a percent of GSP if one were to strip out, say, the growth of Government (the largest single contributor of GSP) and Health Care (probably the faster single growth contributor)?

    These two items distort your measure.

  2. Ralph W Howe says:

    AS long as we insist on corporate welfare for insurance companies, health care management companies, and drug companies, through a scala mobile process that has no functional checks, we will see “health care” eating up our funds. Investing in preventative, up front programs in health, nutrition, housing and real jobs would shift from corporate welfare to the common good that reduces premature health care demands and lowers productivity, etc. See Sodexo Report.

  3. Jack,
    Your point is well taken. Important to note as well that health care is a major driver of education cost. One difference you neglect to mention is the ever expanding market for healthcare with an expanding and aging demographic and a shrinking student population. I believe we should be looking for ways to make our educational infrastructure more useful, spreading the cost across a larger part of our community budgets by making our schools into community centers.

  4. Chris Bray says:


    Can you post this graph?
    I am curious about the relative size of these budgets.

    Thank you for the information.