No More January Surprises

The purpose of the state budget is to improve the well-being of the people of the state. That’s what the Legislature declared last year for the first time.

The Legislature also demanded greater accountability, so the average person can see whether Vermonters’ health, economic security, education, and quality of life are improving or getting worse, and greater public participation, by allowing the public to weigh in on budget goals and help prioritize spending and revenue initiatives.

In keeping with these calls for accountability and public participation, the administration held public hearings last fall on the fiscal 2014 budget. But then Gov. Peter Shumlin caught a lot of people off guard in January, first with the announcement in his Inaugural Address that he wanted to cut the state Earned Income Tax Credit, and then two weeks later with his attack on welfare recipients in his Budget Address. There had been no mention of these initiatives at the fall forums.

The surprise announcements didn’t serve the governor or Vermonters well; both proposals ran into stiff opposition, in part because no one was expecting them. That’s not to say they would have been any more acceptable if they had been unveiled earlier. But the administration might have saved itself and the Legislature a lot of time and energy by doing advance work and discovering how little support these proposals had.

The cut to the state Earned Income Tax Credit would have affected more than 100,000 Vermonters. The plan was to reduce their credits by two-thirds. For a single working mother trying to support two kids with a low-wage job of, say, $17,000 a year, the governor’s plan would have reduced the family’s income by $1,100.

The governor’s proposed overhaul of Vermont’s welfare-to-work program, Reach Up, wouldn’t have affected as many people. But the state has already been through a deliberative, thoughtful process after the federal welfare reforms enacted under President Bill Clinton, and concluded that Vermonters were better served by not imposing arbitrary time limits on families if the adults can’t find work. Reach Up, at its core, is meant to help children in poverty by helping their parents get to a place where they can earn a decent income. Punishing the children if their parents fall short doesn’t help anyone—and is likely to cost taxpayers more in the long run.

Nevertheless, purportedly to save money, the governor wanted to overturn this policy and impose lifetime limits on Reach Up participation. To support his plan, he tried to cast Reach Up participants as lifelong freeloaders who were content raising a family on $660 a month.

A plan to cut the EITC or put time limits on Reach Up is precisely the kind of initiative that should be backed up with data and discussed at a public budget forum. If the administration didn’t know in November that the governor would make these proposals, at least it can’t be accused of violating the spirit of accountability and public participation that the Legislature outlined. But it does raise serious questions about how much thought and analysis went into these initiatives.

Had administration officials first made their case to the public, maybe they would have learned how important the EITC is to hard-working Vermont families. And they might have heard how difficult it’s been to find work during the deepest recession in 70 years in a state that has fewer jobs than it had six or seven years ago.

The public process is supposed to start by October 1 each year. In the wake of the governor’s January surprises, the public is likely to be better prepared this fall. It would be good if the administration is, too.

Posted by Jack Hoffman on May 23, 2013 at 4:55 pm

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