Public Assets Institute > Policy Areas > Family Economic Security > The Legislature’s budget plan: First steps toward smart investments for Vermont

The Legislature’s budget plan: First steps toward smart investments for Vermont

By Steven Gold,, March 28, 2013

The budget proposal to be considered this week by the Vermont House of Representatives isn’t perfect. But it begins to move the state in the right direction: toward smart investments that benefit all Vermonters and away from the austerity thinking that will take us nowhere.

In January, the administration handed the Legislature a budget with a mixed message. It proposed some important new, long-needed initiatives, particularly in early and higher education. But it proposed to pay for these initiatives by taxing break-open tickets, cutting the earned income tax credit (EITC) for low-income workers, and imposing new time limits on Reach Up—the assistance program for needy Vermonters with children. None of these sources could be considered serious revenue to support the governor’s initiatives. All would hurt low- and moderate-income Vermonters and ask nothing of those who’ve been doing well. In fact, the proposed changes to Reach Up and the EITC would undermine time-tested and effective anti-poverty efforts.

So the House was left to wrestle with a key question from the start of this session: After years of austerity budgeting, will the state begin again to make smart investments in our people and infrastructure with the goal of creating prosperity that all Vermonters can share?

From the looks of things, it appears that House Speaker Shap Smith’s answer to that question was yes. He asked the Ways and Means committee to bring in about $20 million in new revenue to balance the budget, make some investments, and build the state’s reserves to prepare for likely federal budget cuts. The committee passed a bill late last week that raises the needed revenue without cutting the EITC or raising other taxes that would put excessive new burden on the Vermonters who can least afford to pay more. This modest revenue package represents an important step away from austerity and toward a vision of smart investments that benefit all Vermonters.

It would be easy for me to say that I don’t support every revenue source in the package or every line item in the budget—because I don’t. However, it’s important to remember that the legislative process is designed to bring many voices to the table to work out some kind of agreement. It’s tough to make good policy in the chaotic political environment of the State House. I respect the work the House committees and their leadership have done to find solutions.

The Ways and Means committee’s revenue package is fair and moves the state toward a more progressive tax system, based on Vermonters’ ability to pay. The Appropriations committee’s spending plan acknowledges the need to invest in our future and begins to take small steps in that direction, rather than simply tightening our belts another notch.

Overall, these two committees have managed to take a budget offered by the governor that balanced itself on the backs of Vermont’s working poor and to propose in its place a budget that begins to move the state forward.

With economic recovery finally on the horizon, it’s time to shift out of crisis mode and begin to think about investing in a strong future for all Vermonters. Legislators should support efforts that give Vermonters hope about their future. Citizens, too, should encourage their representatives to be bold in making smart investments that will keep our state moving forward.


Steven Gold was most recently the interim president of Lyndon State College.  He served as commissioner of two departments and deputy secretary of the human services and administration agencies for governors of both political parties.  He is currently a member of the board of Public Assets Institute.