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.