STATEMENT: Public Assets Institute on Governor Douglas’s Budget Address, Jan. 19, 2010

There are two parts to Vermont’s current budget problems. One, which the governor accurately described in his budget address today, is the temporary problem of declining revenue brought on by the recession. We need a balanced approach to address this temporary problem. The Legislature already has made cuts, and now we need to use our rainy day funds and temporarily increase taxes on those who are still prospering in this downturn.

The second part is a structural problem, which started long before the recession, and is the result of the unsustainable growth in health care costs and the failure of certain taxes—like the sales tax and gasoline tax—to keep pace with the economy. We need a thorough study of Vermont’s structural budget problems so everyone can understand where we should be focusing our energy.

The governor’s solution to the temporary decline in revenue is to permanently reduce services to Vermonters. Instead, he should be working to build a bridge to the recovery.

The governor said nothing about the structural problems, and until they are addressed, we’ll just keep slashing away at programs and doing permanent harm to services that Vermonters need, without getting any closer to having a sustainable budget.