As expected, Gov. Phil Scott’s budget address (video/text) was a rollicking affair full of new and expanded programs and tax relief that he touts as providing “transformational” change for Vermont. Yep, these budgets are a lot easier when they’re floating on a sea of federal Covid funds, plus vastly inflated state tax revenues thanks to the purchasing power injected by the feds into Vermont.
To his credit, Scott cautioned that we can’t spend willy-nilly. He said this is a once-in-a-lifetime windfall, and thus a once-in-a-lifetime chance to reset and strengthen Vermont’s economy. “The economic future of our state will be defined by what we do today,” he said at the end of his address. And he warned against spending one-time money for ongoing expenses. “These are one-time funds for one-time challenges.”
Do his proposals match his sweeping rhetoric? In part, but not in full.
Scott called for some major one-time expenditures, in line with his warning against recurring commitments. He wants to spend a total of $145 million on housing, $216 million on climate change resiliency, weatherization, water and sewer improvements and electric vehicle infrastructure and incentives, $195 million on broadband and $150 million for cell towers.
Those are potentially transformational ideas. But he also floated a whole lot of proposals that would involve fresh commitments to ongoing funding, which would set us up for some truly tough budgetary choices once the federal money drains away.
A few examples. He wants to significantly boost funding for the new- and remote-worker grant programs he loves so dearly, an expansion of the TIF program, a $10 million increase in UVM’s appropriation plus boosts for post-secondary technical and vocational education, expanding access to pre-K child care, and expanding a pilot program for a workforce network to connect people with jobs.
When the federal funds disappear, would those line items revert to their previous levels? Or will the recipients come to expect the generosity to continue? I think we know the answer to that one.
Scott also wants $50 million in tax cuts and tax credits. They are easily within our means now, but they’ll be a drain on state finances when we run out of Covid relief aid.
So, in many ways, Scott seems to be violating his own precept of devoting one-time money to one-time investments.
There’s also more than a bit of penny-anteism in his budget plan. Lots and lots of relatively small items or incremental adds to existing efforts and relatively few large-scale, transformational ideas. But that’s kind of his jam, isn’t it? He’s not big on thinking outside the box.
Scott’s address focuses on workforce and the economy almost exclusively. There’s a lot about “workforce” and very little about, you know, “people.”
He wants to get more bucks in Vermonters’ wallets, but the only tool in his toolbox is tax cuts and credits. There are other ways to ease the financial burdens on working Vermonters like health care reform, paid family leave, and a $15-hour (or more) minimum wage. Nothing lie that was in Scott’s budget.
There are minimal investments in some of our most pressing social problems. $8 million more for substance use seems like a drop in the bucket. The only proposal in the field of mental health was to expand the State Police’s mental health prevention pilot program to all VSP barracks.
The people who would benefit from Scott’s budget are largely those who don’t really need it. Expanded tax credits for buying electric vehicles won’t help people who can barely keep a beater on the road. Those worker credits will mostly go to middle-to-higher earners. You know, the “desirable” elements of the workforce. Same for anything labeled “tax credit.” To enjoy the benefit, you have to be able to spend the money up front and collect the credit later on.
Overall, I’d grade Scott’s budget as a C-minus. Not enough transformation, insufficient vision, too much same-old-same-old. Will the Legislature carve out a package of their own? That takes a ton of work, and lawmakers have virtually no resources compared with the executive branch. Legislative budget writers usually start with the governor’s plan and make adjustments off of that. They don’t start from scratch.
But it’d be a shame if our Democratic Legislature didn’t pursue a less piecemeal, more transformational investment program for our soon-to-disappear Scrooge McDuck roomful of money, The governor got one thing absolutely right: This is a unique opportunity to make game-changing investments in making our state a better place to work — and to live. I hope we can do better than the governor’s somewhat limited vision.