It Was All So Easy Back Then

I dunno, sounds like socialism

There is still much more to be written about the Scott administration’s VERAP mess. (Whether our ever-diminishing political press will cover it or not, we’ll see. Anyone filed a public records request yet? Bueller? Bueller? Anyone?)

What’s clear so far is that the administration somehow failed to discover that the emergency rental assistance program was running out of money until drastic action was required to prevent it from going immediately bust. Or possibly they discovered it earlier and covered it up until it was too late for anything other than emergency action. (That’s what a public records request could determine. Bueller?)

But there’s another whole dimension to this situation, and it has to do with the perils of bounty. Remember way back in 2021 and 2022, when Vermont was (metaphorically) flooded with federal Covid relief funds? Yeah, those were good times.

And what happens in good times? Prudence is abandoned. Abundance seems endless even when you know damn well it’s not. Policymakers in the administration, with buy-in from the Legislature, made a bunch of choices about how to spend all that money.

In retrospect, some of those choices look awfully unwise.

Let’s first stipulate that when the administration and Legislature were spending all that money, they (presumably) didn’t know that the U.S. Treasury was going to change the rules for the rental assistance program in a way that forced the state to spend it down more quickly than planned. (The rules were changed, per VTDigger, “in the spring,” which is not terribly specific. But even if you say it happened on June 19, the administration managed to go two-plus months without realizing what was happening to the VERAP books. If it happened on March 22, well, that’s a real cockup.)

But still, choices were made. Longer-term “investments” were prioritized over improvements in the social safety net. A lot of money was put into business, workforce, and economic development programs that had less to do with pandemic recovery than with using federal largesse to fulfill policymakers’ dreams. Housing was a priority, but not the kind of housing that would meet emergency needs or immediately mitigate the rental crisis we’re undergoing.

Jut this spring, perhaps even after the Treasury changed its rules (public records request, anyone?), Scott was asking the Legislature to put another $40 million into the kind of business incentives he’d already expanded more than once with federal Covid relief funds. And the Legislature acceded because those incentive programs are catnip to Democratic pols as well as Republicans.

Here’s one bit of interesting language from a $10.6 million appropriation. The bill originally specified that money should go to “transformational projects” that would encourage “capital investments and economic growth.” Somewhere late in the process, all the words quoted above were struck through.

What took their place? The language was broadened: “to retain and expand existing businesses and nonprofit organizations, attract new businesses and nonprofit organizations.”

“Retain” opens the door to economic-development blackmail á la Keurig Green Mountain, which garnered millions in state funding (to preserve jobs) even as it repeatedly cut its Vermont operations. (See also: IBM/GlobalFoundries.) “Expand” sounds nice, but is meaningless in practice. Many a program has a “but for” component: a project would not have happened “but for” the state assistance.

But even the people in charge of the programs acknowledge that “but for” is impossible to prove. There’s no way of knowing if the state is investing in something that wouldn’t happen otherwise, or in something a business would have done even if it had to pay full freight.

Those who read The Collected Works of Doug Hoffer, Auditor of Accounts are familiar with these ideas. But his findings are inconvenient to policymakers and thus routinely ignored. See: His November 2021 audit (downloadable here) which found that Covid relief awards were given to some ineligible businesses and some awards increased profitability instead of redressing financial harm.

But let’s put all of that aside. If we knew then what we know now, which is that more than 8,400 households will lose their rental and utility assistance just as winter is upon us, would we have put more money into rental assistance? I’d like to think so. Which again returns us to the question of “What did the administration know and when did they know it?” (Bueller?)

We should not let the Legislature off the hook, either. Democrats are just about as fond of business giveaways as are Republicans. Acceding to Scott’s requests was, from their point of view, not a tough call.

Not at the time, anyway.

Another point. When the business climate has pretty much returned to pre-pandemic levels, why are we continuing to throw money at private enterprise? It’s the workers who are caught in a vise between sub-livable-wage jobs and sky-high rents, not business owners. The greatest suffering for businesses is a workforce shortage which can be attributed, in large part, to workers who can’t find affordable housing.

You won’t fix that with business incentives.

Granted, emergency assistance is a band-aid and we need comprehensive solutions. But the sudden cutoff of aid, because of administration incompetence or duplicity (those are the only two choices), just as winter approaches, is cruel.

From this point of view, it sure looks like we could have made better use of the now-receding flood of federal aid. And those most at risk are going to pay the heaviest price.

2 thoughts on “It Was All So Easy Back Then

  1. Walter Carpenter

    “The greatest suffering for businesses is a workforce shortage which can be attributed, in large part, to workers who can’t find affordable housing.”

    It’s not just the housing, but the low wages or sub-par wages, that we working folks are hardly treated as little more than economic resources, that tens of thousands of jobs in Vermont (millions elsewhere) offer no health care, retirement plans, and so on. Why bother to work if your making the money and the taxes for the businesses and the state’s tax coffers, gets you little but poverty in return?

    Reply

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