Category Archives: Budget

Phil Scott draws a line in the sand

Of course, “a line in the sand” is the easiest thing to erase.

Last Friday on VPR’s “Vermont Edition,” Gov. Phil Scott asserted that Vermont faces a $70-80 million budget shortfall.

Err, well, not quite.

What he actually said was, Vermont “maybe” faces what “could” be a gap of $70-80 million between revenue and spending. And those weren’t the only qualifiers. In fact, if you read a transcript of his remarks, you might wonder what he actually meant to say. (Part of Scott’s charm, and his political appeal, is that if you listen to him long enough you’re almost certain to hear something you can agree with.)

As far as I can recall, this is the first time Scott has made this claim, which seems to be a gauntlet thrown at the legislature’s feet. It’s familiar and politically attractive ground for the Republican governor, who has to deal with a restless base (and a conservative challenger) in the 2020 primary. Being tough on the budget is Scott’s best tactic for shoring up the base — and for drawing a distinction between himself and those evil, big-spending Democrats and their endless appetite for raising taxes.

That’s a joke, by the way. The Dems may be fiscally looser than the Repubs, but they are about as far as you can get from Tax-And-Spend Libertines as you can get. Just ask any of the four money committee chairs.

But let’s get back to the governor’s remarks. (NOTE: All transcripts are mine, and are as accurate as I could get. I left out the stammers and false starts, which were quite numerous. The gov wasn’t on his A-Game.) Start with this… um… not-a-sentence.

We’re seeing a lot of pressures, maybe even creating a $70-80 million gap between what we’re taking in and, if all remains the same, that we would feel.

I listened to this passage several times, and that’s what I heard. Let’s leave aside the disconnect between the beginning and the ending, and focus on the “maybe even creating” part. He’s not claiming an actual $70-80M gap; he’s saying that budgetary pressures could, at worst, create such a gap.

Continue reading

Checking in on the new guy

So, how’s it goin’ down Phil Scott way?

For starters, he still hasn’t decided what he means by his core budgeting principle, that he would oppose any state budget that grows faster than wages or the state economy. April B. McCullum of the Burlington Free Press:

Scott has yet to settle on the formula he will use to measure the economy and limit state spending: Tax revenue? Gross state product? Median household income? Some combination?

Just a reminder, we’re almosttot the halfway mark between his election and his inauguration. And there’s some holidays between now and then.

Which also applies to naming a cabinet and staffing an entire administration, where he continues to fall further and further behind the pace set by Peter Shumlin in 2010, and which he’s apparently in no hurry to do. Neal Goswami of the Vermont Press Bureau:

Since winning the governor’s office on Nov. 8, Scott, a Republican, has appointed four people to serve on his staff. But top-level cabinet positions remain unfilled. Six years ago, outgoing Democratic Gov. Peter Shumlin named several such appointees within a couple of weeks of his election.

… “When you have hundreds, literally hundreds of applications, it takes a little time and I don’t want to leave anything on the table. I want to make sure that we fully, fully take a look at their backgrounds, what they could bring to the table … and talent is very, very important,” Scott said.

Good to know talent is important. I was hoping the next cabinet wouldn’t feature Larry, Darryl and Darryl.

And the idea of open auditions for cabinet posts is certainly small-D democratic at its core, but wouldn’t it make sense for an incoming governor to have a few ideas going in? Maybe have a small team do some pre-election planning, even?

If they’re truly starting from scratch with piles and piles of applications, well, sheesh. I’ve never been elected governor of anything (although I am the captain of my kitchen), but I’d have a pretty good notion of the people I’d want at the top levels of my hypothetical administration.

Oh, and here’s a little tidbit that somebody might have thought to mention before Election Day, courtesy April B.

Outgoing Gov. Peter Shumlin, a Democrat, claimed this week that his administration already “righted the ship,” and that during his tenure the state budget grew less than the growth in Vermont’s gross state product.

An analysis by the Legislature’s Joint Fiscal Office showed state spending exceeded gains in Vermont’s gross domestic product in fiscal years 2012-14, but in recent years state spending has grown more slowly than the economy.

Well, gee whillikers, what do you know. State spending grew in the wake of a killer recession and Tropical Storm Irene, and was then brought under control in Shumlin’s final two years.

Which means what? Phil Scott’s mantra about the reckless spending increases of the past six years was nothing more than a politically motivated piece of accounting fakery?

Er, yeah.

How about that.

If that had ever been mentioned before now, I missed it. (And I’m sure whoever reported it will promptly correct me.)

(And I’ll ask them why they never fact-checked Candidate Scott on his alleged factoid.

In any case, one of these days Phil Scott will have to stop running for governor and start actually, y’know, governing.

Philpuckey

There’s a particular kind of statement unique to the candidacy of Phil Scott, which has attempted to combine budgetary discipline with expressions of concern for the problems faced by “hardworking Vermonters” (copyright pending).

That effort to square two circles has resulted in a phenomenon I call “Philpuckey” after the great Rachel Maddow’s use of “bullpuckey” when she doesn’t want to say the S-word on the teevee.

You can tell when you’re about to receive a load of Philpuckey. His voice slows down a beat, his face gets that open-and-honest look designed to soften the hard edges of Republicanism, and he expresses concern for suffering Vermonters and how we must help them. His voice has a painstaking tone, as if he’s explaining an abstract idea to a preschooler.

There is, of course, a big fat “but” in the offing. As in, “But my first concern is the affordability crisis.”

He may be earnestly concerned, but won’t spend a single dime to address it. He’ll just suffer his concern — for our sake.

It’s kind of like seeing a begger on the street, pausing in front of him, shaking his hand, wishing him all the best, and walking on without putting anything in the hat. Noble sentiment, unsupported by action.

Continue reading

Phil Scott Makes Tax Cut Plan Somewhat Less Awful

It hasn’t been that long since Phil Scott unveiled his glossy 39-page economic plan, but he’s already acknowledging one major mistake.

As the Vermont Press Bureau’s Neal Goswami reported over the weekend, Scott’s plan to cut capital gains taxes was based on Vermont’s old tax formula. As a result, the Scott campaign has watered down its cap-gains proposal.

Details in a moment. But first, let’s just put this out there:

[Cutting the capital gains tax] would spur tax shelters, generate little new saving, give a windfall to the wealthy, and make long-term budget problems even worse.

That’s from the commie-pinkos at the Brookings Institution. There’s plenty where that came from; the consensus among experts (not employed by the Cato Institute and other right-wing policy shops) is that capital gains tax cuts are, at best, a grossly inefficient way to spur economic growth. At worst, they’re a pointless squandering of resources.

But let’s return to Phil Scott’s plan, before and after. This will get into the weeds of tax policy, so my apologies in advance. I’ll try to keep things simple.

Vermont used to allow taxpayers to exclude 40 percent of their capital gains. That was killed in 2009, in favor of an exclusion for the first $2,500 in capital gains. The change was designed to concentrate the tax benefits at lower income levels; whether you got $2,500 in capital gains or $2,500,000, you got the same tax break.

Scott’s original plan would have restored the 40 percent exclusion.

Continue reading

Another batch of lies from the Koch factory

The black sheep of Vermont’s journalism family, Vermont Watchdog, took a short break from its incessant anti-renewable campaign and pooped out a single-source article alleging that Vermont is a fiscal disaster.

A new report from a government accounting watchdog group finds that Vermont has a debt of $3.9 billion, despite claims of having a balanced budget.

The Financial State of the States 2015 report, released this month by Chicago-based Truth in Accounting, debunks the myth that states balance their budgets.

Okay, first of all, any “accounting” group that doesn’t know the difference between a balanced budget and long-term indebtedness ought to be drummed out of the bean-counter fraternity. Every large entity, government or private sector, carries a certain amount of debt on its books. Routine.

So, who are these incompetent clowns at “Truth in Accounting”?

Three guesses, and the first two don’t count.

Continue reading

Hey kids! It’s time for Uncle Phil’s Funny Math!!!

So far, our political media has seen fit to abdicate its responsibility to fact-check the gubernatorial campaign. Instead, it has simply reported without comment the cornucopia of questionable numbers endlessly repeated by Phil Scott.

I do give ‘em credit for reporting Scott’s frequent non-answers and failures to give specifics on his own damn policy proposals. But they need to go farther. Especially since the Scott campaign has apparently decided not to respond to my own inquiries for substantiation.

Some of Scott’s figgers need a better man than I to assess, me not being a budget expert. But others are so transparently phony that even a muggle like me can see through them.

In this post, I’ll sometimes stand on the shoulders of Vermont’s number-one budget expert, Private Citizen* Doug Hoffer. In the absence of any oversight by the media, Hoffer has begun a projected series of essays examining Phil Scott’s favorite numbers.

*He’s also State Auditor, but he’s writing these pieces outside the auspices of his elected position.

First, let’s take Phil Scott’s constant claim that taxes and fees have risen by $700 million during the past six years of Democratic governance. Team Scott has failed to provide any documentation, but there is a little something in his economic plan.

Continue reading

A bad session for Shumlin, but all was not lost

The media postmortems on Legislature ’16 are rolling in, and they’re not kind to Governor Shumlin.

The Burlington Free Press’ Sunday front page has a big ol’ photo of the Guv looking nonplussed, the bright lights showcasing the furrows on his brow, with a headline reading “BIG REQUESTS FALL SHORT.” The story emphasizes his pushes for legalized marijuana and divestment from some fossil fuel stocks, which both fell short.

Over at VTDigger, the headline slyly referred to Shumlin’s legislative accomplishments as “nothing burgers,” a phrase destined for his headstone. The story, by ol’ buddy Mark Johnson, was just shy of devastating.

While the governor touted numerous accomplishments in his final late-night adjournment address — and some lawmakers did too — many who serve in the Legislature saw something different this session: a once powerful chief executive weakened by a close election, who lost support on the left when he dropped plans for a single-payer health care system, was hurt by ongoing problems with the health care exchange and then saw any remaining leverage dissipate when he announced last year that he would not seek re-election.

Indeed, Shumlin’s 2016 agenda was largely jettisoned by lawmakers. But there is another way to look at the just-concluded session. It accomplished quite a few things that went almost unnoticed in Vermont, but would have been big news almost anywhere else.

Continue reading

Triangulatin’ Tim

Congratulations to Tim Ashe, chair of the Senate Finance Committee, for shepherding this year’s tax bill to the Senate floor. He managed to find some new money for the budget while keeping true to the intention he stated earlier this week:

“In terms of the major tax areas, my goal is not to have the Senate need to go to those sources,” Ashe said.

The final package emerging from Senate Finance and Appropriations:

The lion’s share of the Senate’s revenue package is generated by the miscellaneous fee bill. The Senate version removes an increase in the employer assessment for uninsured workers, as well as a hike in bank taxes.

The latter two were passed by the House.

My congratulations are tempered with confusion, however. Ashe’s goal would be sensible and reasonable if he were a centrist Democrat in the mold of John Campbell or Dick Mazza, not a Progressive who now lists himself as a D slash P.

Continue reading

Budget Kabuki

The Vermont House passed a budget this week. Pretty quick and pretty painless, considering the state’s fiscal situation. Lawmakers found money in a lot of places that won’t directly impact working Vermonters’ take-home pay.

Much of the new revenue comes from raising fees on registration of mutual funds. That’s a minuscule line item in funds’ expenses, so the actual effect on The People will be negligible at most. Ditto with an increase in registration fees for large banks. In general, the House found ways to prop up necessary state programs with some fairly reasonable tax and fee hikes. Mostly fees.

Republicans, of course didn’t see it that way. There were the usual, utterly predictable cries of outrage that are repeated every time a tax or fee is increased — even when a fee hike simply reflects the impact of inflation. (Fees are fixed; if you don’t raise ’em occasionally, you’re narrowing your revenue stream.) It doesn’t help Republicans’ credibility when every single revenue enhancement, no matter how small, is a punishing blow to struggling Vermonters and a mortal threat to the economy.

This time, there were loud laments over being shut out of the process. Which, first of all, c’mon. When the Republicans ruled this roost for over a century, how much credence did they give to Democratic ideas? When state lawmakers in Kansas or Oklahoma or Michigan or any other state with a Republican majority sets policy, do you think they allow Democrats to have a fair say?

Of course not. Shoe’s on the other foot, guys. Suck it up.

House Minority Leader (and Chief Budget Scold) Don Turner presented an additional argument this time.

Continue reading

The budget mess, again

One of the annual features of the Shumlin Era is the battle to close a budget gap*. There are reasons for this: the rising costs of (1) operating a government (mostly health care), (2) operating public schools (mostly health care), and providing social services (mostly health care).

*To be fair, it was also a feature of the Douglas Era, but the dynamic was different: Republican governor versus Democratic legislature. 

And then there’s the revenue side. Vermont is suffering from a creaky tax system that doesn’t reflect current economic realities, and is bringing in less and less money over time.

The Legislature is now in the throes of dealing with Budget Gap 2016, which has many of the features of past editions. Cries of doom, unexpected revenue upgrades, patently unworkable/unpopular money-raising ideas from Shumlin’s crack policy staff, and lawmakers trying to find alternatives. This year, we also have a significant difference between administration and Legislature over the size of the budget gap; per VTDigger, House budget writers say the administration omitted more than $9 million in basic government operations from its proposed budget…

…including a pay increase for state workers (estimated at $2 million to $6 million, depending on the results of a fact finder’s report and ongoing contract negotiations), pay increases for child care and direct care workers ($1 million each), and funding for the Low Income Home Energy Assistance Program ($4 million).

Shumlin’s modest proposals for new spending have already been killed by the House Appropriations Committee, whose first priority is closing the gap between current obligations and state revenue.

It’s a depressing Rite of Mud Season that has drained the energy of the Democratic caucus, party, and electorate.

Continue reading