Category Archives: Budget

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

Phil Scott, miracle worker

Phil Scott’s proto-campaign for governor has, so far, been a matter of personality: Phil Scott is the nice-guy leader that Vermonters have been looking for. On the issues, nothing but vague hints and bromides.

Well, he gives it another go in an essay posted on VTDigger.

Sadly, it’s kind of an incoherent mess. He calls for a moratorium on all tax and fee increases, a tight rein on state spending, and expansion of several state programs.

And he claims he can do that “without cutting off services to Vermont’s most vulnerable populations or weakening environmental protections.”

Oh, yeah?

Whatcha got in that basket, Phil? Five loaves and two fishes?

Continue reading

The Chamber’s selective complaint

My neighbor Betsy Bishop, head of the Vermont Chamber of Commerce, is pushing something she calls an “impact list” of all the burdens placed on Vermont businesses in recent years — “as well as those that could be considered in 2016,” which is a big fat asterisk in itself. Given the state’s budget situation, a whole lot of potential revenue enhancers “could be considered.” Almost all of them will never get off the floor. (The carbon tax, already sidelined, is on her list.) Many are mutually exclusive. But all of ‘em, real or imaginary, make the “impact list.”

And, as VTDigger political analyst Jon Margolis points out, more than a third of the Chamber’s list of tax hits from the 2015 session were actually tax increases on affluent Vermonters, not on businesses.

Generally, the Vermont Chamber is a reasonable actor in Vermont politics. It hasn’t followed the rabid conservative path of the national Chamber. But this is a major step into partisanship for the Vermont Chamber.

And as you might suspect, the Chamber’s “impact list” tells only one side of the story. Margolis helpfully recounts many of the ways that public expenditures and tax breaks directly benefit businesses. It’s quite a list. But it’s arguably the tip of the iceberg.

You can make a strong case that most government expenditures benefit business. Infrastructure spending? You can’t do business without it. Education? You need educated workers, and there’s a big emphasis these days on STEM and workforce-oriented two-year programs. Law enforcement? One of its primary missions is protection of property rights.

Continue reading

Can’t we find a Democratic budget expert? Please?

The Shumlin administration is a lame-duck affair. Top staffers have begun to leave, and it’s awfully difficult to hire outsiders for openings that will only last a little more than a year. So, people get promoted from within or shuffled around. I imagine by next summer, the administration will look like a last-place baseball team in mid-September: plenty of scrubs trying to act like major leaguers.

The latest departure: budget chief Jim Reardon. His replacement: prison chief Andy Pallito.

Okay, fine, maybe Pallito is the best person for the job. But he, like Reardon, was a prominent holdover from the Douglas administration. Which brings us to the question above: Can’t we find a Democratic budget expert? Please?

This is of a piece with Democrats relying on Neale Lunderville as their number-one fixit man. Hirings like these reinforce the stereotype that Republicans are serious administrators while Democrats are softies. (This stereotype isn’t actually true, at least not at the national level. Since Jimmy Carter left office, Republican Presidents have done far more to increase the national debt than Democrats.)

Continue reading

Shumlin Gets Ass Handed To Him

Smile, though your heart is breaking...

Smile, though your heart is breaking…

The three top Democratic leaders stood shoulder-to-shoulder, smiled, and proclaimed their unity behind an agreement on taxes and health care. They praised each other and the Legislature for working hard and working together. “Everyone has given a little,” Governor Shumlin said.

Well, almost.

After a week of harsh rhetoric about how “Montpelier” (meaning his own party) had produced a tax plan that he “hated,” he accepted a slightly modified version with nothing more than a fig leaf of additional spending cuts.

After days of harsh rhetoric about how capping income tax deductions would be “a big mistake,” Shumlin accepted a deal with a slightly less restrictive cap than the Legislature had been poised to enact.

The legislature “has given a little.” Shumlin gave a LOT.

Which belies his extreme rhetoric about a plan that was very similar to the one he accepted today, and characterized as “fiscally responsible” and “ensur[ing] that we continue to grow this economy.”

Continue reading

Well, there won’t be a veto.

Lots of standing around and waiting at the Statehouse today. I just finished standing outside the Governor’s ceremonial office for about an hour, and my reward was to see the Big Three — Gov. Shumlin, House Speaker Shap Smith, and Senate President Pro Tem John Campbell come out and announce they’d reached a deal on the tax bill. And the Governor added that “There will be a health care bill.”

They wouldn’t release any details yet, but they did manage to close the remaining gap. And they all looked happy standing shoulder-to-shoulder, less than 24 hours after Shumlin’s tough talk on taxes seemed to portend a veto of his own party’s tax plan.

Well, that won’t happen. And I guess we shouldn’t be surprised. Rhetoric notwithstanding, there’s always a great deal of momentum toward deal-making at this stage. The unusual thing, really, was that the Governor’s plumage displays were aimed at fellow Democrats.

It’ll still be many hours before adjournment; the bills have to be drawn up, they have to clear the House and Senate, and there’ll need to be some suspending of the rules.

But at this point, it seems inevitable that the key bills will move and the Legislature will adjourn today.

Although the definition of “today” might get stretched a little.

Shumlin doubles down on bashing fellow Democrats

If you thought there was a chance that Governor Shumlin would tone down his insistence on last-minute spending cuts, well, think again. Earlier, he’d called two key Senate committee chairs on the ceremonial carpet to argue for tax reductions and spending cuts — in a spending bill that had already passed the Senate Appropriations Committee. This didn’t go over well with Democxratic lawmakers, per Paul Heintz:

Gov. Peter Shumlin’s erstwhile allies in the Democratic legislature lashed out at him Thursday for pushing new cuts after the Senate Appropriations Committee signed off on the budget.

“It’s insulting to the process,” complained one top Dem.

… “It’s been pretty lonely in there all winter,” Sen. Bobby Starr (D-Essex/Orleans) said, referring to the Appropriations Committee, on which he serves. “I woulda thought they would’ve been in at least a month ago, if not five, six weeks ago, offering some suggestions.”

House Majority Leader Sarah Copeland Hanzas noted that the House-passed tax and spending bills actually called for less spending than the Governor’s original budget plan. She called the gubernatorial disconnect “perplexing.”

Welp, the Governor is unbowed by all the pushback.

Continue reading

A new path forward for Peter Shumlin?

Maybe he’s pulling a Tom Salmon, and planning to run as a Republican next year.

Nah, I doubt it. But it’d explain the sudden, aggressive, and decisively centrist re-insertion of himself into legislative debates. At the very last minute. After months of serenely floating above it all, and letting lawmakers shred his proposals to pieces.

The latest comes from VTDigger’s Anne Galloway, who tells us that the top Senators on taxes and spending were yanked into the Governor’s office yesterday afternoon to get an earful of his displeasure with the current budget and tax bills. According to Galloway, he “hates the tax bills from the House and Senate and would prefer to cut more from the budget.”

And:

While it’s the governor’s prerogative to influence the legislative process and ultimately sign or veto the legislation, Shumlin’s down-to-the-wire timing perplexed insiders who say the governor has had four months to influence the budget and tax bills, and has not made a concerted effort to do so until now.

… “Disrespectful” was a word several people used to described Shumlin’s late-game tactics.

He certainly seems to have adopted a scorched-earth approach toward his relationship with the Legislature — after promising, after the 2014 election, an open and collaborative approach. You know. that listening and learning stuff.

Continue reading

Glass half full, glass half empty

There are two ways of looking at the 2015 legislative session so far. Well, two if you’re on the left-of-center side of the political equation. The right, I suppose, is probably in full Ted Cruz “The World Is On Fire” mode.

You can look at it like Progressive Rep. Chris Pearson during last week’s House budget debate, lamenting big cuts to human services: “There have been program cuts every year since I joined the legislature in 2006.”

The glass is half empty. If you’re a liberal or progressive Vermonter, it seems like we’ve been in constant retreat since Peter Shumlin took office. And it got worse after the November election, with conventional wisdom telling us that Republican gains were due to Democratic overreach, the governor abandoning single-payer health care, and Democrats scurrying to the center.

Then there’s the glass-half-full approach. House Ways and Means Committee chair Janet Ancel noted that this year’s tax bill represented the biggest one-year revenue increase in all her years on the committee. And Health Care Committee chair BIll Lippert had this phlegmatic reaction to the rapid diminution of the health care reform bill:

We knew when we put that together it was robust. That was our job, to articulate priorities and how to get there. But I think in the context of the $35 million that was raised on the floor [in the tax bill], and $8 million for the lake [Champlain], if we were so fortunate as to have $20 million for health care, that’s a pretty big appetite for raising revenue in one year. So I would be pleased to have that much dedicated to health care in a year that’s as financially difficult as this.

And, the unspoken corollary: “I won’t be surprised if we get less than $20 million.”

Which leads back to my previous post, “Peter Shumlin: Defender of Liberalism.” If the House is stripping most or all the funding from health care initiatives, we’ll have to depend on the Governor’s political muscle — if he still has any — to get it back.

Anyway, which way do you see it: glass half full or glass half empty?

The current situation has echoes throughout the five-plus-year tenure of Gov. Shumlin. He’s delivered some good stuff, more than many liberals are willing to admit, while keeping the ship afloat in tough budgetary times. Plus, he’s been swimming against three powerful tides: a sluggish recovery which has yet to benefit the middle or working classes, a tax system that has failed to keep up with our changing economy, and the effort to fully fund public-sector pension plans that were revenue-starved by previous administrations. (Lookin’ at you, Tom Pelham.)

On the other hand, many of Shumlin’s promises have been curtailed or abandoned — most notably single payer health care, the issue that arguably won him the 2010 Democratic primary and hence the governorship. Plus, liberal expectations were inflated, fairly or not, possibly both, by the size of the Democratic majority. Shumlin and legislative Democrats never seemed to realize how much political capital they had; and now, much of it is gone, unspent.

And on the other other hand, it’s not as if the last five years have been without accomplishment. And it’s not as if this legislative session will be a failure if we don’t get significant movement on health care reform.

It’ll just kinda feel like one.