Hits and misses
Toolbox
Published: January 8, 2010
Gov. James Douglas delivered the final State of the State address of his eight years as governor, confronted by the worst economic crisis in a generation. He outlined some constructive steps for addressing the state's staggering budget problems. But after a long and distinguished career of public service, the governor has entered the twilight hour of his career hemmed in by ideology that has narrowed his vision of the possible.
Douglas and the legislative leadership announced important steps two days ago toward achieving as much as $38 million in savings by streamlining the administration of human services. The idea is to coordinate human service programs so that those needing help will be able to access the full array of available services by means of a single "portal" and more sophisticated information technology.
But Vermont faces a General Fund budget shortfall of $150 million, and Douglas outlined no substantive proposals that would bring the state close to closing that gap. Those tough decisions have apparently been reserved for the budget address he will deliver in two weeks.
Instead, Douglas returned to a misguided attack on local education, a misreading of the state's education finance system, and an ideologically rigid insistence on lower taxes.
Douglas's views on taxes are, in some ways, shocking. His reliance on lower taxes as an economic cure-all is reminiscent of the Bush years. Your economy is doing well and revenues are healthy? Then it's time to cut taxes. Your economy is in the pits and revenues are floundering? It's time to cut taxes.
That Douglas is proposing to cut taxes when the state is starving for revenues makes no sense, and yet that is what he is doing. Senate President Pro Tempore Peter Shumlin estimated that Douglas's proposed tax cuts would reduce money available to the state's budget-writers by $28 million. It's a curious way to close a $150 million budget gap.
Douglas devoted a significant portion of his address to the issue of school spending and his continuing attack on local control of education. It is a telling sign of the poverty of his ideas that he devotes so much attention, not to his own responsibilities, but to an arena that is not the business of state government.
Douglas sought to dispel the idea that his proposals are an attack on local control, but he did so by purveying a misconception about the law. He tried to create the impression that voters who benefit from income sensitivity, which limits one's property tax bill according to one's income, have no incentive to restrain school spending. In fact, voters who raise school budgets pay higher taxes, even if they benefit from income sensitivity. But by creating this misimpression, Douglas tried to argue that the law as it exists erodes local control.
In fact, the present system has been a boon to local control. Ask school boards in Rutland, Barre, Springfield, Bennington, or a host of other cities and towns that have benefited from the increased fairness of Acts 60 and 68. They have had control of expanded resources available to improve education and have enjoyed enhanced local control.
Douglas touched on some problems with the present system, such as so-called "phantom" students, who are counted as a way of protecting schools from a precipitous drop in enrollment. And there are probably some savings to be gained with modifications to eligibility for income sensitivity.
But Douglas does the state a disservice by insisting that the education funding system is broken, expending his energy in a fruitless quest for a solution to a nonexistent problem. School boards are paring budgets, laying off teachers as needed, and wrestling with the issue of consolidation.
After Douglas's speech Shumlin mentioned two principles that the Democrats in the Legislature would uphold in the coming session. They would not balance the state budget on the backs of property tax payers. And they would not allow Montpelier to wrest control away from local schools.
That leaves Douglas's education proposals dead on arrival and people on all sides still searching for a resolution to the state's daunting budget problems.
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