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. Editorial

The Governor's "Vermont's Way Forward" 
By John McClaughry 

Even his opponents must concede that Gov. Jim Douglas is a master at the podium. Not only is he superb at speechmaking, but he is also politically shrewd. The most recent evidence was last Thursday's inaugural address.

The Governor stood before a chamber heavily dominated by his Democratic opponents. He knew that the leading issue in the voters' minds is the rising burden of property taxes to support public education. Curbing the steady rise of education costs has been a major component of his Affordability Agenda.

He knew, too, that the central issue for the new Senate leader, Sen. Peter Shumlin of Putney is not education costs but, rather amazingly, "global warming". The senator believes that Vermont must take the lead in a program of subsidies, prohibitions, taxes, and mandates, to save the planet for future generations.

So beyond the usual pleasantries about nonpartisan cooperation for results, what to say?

The governor duly noted that Vermonters want property tax relief - but that it cannot come from shifting rising costs onto another tax base, meaning the income tax. He reiterated his request for capping the property tax, but mentioned no specifics beyond somehow "containing costs" 

before quickly passing on to his next subject.

To appease the anti-global warming enthusiasts, the governor recited his active support for the Regional Greenhouse Gas Initiative and his adoption of California auto emissions standards. He vowed to press forward to meet the goal of having 25% renewable-generated electricity by 2025. (We would have that now, but the legislature inexplicably does not count HydroQuebec electricity as "renewable".)

For the purchasers of vehicles getting better than 30 mpg, he proposed to rescind that portion of the vehicle sales and use tax raised in 2003 to finance education. He also proposed to subsidize biodiesel fuel so that people will use it for transportation instead of lower priced petroleum diesel.

The governor again supported the idea of the "Green Valley", proposed a year ago by Lt. Gov. Brian Dubie. He proposed to promote environmental engineering, with the goal of attracting companies into a new Vermont "green industry" cluster. Whether this will require new subsidies to compensate "green" firms for the higher costs imposed by Vermont's combination of business taxes, regulations and mandates, the governor did not say.

Having tarried briefly on the property tax-education issue, thrown several green bones to the anti-global warming enthusiasts, and reiterated his support for the Green Valley, Douglas then launched into his Big Idea: The Vermont Way Forward, making Vermont into a world-class "E(lectronic)-State"

That will require, he said, creating a new Vermont Telecommunications Authority. This government entity will invest the proceeds of up to $40 million in revenue bonds to build wireless towers and fiber optic networks that private enterprise is not now willing to build. Users of the new facilities will pay fees and charges sufficient, one hopes, to pay off the bonds.

Part of the governor's comprehensive proposal calls for streamlining the telecom permitting processes, exempting some towers from Act 250, and giving quick approval for the use of state-controlled buildings 

and rights of way. One wonders, though, whether providing 

state-controlled sites and ending permit process cost and constipation would not by itself spur private companies to expand broadband service throughout the state, without creating a new Authority.

There is always an urge among politicians to find reasons to create new Authorities to cope with issues that the private sector is alleged to be unable to handle. The Vermont Economic Development Authority and the Vermont Housing Finance Agency have been successful by trading on the federal tax exemption for revenue bond interest. The experience of the ill-fated Whey Authority and Health Care Authority should give legislators some pause. So should the embarrassing $28 million debacle of Gov. Dean's Champlain Flyer.

Gov. Douglas is unquestionably right that Vermont's sketchy and inadequate telecommunications service puts this state - and especially its rural areas - at a serious competitive disadvantage. Correcting this situation does require bold action, and the governor deserves credit for dramatically presenting a Big Idea.

By focusing on this important issue, the governor has defined an agenda that the Democratic legislature can hardly refuse to address favorably. In fact, the 2006 Democratic Platform pledges support for "universal broadband services statewide".

If the governor can make this issue expand to become the foremost issue on the legislature's agenda, the more contentious issues, like expanding Catamount Health into a universal single payer system, tapping the Education Fund for universal preschools, and raising the income tax on "the rich" to support more government spending, may drift into the background.

That would be a fine example of the governor's political skill and leadership.

-- John McClaughry is President of the Ethan Allen Institute (www.ethanallen.org)

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