"Scribblings" - An Occasional Newsletter from the Legislature  
By Rep. Thomas F. Koch, Barre Town

"Kum-ba-ya, m’ lord, kum-ba-ya…."  Oh what a love fest we’ve been having in Montpelier!  Will it last?  I’d like to think so, but I’m not holding my breath.

First, Gov. Douglas, Lt. Gov. Dubie, Speaker Smith, and President Pro-tem Shumlin stood side by side on Tuesday and presented the results of a study of the operations of state government with recommendations that are supposed to save $38 million in the coming fiscal year and $72 million the following year.

Then on Wednesday, legislative leaders called a news conference to announce that they had agreed that legislators should take a five percent pay cut, from $636 to $604 per week.  They said they wanted to demonstrate the seriousness of the state’s current financial crisis. 

And again on Wednesday, the House voted to postpone until May 28, 2010 a vote on overriding the governor’s veto of an ill-advised bill last year that dealt with the Entergy Vermont nuclear plant.  Because the legislature will most likely have adjourned by May 28, the effect of the postponement is to assure that there will be no attempt to override the veto.

On the surface, things look warm and fuzzy.  But even if the smiles should continue, it might pay to look at the substance of these issues.

In the face of a projected $150 million deficit in the coming fiscal year, a special legislative committee over the summer examined ways the state government might do a better job with less money.  Their 40-page report, titled "Challenges for Change: Results for Vermonters," describes eight "challenges" designed to deliver better results while saving $38 million in Fiscal Year 2011 and $72 million in FY 2012.

The idea is to set goals, appropriate fewer dollars, apply "new kinds of thinking to the specific areas involved," demand rapid planning to implement changes, provide "committed leadership," provide "support from the Governor and the General Assembly," and "refrain from engaging in efforts to give credit or attach blame."  The concept is wonderful; the details are woefully lacking.

Here’s a brief summary of the challenges:

• Designate select units of state government as "charter units," which will agree in writing to be responsible for improving results while spending less.  In return, they will be exempt from "many bureaucratic requirements." 
• Improve state contracting by negotiating with vendors to reduce price, reduce red tape, and pay for results instead of mere effort, thus saving 3.5% in FY11 and 10% in FY12.
• Reform the judicial branch of government.  A separate study was done on this, resulting in recommendations to save $1.2 million, mostly by reducing the number of probate courts from 14 to 5 and by eliminating the judicial functions of side judges.
• Redesign the Human Services Agency to provide a "client-centric, integrated system" that moves from providing benefits from numerous separate entitlement programs to developing a global family budget, with government assistance, that is designed to lead to family self-sufficiency.  Redesign systems to eliminate disincentives to working, and make the entire system more integrated and user-friendly.  Reduce corrections system costs by providing lower cost alternatives for non-violent offenders and public inebriates, increasing substance abuse treatment, and creating 200 new beds for transition housing.
• Rather than consolidating school districts, which runs into opposition based on the concept of local control, simply reduce administration and governance.  Limit the amount the state will reimburse for administrative expenses, negotiate teacher contracts on a regional or statewide basis, revise procurement procedures, and make each Vermont school a charter school, each with a specific mission.
• Revise special education programs by reducing paperwork and by simply refusing to pay what seem to be excessive costs.
• Increase compliance with state regulations and save money by streamlining processes, being more friendly to those subject to regulation, and by providing consumer advocates to guide consumers through the regulatory process.  Combine the Natural Resources Board with the Environmental Court.
• Consider economic development as "an overall outcome," develop a strategy to identify measurable results, "invest strategically," fund programs that best leverage identified strategies to obtain desired results, and measure results.

I can’t deny that some of these are good ideas.  The problem is that we’ve seen them before.  In 2000, I was a member of the Health and Welfare Committee that developed welfare reform legislation centered on the concept of a "family development plan" to help families achieve "self-sufficiency."  In 2002, as chair of the Health and Welfare Committee, (and ever since) I championed increased funds for substance abuse prevention and treatment. As chair of the Health and Welfare Committee in 2003, I led the legislative effort to reorganize the Human Services Agency in a manner that would break down "silos" and create a "client-centered" system.  As a member of the Corrections and Institutions Committee in 2008, I participated in efforts to provide lower-cost alternatives to incarceration.  Many of these ideas are good, but they have been considered, approved, and tried before.  How are we going to wring $38 million more out of the system?

One of the proposals—combining the benefits of many different programs into a single family-centered budget—makes a lot of sense.  But it may depend on obtaining waivers of numerous federal regulations, and I’m not sure that the federal agencies involved even have the authority to grant the waivers that would be needed.  And if the agencies have the authority, experience tells us that a waiver from the Department of Health and Human Services, for example, typically takes two years to from application to approval, even if it is a "no-brainer, win-win" proposal!

So what of the "Challenges for Change" report?  Is it worthless?  Should it be discarded?  That’s not what I’m saying.  Many of the ideas are worth pursuing, and if past efforts have not been pronounced to be resounding successes, perhaps greater success can be achieved with renewed efforts.  But a bit of realism is also in order.  Can we really save $38 million in FY2011 and $72 million in FY2012?  I hope so.  But if so, why haven’t we done so before?  And if not, what does that say about our impending $150 million deficit?

So much for the first topic.  What about the legislative pay "cut"?

Let’s look at what has really happened.  On July 1, 2008, state employees making more than $60,000 per year were made to take a 5% pay cut.  Legislators were not included, purportedly because if you multiply our weekly salary by 52 weeks, you get a figure that is well below $60,000.  Instead, legislators got a raise from $614 to $625, and when an amendment was offered last year to take a legislative pay cut of 5%, the majority voted it down.  Then on July 1, 2009, we got another raise—from $625 to $636—a cumulative increase in just over a year of 3.6%.  Now we come along in a kumbaya moment and take a 5% cut!  But realistically, if you take June 30, 2008 as a baseline rather than January 2010, the cut is only 1.4%.

Last year, I and quite a number of other members felt that we could not ask other people to take pay cuts if we were not willing to do so ourselves, and we took voluntary cuts in various amounts.  In my case, I declined the pay raise (from $614 to $625) that took effect on July 1, 2008, and then I took a 5% reduction, resulting in a pay rate of $583 per week.  So as far as I’m concerned, Wednesday’s grand announcement of a pay "cut" from $636 to $604 amounts to a pay raise—not a cut.  I intend to maintain my previous rate of $583, because I believe that the entire legislature should have taken this step last year. Accepting a 3.6% raise before taking a 5% cut doesn’t really "share the pain."

Finally, the Entergy Vermont Yankee issue.  The bill the governor vetoed last spring is dead; the real fight will come on Entergy’s effort to extend the nuclear plant’s operating license for another 20 years. 

Vermont is the only state in the Union where the legislature has inserted itself into the licensing or relicensing of a nuclear energy plant.  Without legislative permission, a nuclear plant cannot operate in Vermont.  But the legislature will not really decide whether Vermont Yankee may or may not continue to operate for another 20 years.  What we will decide is whether the Public Service Board will be allowed to make that decision.  And that is a significant difference.

We have established processes to decide contested public utility cases.  The Public Service Board is a three-member board appointed by the governor and confirmed by the Senate, which has special qualifications and experience with public power and utility issues.  The board is appointed to act in a judicial-like capacity, finding facts after formally hearing the evidence, applying the law to the facts it has found to be true, and ultimately determining whether granting the applicant’s petition is or is not in the "public good."   An applicant and other interested parties, both pro and con, present their cases before the Public Service Board.  The public is formally represented by the Public Service Department.  Eventually, the PSB makes its decision.  But in the case of licensing or relicensing a nuclear plant, the PSB is prohibited from making a decision—for or against the applicant—unless the legislature flashes the PSB a green light.

So what, one might ask, does the legislature really know about nuclear plants?  What special expertise do the 150 members of the House and 30 members of the Senate have?  Why should the legislature hold the ace of trump, to play or not to play at will?  I would argue that we have no such expertise, and that we should not be involved in the process in the manner that we are.  Forty-nine other legislatures have seen fit to respect established processes; only the Vermont legislature thinks it is the repository of all wisdom.

I trust that the established process will work to the benefit of all Vermonters if we allow it to, and for that reason, I am prepared to vote to get out of the way and allow the PSB to do the job it was appointed to do.  However, I am not naïve enough to believe things will be that simple, and by the time we get to a vote on Vermont Yankee—if we get to a vote on Vermont Yankee—the kumbaya moments of this opening week will be a distant memory.

Rep. Thomas F. Koch represents Barre Town in the Vermont State Legislature