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

Shapleigh "Shap" Smith, Jr. of Morristown was unanimously elected Speaker of the House at the opening of the legislature on Wednesday.  Forty-three years old, married and father of two young children, Shap is in his fourth term as a member of the House.  In his "real life," he is a lawyer with the prestigious Burlington firm of Dinse, Knapp & McAndrew.

In his previous three terms, Shap has served on the committee on Fish, Wildlife, and Water Resources and the committee on Ways and Means.  Generally viewed as a relatively moderate Democrat, he has not been known for speaking a lot on the floor or for seeking publicity for himself.  In some ways, he might be seen as a dark horse for the speakership, but there is general agreement that he is a good choice for the job.

Shap got off to a quick start on Wednesday.  His acceptance speech began by expressing his thanks and affection for those who have supported him in his legislative career, particularly his family, and his love for Vermont.  He emphasized our responsibility as legislators to take actions today that will make Vermont a better place for our children in the future.  Then he dropped the bombshells. 

First, the speaker proposed a $150 million economic stimulus program for Vermont, without waiting for whatever Congress decides to do on the federal level.  He provided no real details, but he promised that the details will be in the bill to be considered as a first order of business by the appropriate committees of the House.

Second, in an unprecedented move, he proceeded to appoint committees on the first morning of the session!  Normally, committees are appointed at the beginning of the second week of the session—next Tuesday.  It was rumored that Shap wanted to get this essential task accomplished by this Friday; and I do recall when Speaker Mike Obuchowski surprised everyone in 1997 by making committee assignments on the afternoon of the first day.  But never before have I heard of a Speaker making committee assignments as part of his acceptance speech!  Undoubtedly, this move was intended to give the message that this legislature will get down to work immediately, take care of business, and get out of town.  As we say in church: "Amen!  Let it be so!"

All the buzz is about economic stimulus packages.  President-elect Obama would like Congress to deliver an economic stimulus bill to his desk by the end of January; the cost estimates range from $750 billion to over one trillion dollars.  Now Shap Smith has proposed a Vermont package in the amount of $150 million.  In general terms, both plans are intended to create jobs and build infrastructure: roads and bridges, health technology, educational facilities, and the like.  The thinking is that there are many qualifying projects "in the pipeline" and ready to go as soon as appropriate funding is found.  These economic stimulus packages are intended to provide that funding.

Before we get too far down the road with these packages, however, we need to take a close look at some of the questions these proposals raise.

Are there really a lot of highway and bridge construction projects in the pipeline just waiting for funding?  I understand that there are a lot of potential projects, but many of them have unresolved issues.  One prominent senator has seen a tentative list of projects that are "ready to go" and has expressed disappointment with the list.  Many of the projects have legal, right-of-way, regulatory permit, and other issues and are not good candidates for immediate construction.  We need to be precise in identifying the projects that will be completed with economic stimulus money, rather than just throwing money into the mill and hoping that something good will come out the other end.

Are Vermonters going to get the jobs created by these projects, or will the jobs go to out-of-staters?  If we suddenly have a rush of projects ready for funding and construction, do we have enough Vermont workers?  These are not unskilled labor jobs; you don’t just go down to the nearest unemployment office and hire everyone who is looking for a job and put them on heavy equipment building our roads and bridges.

There is an assumption that all construction firms are hungry for work and that competitive bidding in such and environment will lead to very favorable costs for the state as purchaser of goods and services.  However, suddenly releasing a large amount of money into the economy with instructions to spend it rapidly in order to stimulate the economy has the effect of both increasing the money supply and increasing the demand for goods and services.  If I understand the law of supply and demand correctly, that does not result in decreasing prices.  Before we all get "stimulus package mania," we need to do some serious economic analysis.

And then there is the not-so-small matter of paying for all of this.  In the case of the federal government, the plan is simple—run the printing presses faster.  The federal government is the only institution that can print money without getting prosecuted for counterfeiting, and Congress seems intent on using that authority.  But unless there is real substance behind the paper money, it is the generations that come after us who will have to provide that substance.

For the states, it’s not so simple.  States do not have authority to print money—thank goodness!!  States just borrow by floating bonds.  Bonds are something our children and grandchildren will have to pay off.  So in both cases, we are borrowing today to buy ourselves out of a problem that was created in large part by borrowing too much in the first place.  The wisdom of such action remains to be seen.

Perhaps these stimulus packages make sense, are needed, and will leave us in better shape in the future.  But before we rush headlong over the cliff, driven by the demons of hope and group-think, we need to take a long, hard, realistic look at the economic consequences of these proposals. 

The financial pressures on the state have caused pay cuts to be ordered for all exempt (not protected by a union contract) state employees who earn more than $60,000.00 per year.  Last May, the legislature ordered that those employees forgo their customary cost-of-living adjustment.  Last month, the joint fiscal committee, which deals with these matters when the full legislature is not in session, went further and ordered an actual five percent reduction in salary for these same employees.

In both instances, legislative salaries were not affected.  The reasoning was that if you calculate legislative pay on an annualized basis, it comes to less than $60,000.00.  There’s a word for such reasoning: wrong.

I believe strongly that if the legislature is asking—indeed, ordering—any state employees to take pay cuts in order to help balance the budget, then legislators should take the same cuts.  Wednesday morning’s headline in the Times Argus read "Lawmakers ponder taking a pay cut."  I have already done my own "pondering," and last week I asked the Department of Budget and Finance to reduce my legislative salary in the same proportion as other employees have been reduced, until further notice.  It won’t do much to solve the state’s financial woes, but what it will do is let me follow the advice my father always gave me: "put your money where your mouth is."

Yesterday afternoon Governor Douglas delivered his fourth inaugural address, this time amid the worst economic conditions we have seen in decades.  In it, he took on numerous sacred cows, and the opposition to his proposals—some of which have yet to be seen in detail—quickly formed.  An analysis of the governor’s proposals in this issue of "Scribblings," which is already approaching its maximum four-page format, is not possible.  Perhaps next time.  But perhaps by that time, media coverage will have made a further report on the address old news.  Who knows?

For now, suffice it to say that the governor raised many of the same issues that I heard from Barre Town residents while campaigning last fall: property taxes, education costs, Act 250, jobs, and the economy in general.  There are no easy solutions, but the governor has properly put the issues—and some suggested solutions—before the legislature, and it is up to us to take these matters seriously.