“Scribblings”: An Occasional Newsletter from the Legislature 
By Rep. Thomas F. Koch, Barre Town

Quite a few people have mentioned to me that they have not received a copy of “Scribblings” recently and wonder if I have taken them off the distribution list.  No, I’m just late in getting the first “Scribblings’ out this year, because I’ve been busy with other concerns.

I need to pay tribute to two Vermonters, one a native, one originally a flatlander.  The reason I have been late writing this first issue of “Scribblings” is that I had to deal first with the illness and then death of my father, Elmer Koch.  Originally from New Jersey, he moved to Barre Town in 1978 and took up things that occupy Vermonters’ time—participation in community, field sports, agriculture, and the like.  He served as Barre Town Constable for 21 years; he served on the Barre Town Cemetery Commission; he shot several deer on our land; and he built a sugar shack and won the blue ribbon for Best of Show for maple syrup in the 1992 Vermont Farm Show.  Last month, at the age of 90, he was still out on his tractor, plowing snow, and driving up into the woods to to look for trees to cut for next year’s firewood.  But his age caught up with him, and in mid-December, he began to have serious respiratory problems.  He was hospitalized the day after Christmas, and on January 8, we had to let him go.  Hospital visitations and funeral arrangements took priority, and some legislative concerns, like writing “Scribblings,” went to the back burner.  A Jerseyite by birth, he was a Vermonter in spirit, and I will miss him.

I also lost another friend this week.  Rep. Cola Hudson of Lyndonville died Sunday afternoon at the age of 81.  He was pure Vermonter—honest, direct, sparse with words, intelligent, and dedicated to leaving Vermont in better condition because he had passed this way.  He was the janitor in the local school in Lyndonville.  In 1972, the people elected him to the legislature, and he served continuously until this past Sunday.   He never forgot his working-class origins, and he never forgot the children he served, both as a janitor and as a legislator.  He was definitely “old school;” his values were traditional, and he had an abiding sense of right and wrong.  But he was also able to understand complicated bills and the intricacies of government policy.  He was an uncommon champion of the common Vermonter.  I can only wish that we could have a couple dozen more people like him in the legislature!  He was a good friend, and I will miss him as well.

The new year starts with financial red flags flying all over the place.  The Emergency Board held its regular January meeting last week and emerged with its consensus fiscal forecast.  Briefly summarized, the economic conditions being seen around the nation and the world are not leaving Vermont unscathed.  When Fiscal Year 2008 ends on June 30, there may be a general fund surplus of $15 million or so.  But after that, general fund revenues level off for the next several years.  Unfortunately, the state’s obligations do not level off, and we are quickly looking at a deficit for FY 2009 of proportions yet unknown.  Furthermore, these projections relate only to the general fund; the transportation fund is in far worse shape, and the fish and wildlife fund has suffered from declining revenues for several years.

Rep. Martha Heath, chair of the House Appropriations Committee, has described all of this as “sobering.”  One might hope, then, that the legislature might be “sober” in its spending plans and priorities.  There are a lot of ideas floating around the statehouse—some good, some not so good, and some that are just plain difficult to assess.  But most of these ideas cost money, and money is something that we simply do not have for the next couple of years.

Take, for example, the Senate’s proposal to expand Catamount Health, allowing small businesses to purchase Catamount instead of traditional commercial health insurance, at a promised 25% premium savings.  Forget, for a moment, the merits of this proposal—whether expansion of the Catamount program is a good or bad idea.  In order to make it work, it needs an infusion of money from the state, and the state simply does not have the money available. And so it is with program after program, proposal after proposal.

So here’s an idea.  Instead of staying in session well into May, looking for money that isn’t there so we can expand existing programs or create new ones, let’s deal with only the essential items of government business, cut the legislative session short by a month or more, and get out of town in mid April at the latest.  That would save just about $1,000,000.00, which could then be spent where it is most needed.

One place money like that could be spent is in helping Vermonters heat their homes during his relatively cold winter, with oil prices up 50% or more over last year’s levels.

The Republican leadership has sponsored a bill to do exactly that—cut the legislative session off a month earlier than planned, and spend the money helping needy Vermonters with their home heating costs.  I have joined as a co-sponsor of this proposal. We will have to wait and see whether the bill receives serious consideration.

In his State of the State address on January 10, Governor Douglas surprised many by proposing (a) elimination of favorable treatment of capital gains income for income tax purposes, and (b) reduction of the basic income tax rates on earned income.  There may be some merit to this proposal, but there are also a number of problems that need to be considered.

The governor’s proposal was intended to be revenue-neutral: increase the tax rate on some forms of income, reduce the tax rate on other forms, and keep the total tax revenues the same as they would have been without these changes.  But in view of the revenue problem discussed above, one must consider the possibility that the majority in the legislature might agree to raise the tax rate on capital gains, without reducing the tax rates on other forms of income, thereby effectively raising taxes.

And what is to prevent the legislature from “restructuring” the tax rates so as to give some favored classes of taxpayers a larger break than others?

Although the governor intended to hit “coupon clippers” with his proposal, it would also jeopardize farmers, timber harvesters, and other Vermonters who sell capital assets, such as land or a second home.

In short, there are many pitfalls awaiting this proposal, and it needs long, hard look before it ever gets adopted into law.