Session leaves Ruin in its Wake 
By Randy Brock

Like the end of a lingering hurricane, the Legislature blew out of Montpelier, leaving extensive devastation in its wake.

The Vermont landscape was strewn with a host of new or increased taxes, matched by increases in spending.  Legislation was enacted that likely increases electricity rates, both by mandating above-market purchases of uncompetitive renewable energy and by reneging on the state’s deal with Vermont Yankee.  Property taxpayers are set to be hit with an estimated 6-7% increase because of an unfunded $19.8 million shift of teacher’s pension fund payments from the General Fund.  No wonder most Vermonters are relieved to see this storm pass.

What were they thinking?  At a time in our history in which we are suffering from the most severe recession in almost a century, when we are receiving over $700 million in Federal stimulus money, how can a responsible legislature move to increase taxes and increase spending?  But that is exactly what happened.

Under the budget passed, Vermonters will be required to pay higher income, estate, property and consumption taxes, while overall spending increases by over 3%.  Spending for human services, for example, increases 5.5%, or by some $150 million.

What is most disturbing in all of this is the fact that the legislature has offered no plan and shown no leadership in addressing the long-term fiscal challenge that confronts us.  The Federal stimulus money is short-term, temporary funding.  It was designed to help tide us over and to provide funds to jump-start the economy.  But just in FY10 alone, some $174 million of the stimulus was used to paper over our problem, and to continue to fund activities that are unsustainable when the two year stimulus ends.  In other words, we are putting off dealing with the inevitable for yet another year.

Some hold out hope that many states will do as we have done, and that the Federal government will somehow relent and provide an additional infusion of money two years from now.  But even the Federal government cannot print money endlessly.   Vermont’s fiscal future looks bleak indeed.  The budget shortfall in FY2011 amounts to $67 million and in FY2012 $142 million, according to the Legislative Joint Fiscal Office’s projections, which seem to change daily.  Couple this with the huge unfunded liabilities in our state teachers’ and state employees’ pension funds and we have the makings for a financial disaster.

Although there were a few bright spots in what the General Assembly accomplished this year, these pale in comparison to our failure to make the hard decisions that are necessary to sustain our future.  Just as hardworking Vermonters are tightening their belts to solve their personal financial plight, so our state government should be doing the same.

With the Governor’s announced veto of the budget, we will find ourselves called back to Montpelier.  Once there, we need to make a renewed effort to find a bipartisan solution to our problems.

We can take a number of sound steps toward financial responsibility:

• Reduce the size of state government.  And we can do it thoughtfully and without mass layoffs by adopting measures such as the accelerated retirement program I championed.
• Cut back on the amount of outside contracts.
• Improve the efficiency of government programs by eliminating waste and duplication.
• Halt the purchase of land for conservation, at least until our finances recover.
• Encourage consolidation of scores of non-profits that receive most of their funding from state government.
• Review whether some of our entitlement payments should be more in line with US averages.

Randy Brock
Vermont State Senator, Franklin District