Fast start for Vermont Legislature
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By Louis Porter Vermont Press Bureau - Published: January 12, 2009
MONTPELIER – It was one of the fastest starts to a two-year Legislative chapter in recent times. By noon of the first day last week the heads of the House and Senate had been chosen, new House committees had been picked and new Speaker of the House, Shap Smith of Morristown, had proposed $120 million in new bonding for a massive state jobs package that could total $150 million.
By the end of the week Gov. James Douglas had offered his own vision of the year to come, including proposals to demolish the state's school funding system and largely remodel land use and permitting law, which would effectively end or rewrite two of the best known statutes in Vermont, Act 60 (as revised by Act 68) and Act 250.
But for all that it was new, it was old again. Beyond the hopeful talk of working together and ending gridlock, Democrats in the Legislature and the Republican governor, while offering large proposals, did so from familiar corners.
Democrats proposed new spending, using state and federal borrowed money. Gov. Douglas proposed cutting government spending, on a scale and in place not seriously considered in the past.
The responses were familiar as well. Douglas said he would not consider raising taxes – some form of revenue, perhaps a gas tax, would be needed to float Smith's bonding proposal. In essence the governor said that although more cuts will be made in General Fund spending, Democrats must join him in looking to cut in the other two-thirds of state spending – public education and Medicaid.
In the past legislators have shot down his ideas for school funding changes, so he is proposing doing away with the status quo, then working with them to create an alternative, Douglas said.
Democrats said Douglas was using the state's fiscal challenges to impose limits on school funding from the top down, rather than by letting local voters make their will known on school budgets. And the so-called "two vote" provision passed last year (and fought for by the governor) should be given a chance to work before new changes to school funding should be considered.
Finally, the governor should not propose a radical change to school spending – even one that would last just one year – without offering an alternative, they said.
Legislative leaders and the governor do agree that the stumbling economy and the state's fiscal future will be the main focus of the lawmaking session, which Senate President Pro Tem Peter Shumlin has said will be limited to 16 weeks (18 are budgeted).
"The discussion about how to balance a lean state budget will consume the greater part of this biennium and appropriately so," Douglas said in his inaugural speech.
Smith meanwhile added economic development to the name of the House Commerce Committee. What might seem a minor point is still a signal to House Republicans, who had asked for a specialized economic development committee given the state's tough times.
It is not completely clear how tough those times will be on those who pay for and benefit from state services, and while they will fare better in Vermont than many states, the effect on both groups will likely be severe.
After several rounds of budget cuts for the current fiscal year there remains a $40 million problem – revenues are declining, but demand is not. That may get worse this week when new revenue estimates come out, and is likely to get worse in April when the final revenue picture for the fiscal year (which ends in June) is made clear.
Those who deal with the state budget are already bracing for that April revenue projection to require much of the $60 million or more in "rainy day" reserve funds which will be used to prevent a deficit.
And legislators and administration officials now have to write the budget for the next fiscal year, in which there may be less money than the state spent in 2006. Given inflation, not to mention increased demand when every day seems to bring another layoff announcement, that means significantly less money in real terms. The budget gap between current spending and expected revenues may be $150 million or more.
The possible solutions to the fiscal gap are being called by some in the Statehouse the "five fingers" – reserve funds, taxes, cutting, federal funds and borrowing.
Given the size of the fiscal problem and the likelihood of increased demand for state assistance, it's likely every "finger" may need to be counted on.
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