ov. James Douglas proposed a sweeping overhaul of human services as the centerpiece of the budget he unveiled before the Legislature on Tuesday. He also proposed higher property taxes for middle-income Vermonters while holding the line on higher income taxes.

In his eighth and final year as governor, Douglas is facing a fiscal crisis that he likened to the Great Flood of 1927, a disaster that washed away roads, bridges, and railroads and left much of the state in ruins. He recalled the words of President Coolidge, who remarked on the state's "splendid recovery" following the flood, which left the state in some ways in better condition than before.

Douglas hopes to set Vermont on a path that will leave it in better condition after the Great Recession, and to do so he hopes to bring state spending down to sustainable levels. He has decided to spread the burden broadly among Vermonters who depend on human services, rather than by targeting specific groups. The greatest failing of his proposal is that, contrary to what he suggested, there is a specific group that he has targeted, not for cuts, but for protection. He has sealed off well-to-do Vermonters from having to share the burden that he has asked low- and moderate-income Vermonters to take up.

The Legislature faces a daunting task in winnowing through $53 million in human service cuts that Douglas has proposed. These cuts are on top of the $37.8 million that he and members of the Legislature have identified as savings from new efficiencies in the delivery of human services.

The cuts include the elimination of more than 20 grants to programs assisting, among others, seniors and young people. They include tighter eligibility requirements and income and asset tests, tougher treatment of welfare recipients through the Reach Up program, cuts in home health reimbursements, higher premiums and deductibles in health care programs. Deductibles in the Catamount Health program would rise from $250 to $1,200.

Many of these changes may be necessary. Members of the Legislature will have to harden their hearts a little bit to trim expenditures where they can be trimmed.

And yet in the context of the numerous cuts in health care and services to the elderly and the poor, it is noteworthy that Douglas continues to hold the line against any increase in the income tax, which is the most progressive source of revenue available to the state.

It is also noteworthy that as he holds the line on new taxes on the wealthy, he has asked middle-income taxpayers to pay higher property taxes. He would achieve this by raising the percentage of income that could be tapped for school property taxes for households earning between $60,000 and $90,000.

The property tax system contains provisions making tax payments sensitive to the income levels of the taxpayers, which makes it like an income tax. By raising the percentage of income that is taxable, Douglas would raise taxes on middle-income taxpayers. It is like an income tax, but a non-progressive one. It is as if he is bending over backwards to protect the rich.

Douglas incorporates within his budget changes in the pension system proposed by Treasurer Jeb Spaulding, a reasonable decision, even if the state's teachers don't like the idea. Douglas also proposes shifting the teachers' retirement program to the Education Fund over four years, heaping another new burden on property tax payers. He suggests that voters could offset that burden by following his advice for reforming education: reducing the number of teachers and staff.

It is worth looking at the impact on property tax payers of shifting the retirement program, but lawmakers must be careful not to undermine education in Vermont by shifting enormous new burdens to the schools. Other states have ruined their schools in the name of fiscal rectitude.

Douglas preserves many worthy priorities, such as higher education, telecommunications, pollution control and information technology. He indirectly targets one of his bugaboos by urging consolidation of the state's housing programs. He continues to urge targeted tax cuts at a time when the state can least afford to sacrifice revenue.

The Legislature has now received a blueprint that will require some revision, but it is a blueprint that takes seriously the economic challenge facing the state. The Legislature will have to be serious, too.