• Smart investments for results
    October 20,2013
     

    “Having to trim budgets is not a tragedy unless it is used as an excuse for turning away from responsibility. We cannot and will not set lower standards for the education of our children, for the health of the population, for assistance to the troubled, jobless or homeless, or for the protection of the environment.”

    So spoke Republican Gov. Richard Snelling in 1991. Facing a recession and a 25 percent budget shortfall — $400 million in today’s dollars — he understood that the state’s budget and tax policies reflect Vermonters’ values and needs: not just education or homeless services, but also safe communities, reliable transportation and communications infrastructure, and an efficient court system.

    So he worked with a Democratic-controlled Legislature, temporarily raising taxes on top earners, while making budget cuts, to ensure that the state didn’t compromise those values.

    Separate from the values it reflects, Snelling’s statement reveals his management approach: Manage to results. By starting with a commitment to standards, his job and that of his budget staff was to balance the state budget without compromising the state’s standards.

    This approach stands in marked contrast to the one adopted by Governors Douglas and Shumlin over the last decade. Managing to results has been replaced by managing to the money, which focuses on spending only the money that is available at current tax rates even if it means failing to meet essential state goals or compromising the state’s standards.

    Snelling understood that the state needed to make smart investments to get results — and it needed to monitor those results to see how smartly it was investing. That’s why the Human Services Agency, for example, tracked indicators — such as the poverty rate, median household income, and teen pregnancies — and published an annual Vermont Well-Being report to show whether taxpayers’ investments were producing results.

    Unfortunately, since Snelling’s time, Vermont has moved away from this thinking toward a narrow focus on low costs. While this may seem fiscally responsible, it fails to consider either what Vermonters need or the consequences of failing to address those needs. In some cases, less state spending means greater costs to Vermonters: poorly maintained roads lead to more car repairs. Other times it means reduced state help — fuel assistance, housing, health care — when people need it most.

    When the Great Recession hit, Gov. Douglas noted that families were cutting back, businesses were cutting back, so government had to cut back, too. His administration published the last Vermont Well-Being report in 2006 and cut the researchers who monitored how effectively the state was spending its money. It was as if they no longer wanted to know.

    The Shumlin administration has continued Douglas’ approach. This year, it is set to propose another budget that manages to the money. Instructions issued late last month to state agencies request level-funded budgets: “Elimination and/or reductions to ongoing programs may be necessary.” Does this mean elimination even if the program is necessary?

    Such an approach does not lead to long-term economic security or prosperity. Nor does it aim for the high standards that Vermonters expect and are proud of.

    Our state budget and tax system reflects our values and goals. If we hold the priorities Snelling articulated — education, a healthy population, a clean environment, and help for the needy — as well as vibrant downtowns, good roads and safe communities, we must start the budget conversation with those aims in mind.

    For our economy to prosper — and bring all Vermonters along with it — we need to set our standards high and make smart investments, not only to maintain them, but even to surpass them.



    Paul A. Cillo is president of Public Assets Institute in Montpelier (www.publicassets.org).

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