Shumlin’s first year

Governor Peter Shumlin. VTD/Josh Larkin

When Gov. Peter Shumlin took office a year ago, after triumphing over four Democratic rivals in a tough primary and narrowly beating his Republican rival in a bruising General Election fight, it was unclear how the former senator from Putney would fare as the state’s chief executive officer.

How would he deal with his former Democratic rivals? How would he manage his team of savvy new commissioners? What kind of relationship would he have with the Legislature, his erstwhile stomping grounds? Could he shift from his shoot-from-the-hip style to the gravitas of governor? Would he make good on his campaign promises for reforms in health care, corrections and energy, or shove them under a rug? Would he carry on the fiscal policies of his predecessor, Republican Gov. Jim Douglas, and steer the economy in the same direction? How would he rise to the unanticipated challenges of the state’s biggest natural disaster in 84 years?

And given the highly personal nature of the governor’s relationship to Vermonters, how would Shumlin overcome his high personal negativity poll ratings during the campaign and help constituents feel comfortable with their new governor and his ambitious agenda?

VTDigger.org interviewed more than a dozen Statehouse mavens – lobbyists, lawmakers, advocates and political observers from a range of political persuasions and with a wide range of policy interests – for their perspectives on the governor’s performance in his first year in office.

There was broad agreement among the majority of these observers that Shumlin should get high marks for his handling of Tropical Storm Irene and the economy. They praised his Cabinet picks and his management of state government particularly during the post-Irene crisis.

They especially admire Shumlin’s political shrewdness. Shumlin has made a point of surrounding himself with smart and capable people, and the new governor hired on all but one of his four Democratic political rivals for posts in his Cabinet. He also brought a potential contender – Republican Lt. Gov. Phil Scott – into the fold as an honorary member of the team.
Kevin Ellis, a lobbyist and an unabashed, long-term supporter of the governor, said Shumlin is a “supremely confident man.”

“Only a person like that would hire his primary opponents,” Ellis said. “Most politicians even if they were advised that that was a good thing to do wouldn’t have done it because of ego. … He does not care about that. This guy is not threatened by anybody.”

Shumlin’s strong team and steely focus on a rigorous agenda of reform and fiscal discipline enabled him to adeptly sidestep potshots from the left and the right on tax and budget policy questions during the last legislative session, and he’ll likely triumph again on that score this year as he continues to insist on no new taxes, foiling the Progressives, and confounding Republicans who have been reduced to parsing the meaning of “broad-based” taxes (an increase in provider taxes, they say, is a broad-based tax). In the last session, Shumlin was accused of taking a page from Douglas’ don’t-tax-more, spend-less playbook.

This tack gave moderates some comfort as the new governor pursued controversial reforms of the medical industry and the renewable energy sector that satisfied his critics on the left. His team pushed through a groundbreaking plan for a single-payer health care system. Shumlin continued to call for the shutdown of Vermont Yankee, the state’s sole nuclear power plant, and he aggressively supported continued funding for solar tax credits.

Shumlin also took cues from his successful Republican predecessor’s approach to retail politics. He spent more time on the road meeting with Vermonters — small and large business owners, nonprofit leaders, advocates and constituents — than he did in his office last year. Shumlin effectively runs the state from his SUV most of the time, and he is in constant contact with his staff via cell phone. (He knows the dead spots along the highway by heart.) After Irene, the governor ran the roads incessantly, meeting with victims of the storm in the dozens of affected communities in central and southern Vermont.

If Vermonters didn’t know who Shumlin was before (he spent tens of thousands of dollars on TV advertising during the campaign to develop name recognition in Chittenden County), they do now.

And the overwhelming majority of Vermonters recently polled by Smith Johnson Research like what he’s doing. According to the Sacramento, Calif.-firm, 68.6 percent of the 400 randomly selected Vermonters who responded to the “baseline” survey in November approved (53.2 percent) or strongly approved (15.4 percent) of Shumlin’s performance in office. Just six months prior, Public Policy Polling pegged his approval rating at 45 percent.

Read the survey from Smith Johnson

An emergency buoys a new governor

Shumlin gets high marks from political observers, too. His response to Irene, which amounted to a constant emergency vigil that went on for several months, earned him the high regard of political allies and foes alike. The governor was on the scene immediately and rallied his staff and state workers to achieve a near full recovery from the emergency in just four months.

The governor operated under “an almost impossible set of circumstances” in his first year in office, according to Darren Allen, a former reporter for the Vermont Press Bureau who is now the spokesman for the Vermont-NEA.

His handling of Irene was as good as it possibly could have been, Allen said. “The fact that the state is poised to be fully open … is nothing short of incredible, and he deserves credit for that.”

Popular Republican Phil Scott, who in 2010 handily won the lieutenant governor post, also praised Shumlin’s response to the state’s biggest natural disaster since the Flood of 1927.

“In terms of Irene, I think he did a good job with that,” Scott said. “I think everyone put their best foot forward and did the right things for the right reasons. They were very reactive. I thought it was beneficial to appoint Neale Lunderville (a Republican who worked for Douglas) as the Irene czar to do something like that. It was beneficial to the governor, but also it says a lot about his willingness to listen to all sides and recognize that people — even those of other political parties — are important and I thought that was a good move on his part.”

Peter Shumlin and Phil Scott. Photo by Terry J. Allen

Scott also appreciates Shumlin’s offer to include him in Cabinet meetings, press conferences and policy decisions around the Irene recovery.

“We’ve been very close and Irene has dominated a lot of our discussions,” Scott said. “He’s given me more of a voice than he would have to. We don’t agree on everything, and I don’t think anyone expected that. I think he’s treated me with respect and alerted me when he’s leaving and going to be away and I’ve appreciated that.”

Shumlin meets with Dick Mazza on a weekly basis during the legislative session, and the senator from Colchester says he finds the governor open to suggestions. “From my perspective, and I’m not favoring him because of party, all round he’s a very hard worker,” Mazza said. “He’s comparable to Jim Douglas. He works seven days a week and if he takes a couple of vacations, certainly he’s earned it.”

Grade A governor?

Though most of the sources interviewed for this story were wary about issuing grades, per se, a few had no such qualms.

Andrew MacLean, a partner with MacLean, Meehan and Rice, a prominent lobbying firm in Montpelier that has a number of high-profile corporate accounts, including Entergy Corp. in the past, gives Shumlin a solid A.

“I think he’s done a good job,” MacLean said. “I think he’s made some pretty good appointments, and I think some of the concerns people had haven’t been realized. I think he’s been pretty good on tax issues and permit issues.”

Shumlin’s steady stance on issues is impressive, MacLean said. “I think he’s pretty sure about where he wants to go,” the lobbyist said. “He changes politically, but by and large I think he’s been pretty consistent.”

House Speaker Shap Smith, a Democrat who worked closely with Shumlin when he served as Pro Tempore of the Senate, gives the governor strong marks, but he declined to cite a letter grade. “If I gave him an A people will complain, if I gave him a B+ he’d complain,” Smith said.

“I thought the governor worked well with the Legislature,” Smith said. “I thought he handled the aftermath of Irene exceptionally well, and I think he most importantly put good people in positions to develop policy.”

Retired Middlebury political science professor Eric Davis gave Shumlin an A-. The governor generally had a successful first year in office, Davis said, and he deserves credit for moving his campaign initiatives forward and for rising to the challenge of Irene. The governor’s performance was marred slightly, Davis said, by the PR response to reporters’ questions about his vacation to Dominica last February. Shumlin left his security detail behind, and his press liaison, Bianca Slota, who has since left the administration, said she didn’t know where the governor was. Davis said the governor learned from that experience that he needed “tighter control of communications staff.”

Ellis, of KSE Partners, went so far as to compare Shumlin with President John F. Kennedy in the post-Eisenhower era.

“I compare the Shumlin-Douglas handoff to the Eisenhower handoff to Kennedy,” Ellis said. “Douglas was not an innovator, he was a good mechanic. Peter Shumlin is Vermont’s Bill Clinton. He’s creative, innovative, exciting and he’s really, really smart. This is a guy who knows what he wants to do. He knows what the bottom line of any political deal is five steps ahead of everybody else.”

Pat McDonald, chair of the Vermont GOP, says Shumlin has created an atmosphere of “uncertainty and confusion, particularly in the areas of health care, energy and taxes (most recently property taxes).”

“There is a real concern about ‘what is next,’ ” McDonald wrote in an email. “He has made so many promises that at some point if he delivers on all of them – the question then become, who pays? It is surprising to me that for someone who won both the primary and general elections by such a small margin that he has gone so far over to the left. I truly believe that most Vermonters are moderate, common sense people who would want to see this State get back to the middle. They want a clear, predictable vision and some sense of growth and opportunity going forward.”

Big tests lie ahead

The governor has put his key campaign pledges in motion – he got lawmakers to adopt legislation that paved the way for his single-payer health care initiative and broadband expansion projects, and his administration has advanced an aggressive energy conservation and renewable plan for transportation, heating and electricity in Vermont.

In 2011, the Shumlin administration put policies in motion that aren’t going to take effect until after the 2012 election. The governor won’t release details of the financing system for his universal health care program until November of this year. Similarly, his pledge to expand broadband to every community in Vermont won’t be realized until 2013.

Davis said Shumlin made good progress on the broadband and health care initiatives, but “the real test in those areas isn’t going to come for several years down the road,” when attainment of those goals is evident (or not).

So far, Shumlin’s “war on recidivism” to curb the growth of corrections costs hasn’t resulted in the large reduction in spending on the state’s prisons that was anticipated. The total cost of housing prisoners in and out of state and running the state’s probation and parole programs was $142 million in fiscal year 2011, up from $133 million in 2010, according to Department of Corrections Facts and Figures Fiscal Year 2011. An additional 190 prisoners have been lodged in correctional facilities outside Vermont in 2011 because of an increase in court detentions and other factors. Though Andy Pallito, commissioner of the Department of Corrections, said that the number of out of state beds has declined since 2005, and his goal is to push the number, which is now at about 520 to the 300s over the next 18 months. The total number of incarcerated Vermonters has remained at around 2,100 over the last three years. Lawmakers are considering new initiatives that would divert drug offenders into substance abuse programs to alleviate the problem, and Shumlin is expected to release a plan to curb prescription drug abuse.

Governor Peter Shumlin. VTD/Josh Larkin

Irene, too, will continue to test the governor’s mettle, Davis said. Several persistent long-term problems emerged in the aftermath of the storm, including developing a replacement facility for the Vermont State Hospital, which has been a policy morass for nearly 10 years because of disputes between mental health advocates, providers and the state over the best treatment options for psychiatric patients. The Waterbury state office complex, which housed 1,500 state workers and was badly damaged by the flood, has to be replaced and there are conflicting opinions about which central Vermont community should be the nexus for state government.

The lieutenant governor says ultimately the Legislature will decide, but he’d like to see the state put “quite a few” employees back in Waterbury.

“I also think Barre is putting a good plan forward,” Scott said. “Barre could use a shot in the arm and by putting a few hundred employees there would be helpful. I don’t think anyone would concede that Waterbury was going to get everything back … there’s a solution that would benefit everyone involved.”

Post-Irene, the lack of affordable housing in Vermont will also be an issue that dogs the administration, Davis said. Several hundred Vermont households that lived in mobile home parks lost everything in the Irene floodwaters and had nowhere to go. The ongoing crisis points up, as Davis put it, the “real challenge involving low-income housing in rural Vermont.”

Mixed reviews on single-payer

Professor William Hsiao, a Harvard health care economist, said last year that the program would produce savings of $500 million in the first year through payment system efficiencies. In his proposal, he suggested it could be financed with a payroll tax that would amount to about 14 percent, split between employers and workers. The Shumlin administration quickly distanced itself from this notion and has been playing defense ever since on how the system, which would provide care for all Vermonters, will be paid for.

Businesses, the Vermont GOP and conservative groups are rattled by the uncertainty about the financing of the plan, which they say could place a heavier burden on employers.

“The more they hear about it, the more uncertain they are about what’s it going to cost and how they are going to pay for it,” MacLean said.

Single-payer advocates, on the other hand, are delighted with the governor’s health care reforms.

Peter Sterling, executive director of the Vermont Campaign for Health Care Security Education Fund, says Shumlin has fulfilled his campaign promise “setting Vermont on a path to getting access to affordable coverage” through Act 48 (the enabling legislation for the single-payer plan) and the federal Affordable Care Act.

“If there’s one thing I feel I’m a little disappointed about, it’s that he hasn’t been as accessible as I’d hoped,” Sterling said.

Shumlin and his staff didn’t respond to several requests for a meeting with Sterling and a broad coalition of advocates, physicians and academics who sought an audience with the governor to explain their sugar-sweetened beverage tax proposal. Sterling said the surcharge on soda and other beverages would help to prevent childhood obesity. He compared the health impact of the tax proposal on sweetened drinks to cigarette taxes.

“The only way to lower consumption and stop obesity is to make it too costly to drink,” Sterling said.

Senator says Shumlin’s budget priorities are amiss

Though Sen. Anthony Pollina, D/P-Washington, is happy with Shumlin’s single-payer plan, he is disappointed with the governor’s tax and budget policies.

“His economic policy looks a lot like Jim Douglas’ policy,” Pollina said. “We wrote a budget in the Jim Douglas tradition (last year). We cut human services, raised fees (on health care providers) and the administration opposed making the wealthy give up a little of their tax cuts (from the federal government).

“I don’t see what difference is,” Pollina said. “We’re balancing the budget on the backs of the middle class. We’re cutting budgets and letting people get away with tax cuts.”

Sen. Anthony Pollina. VTD file photo by Josh Larkin

Pollina said he sees the recession as more than “a little dip in the economy.” In his view, the downturn is a fundamental change in the structure of the economy that will have an ongoing impact on Vermonters.

Shumlin’s insistence on 4 percent across-the-board budget cuts will cause further economic deterioration for families that are already stressed, he said.

“This administration is doing the same old thing,” Pollina said. “They think if you just cut the budget more we’ll be OK. What we need to do is put more money in the pockets of families.”
Pollina said Shumlin administration officials believe they are protecting businesses and the wealthy. “The thing businesses need more than anything else is customers,” he said. The economy won’t rebound, in his view, “until people have money in pockets to pay their bills” and the state addresses the growing disparity between the rich and the poor by restructuring the tax code.

In the meantime, Pollina said, Vermonters need social programs more than ever. He fears that the administration will try to pay for Irene by cutting other programs. “If so, we’re going to cut ourselves into another hole in terms of what it means for average families,” Pollina said.

Environmental record split

After eight years of ongoing fights over land use and water quality issues with the Republican Douglas administration, environmental groups are relieved to have a Democrat in office who has more of an interest in protecting habitat.

Representatives from the Vermont Natural Resources Council and the Conservation Law Foundation say the Shumlin administration has reinstated important enforcement policies that will have a long-term impact on Lake Champlain and the integrity of state lands.

Brian Shupe, executive director of VNRC, said Shumlin put technically and professionally well-qualified leadership in place at the Agency of Natural Resources. Though Deb Markowitz, the former secretary of state and one of Shumlin’s rivals in the Democratic primary, doesn’t have a strong environmental background, Shupe said she’s “letting professionals do their jobs and that’s an improvement.”

While the Douglas administration unsuccessfully waged a court battle with the Environmental Protection Agency’s mandated limits on phosphorous pollution in Lake Champlain, Markowitz and her team decided to form a cooperative relationship with the federal agency, according to Anthony Iarrapino, a staff attorney with the Conservation Law Foundation. ANR held hearings with the EPA across the state and discussed a cooperative approach to Lake Champlain cleanup.

“That’s a major change,” Iarrapino said. “The governor hasn’t gotten enough credit for turning that relationship around because it was overshadowed by other events.”

Iarrapino also praised the governor for supporting the public participation bill, which passed in the House last year before it got stuck in the Senate. The provision would enable members of the public to submit comments as part of the settlement process between ANR and polluters. The Douglas administration killed the first version of the bill in 2007. Iarrapino said the legislation’s prospects are good in the coming session.

“It’s not all perfect,” Shupe says. His group wasn’t happy with the governor’s veto of the well water testing bill, and he says Shumlin’s messages about river management post-Irene were “unfortunate.”

The governor told reporters in early September that in an effort to expedite the repair of 500 miles of state highways “we flushed the red tape down the river with Irene.” Meanwhile, the agency’s staff river experts gave verbal approval to transportation officials for streambed dredging and channeling that under normal circumstances would have required environmental reviews.

Woodstock, Vt., September 11, 2011 -- Mud, rocks and debris have to be cleared in many rivers and streams throughout Vermont as a result of flooding from tropical storm Irene. FEMA is working to provide assistance to those who were affected by Hurricane Irene. Photo by Angela Drexel

“VTrans deserves a gold star for coordinating with ANR and attempting to address environmental issues in the reconstruction efforts,” Shupe said. “The agency you can excuse to a point — they were homeless. The governor’s rhetoric undermined river policy and river science and that was unfortunate.”

Iarrapino called it a “schizophrenic response” that revealed a tension in the administration between the politically expedient and what staff scientists knew was right.

“One day it’s get the bulldozers and cranes and backhoes in river and dig as much as you can — this is your chance,” Iarrapino said. “The next day, it was we have to respect the lessons science has taught us. You didn’t know what message you were getting one day to next.”

The Shumlin administration was likely surprised, Iarrapino said, by the strong outpouring of concern from fishermen about the manmade disruption created by “the intense manipulation of streams in a desperate but likely fruitless effort to change these streams.”

The Conservation Law Foundation filed an extensive public records request regarding the streambed management post-Irene. There was not a single spreadsheet in the “thousands” of documents Iarrapino reviewed, which he said indicated a system for record-keeping was not in place.

“It’s difficult for citizens’ group and watershed groups to even know where all the work was done and so we’re trying very hard through a broad coalition … to even catalog all the work and damage done,” Iarrapino said. “Until the state has a sense of that, ANR is trying to piece together the information after the fact.”

The Shumlin administration also repealed a rule promulgated by Douglas officials that opened state lands to all-terrain vehicles. Markowitz said the state couldn’t defend the rule because of a pending lawsuit filed by the Conservation Law Foundation. On the other hand, the Shumlin administration says it may have licensing authority to allow for some limited ATV use.

“That is something we will be looking at very seriously because it’s hard to see how an administration can admit it doesn’t have the authority to do something and then purport that it does,” Iarrapino said. “It seems like the door is open for them to quietly reverse that policy.”

A booster for business

On the economic development front, Shumlin has been a tireless booster for Vermont businesses. He has praised the EB-5 business investment program, which has fueled the growth of Jay Peak and Sugarbush ski resorts. He has also made a show of support for local alternative agricultural entrepreneurs who are selling organic and specialty foods.

Tom Torti, president of the Lake Champlain Regional Chamber of Commerce and a former secretary of the Agency of Natural Resources under Douglas, said Shumlin has “met and exceeded any expectation that the business community had.” Though businesspeople don’t like his health care reform proposal, they knew what to expect since he campaigned on the issue.

“From an economic development perspective, this is the best team at commerce (the Agency of Commerce and Community Development) we’ve seen in years and years,” Torti said. “We don’t always agree on issues and policies, but the governor has been consistent from the campaign trail to his administration of the government. From our perspective, predictability and transparency are the coin of the realm, and the governor has been predictable and transparent.”

Torti said a Douglas-friendly group — bankers and finance people – gave Shumlin a big thumbs up after he recently attended a Vermont Economic Development Authority meeting. The buzz afterward, Torti said, was “uniformly positive about his first year.”

Torti is especially impressed by Department of Labor Commissioner Annie Noonan, who has convened meetings with business groups to openly discuss two tricky issues – workers’ compensation and independent contractors. “(She’s) making more progress on that issue than anyone has in years,” Torti said. “His appointments have been just fantastic.”

Rep. Oliver Olsen, left, goes on a test drive of a Chevy Volt with Gov. Peter Shumlin at the wheel at the Grand Opening of Green Mountain Energy in South Londonderry Vermont. Photo courtesy of Fran Janik.

Shumlin has sped up the metabolism of state government “and that’s a good thing,” Ellis said.

“Vermont feels as though it’s stuck in 1949, and that’s really dangerous,” Ellis said. “It could easily become a modern day economic backwater. People feel it’s that way already. Peter is trying to move into a faster future without destroying what makes Vermont a great place to live. It’s a tough balancing act, and I think he’s doing a hell of a job.”

Ellis said Shumlin makes some people nervous and “nervous is good.”

“We need a little fear around here,” Ellis said.

Coasting until Labor Day?

In press conference after press conference, Shumlin has deflected questions about Election Day 2012. Is he raising money or hiring staff? The answer is consistently no. He is too busy running state government, he says, to worry about campaigning right now.

Even questions about whether he will run again are dismissed out of hand. He will, he says, declare his intentions after Labor Day.

Davis, the political scientist from Middlebury, said Shumlin doesn’t have to openly campaign until then. Davis anticipates the governor will declare his intentions after the legislative session, spend the summer raising money quietly and go public in September.

“That’s a reasonable strategy for an incumbent,” Davis said.

The only open question at this point, Davis says, is whether Randy Brock, the Republican candidate for governor who announced in December, will be able to engage in a competitive election and hold Shumlin’s vote count below 55 percent in a two-person race. The big question? “Can Randy Brock get within 10 points?”

MacLean, the lobbyist with MacLean, Meehan and Rice, said it will be interesting to see if Brock can focus the discussion on health care reform, which is a weak spot for Shumlin.
Otherwise, the governor is in a strong political position and will have no difficulty raising campaign money from the business community. The lefties will try to push him on taxes, MacLean said, but he doesn’t expect Shumlin to give in. “He said he was going to be moderate on business issues and I think he has been,” he said.

Davis, too, expects the governor to stick with his right-of-middle stance on fiscal issues.

“Shumlin is in good shape coming in to the end of the year,” Davis said. “He may end up having run-ins with the big “P” Progressives and small “P” Democrats in the Legislature, but it wouldn’t be the worst outcome to be the moderate centrist beset by extreme people on both sides.”

Clarification: Information about the governor’s war on recidivism was clarified at 1:26 p.m. on Jan. 8. While the cost of corrections continues to increase, the total number of out of state beds has declined. The Department of Corrections sought additional funding for 190 bed placements as part of the Budget Adjustment Act.