Editor’s note: This article is by Steve Cormier, a senior at Lyndon State College.
Gov. James Douglas used his final budget address to expound on the scale of the state’s fiscal crisis and to propose radical restructuring changes to a number of programs from Medicaid services to affordable housing to the state’s pension systems for retired schoolteachers and government workers.
The state faces a $150 million shortfall in the General Fund budget for fiscal year 2011, and Douglas explained that state revenues would not return to “pre-recession levels” until 2013. The governor said current revenues are, “a staggering $100 million below where they were at the height of the economic bubble in 2008.”
In fiscal year 2010, federal stimulus dollars helped to alleviate the state’s dramatic revenue declines. In fiscal year 2011, Douglas said he is “not counting on additional federal assistance,” adding that if any more money from Washington is sent to Vermont those funds should be used to create a “more effective, efficient and affordable state government.”
Early on in his roughly 40-minute speech to lawmakers in the Vermont House Chamber, Douglas called for systemic reforms and sustainable long-term savings in program expenditures. “We must break free from the dangerous cycle of managing deficits year on end,” Douglas said.
To address the shortfall, Douglas said the state will be required to look at human services, pensions and education as those are the “areas of government that are growing the fastest and consuming the greatest resources.”
Though the recession has led to an increase in the number of Vermonters seeking state aid, Douglas sees a $53 million cut health services and programs for prisoners, the poor and disabled as necessary. He anticipates additional savings through the restructuring of the Agency of Human Services.
“Maintaining coverage for the greatest number of people will mean scaling back benefits for some,” Douglas said about Vermont’s Medicaid program, which he described as “among the most generous in the nation.”
Limits on access to certain medical services, such as emergency room visits, which would be capped at 12 per year and reducing adult dental benefits from $495 per year to $200 per year, could help with the General Fund’s projected shortfall.
Douglas said the pension system for state workers and teachers, too, must be changed.
“Teacher retirement is an education expense, pure and simple,” said Douglas, “and should be borne by the Education Fund,” instead of the General Fund.
The governor would also like to see teachers pay 20 percent of their health care premiums.
Acknowledging that these changes will be controversial, Douglas said, “I’ve seen the alternatives and they are much worse.”
Douglas declared that his proposals would not raise property taxes, and this statement garnered one of the few bursts of applause during his speech.
“Those who attempt to parse my proposals to justify a claim of a tax increase should be reminded that by advocating for the status quo they are, in fact, supporting a $59 million property tax increase,” Douglas warned.
After addressing his suggested changes to health services, pensions and education, Douglas used the remainder of his speech to outline investments in the state’s economy.
“Investments must continue in Vermont’s infrastructure that support existing industries and spur economic growth,” explained Douglas.
He reported to the General Assembly that since 2002, over the course of his administration, $68 million had been “restored” to the Transportation Fund and that more was to come.
“Between this year and next,” Douglas said, “Vermont will spend more than $400 million paving our roads and fixing our bridges – an unprecedented effort,” thanks to a large infusion of federal stimulus funding.
“Our transportation infrastructure is, quite literally, the foundation of our economic prosperity,” said Douglas.
Investing in technological infrastructure, Douglas says, is another action that Vermont cannot afford to ignore.
“I propose $8 million in information technology investments to help streamline state government,” said Douglas.
He said he wants to create a “paperless state government” in which new technologies will allow state employees more time to deliver services and help taxpayers spend less time filling out paperwork.
Although Douglas seeks significant cuts in local education spending, he would like to see an increased investment in Vermont’s institutions of higher education, which he said receive some of the lowest state support in the nation.
“I recommend a base increase for higher education,” said Douglas, “with $5.5 million shared among UVM, the State Colleges and VSAC.”
He would also like to see $2 million for “facility upgrades” and “infrastructure needs” at UVM and the State Colleges. This, along with the base increase, would lead to higher retention rates of qualified students in Vermont, a problem, Douglas said, the state has been facing for a number of years.
Finally Douglas would like to see $1 million set aside for Vermont farmers.
“Ultimately, our agricultural industry requires the federal government to reform the antiquated milk pricing system,” said Douglas, adding that he would continue to support Vermont’s congressional delegation – Senators Patrick Leahy and Bernard Sanders, and Congressman Peter Welch – in their reform efforts in Washington.
As he concluded his last budget address before he leaves office this year, he said of the eight budgets he has proposed, this year’s was his “most challenging by far.” Douglas said the state government’s task is to get Vermont on solid ground for its “post-recession future.”
“Now is not the time to look back and protect the status quo,” concluded Douglas. “From the depths of this Great Recession, we must find the courage to make difficult decisions, act boldly and lead fearlessly.”
