Editor’s note: Jon Margolis is VTDigger’s political columnist.
The Shumlin administration presented legislators with a Chinese menu of a Fiscal Year 2014 budget, asking them to choose items from Columns A, B or C to finance transportation, health care, and other programs.
In this case, though, some of the items were blank spaces. And no successful Chinese restaurant could offer such bland fare.
Bland, in state government, is not always bad. The policies outlined in Gov. Peter Shumlin’s 29-minute budget speech were neither unenlightened nor unimaginative.
They were, however, largely uninspired, which could explain the unenthusiastic reaction from the lawmakers, whose occasional applause seemed more dutiful than enthusiastic.
Perhaps that was because the legislators understood that the governor wanted them to make some of the hard decisions without any specific recommendation from his administration.
To fill a $36.5 million shortfall in the Transportation Fund, for instance, the governor proposed … well, not quite nothing, but close. He pledged to “partner” with the Legislature to solve the problem.
The problem will be solved the only way it can be solved, by some kind of tax or fee increase, probably either on gasoline or auto registration or some combination thereof.
“I think that’s not off the table,” said Administration Secretary Jeb Spaulding when asked whether a gas tax increase was likely.
There’s really no option. Not coming up with the money would be expensive; the state would have to send some $40 million in transportation money back to the federal government, “not a smart way to continue the progress we have made,” said Shumlin.
But when a governor proposes a tax increase, he becomes politically responsible for it. Since voters don’t like to pay higher taxes, it makes sense for a governor to share the responsibility with others. This way, he hopes, voters who don’t want to pay the higher taxes will be angry at the Legislature instead of (or at least in addition to) him.
The administration employed a similar tactic in announcing new details on its long-term and controversial effort to create a universal health care system by 2017. The health care announcement was not part of the budget proposal for the next fiscal year (which begins July 1), but was a separate statement by health care officials.
“The administration is not asking the legislature to endorse a specific financing plan this session,” the officials said in a prepared statement. Instead, they said they would present lawmakers with several options to fund the proposed new Green Mountain Care.
Here again the administration avoids the potential politic problem that comes whenever anyone puts forth a detailed proposal, especially on something as complicated as health care. The policy outcome could be beneficial, too. Director of Health Care Reform Robin Lunge and Mark Larson, the commissioner of Health Care Access, said they hoped the suggestions they planned to make public last night would start a “conversation” among policy makers about the best way to finance the new health care system.
However it was financed, they said, it would cost Vermonters less than they now pay for health care, largely because the federal government would pay for more of it.
The governor’s budget message had at least one off-beat innovation and two proposals all but guaranteed to anger some of his own supporters.
The innovation was the suggestion to levy a tax on “break-open tickets.” At least it was an innovation to the many listeners who had never before heard of a break-open ticket, a variation of a scratch-off lottery ticket, mostly sold in bars and social clubs. At least some of the profits go to charities or nonprofit institutions such as libraries. A 10 percent tax on the tickets, Shumlin said, could raise $17 million a year to help lower-income people “weatherize,” their homes, improving insulation so that they would burn less fuel.
The suggestion did not sit will with Sen. David Zuckerman, a Progressive from Hinesburg, who saw it as one of three proposed tax hikes or spending cuts that would cost low-income Vermonters some $40,000.
The other two, he said, were diverting $17 million from the state’s add-on to the federal Earned Income Tax Credit and saving $6 million by limiting Reach Up (welfare) recipients to leave three consecutive years and five aggregate years of benefits.
Shumlin had put forth the EITC proposal in his inauguration speech earlier this month. The Reach Up plan was new, and the reaction to it was predictable. House Republican Leader Don Turner of Milton called it “positive.” A woman who had once been on welfare herself called it “brutal,” and a few liberal lawmakers and lobbyists grumbled that Shumlin sounded almost like former President Ronald Reagan denouncing “welfare queens” riding around in their Cadillacs.
That is decidedly not the governor’s attitude, said Agency of Human Resources Secretary Doug Racine, whose liberal credentials are hard to challenge, and who pointed out that even under Shumlin’s proposal, the Reach Up budget would rise by $1.9 million to $36.9 million.
Racine said there are 6,478 Reach Up recipients in the state, almost all of them single women with children, about 1,300 of whom could be affected by the proposed limits. Many of them have gotten jobs over the years, but have had to quit them, usually because they could not find safe care for their young children. For them, Racine said, the state plans to spend more money, enhancing the child care system so the mothers could stay on the job and off welfare.
Others, Racine said, “belong in some other program,” such as the Federal Supplemental Security Income (SSI) system. They would be removed from Reach Up, but not dropped from all public assistance.
But some of the Reach Up recipients, he said, “need more incentive” to find and hold jobs. The suggestion, he said, came from the Reach Up managers in his agency’s regional offices, all of whom felt that the women themselves would benefit from the limits. There is, he said, a “middle ground” between assuming most welfare recipients are unnecessarily sponging off the taxpayers and refusing the believe that some are not looking as hard as they can to find and keep jobs.
The proposal also fits with what appears to be the Shumlin administration’s conviction that nothing holds back Vermont economic growth more than “disincentives for people to go back to work,” as Spaulding put it in briefing reporters on the budget.
No doubt there are such disincentives. Elementary economics, though, teaches the lesson that like the rest of the country, Vermont’s economy suffers most from insufficient demand for goods and services. Were there more demand, there would be more jobs, perhaps with higher wages and better benefits. Who knows? That could provide enough incentive to get most of those mothers into jobs and off Reach Up.
