Under fire, Racine insists Agency of Human Services is on track

Editor’s note: Morgan True contributed to this story.

Faced with a mounting array of crises, Doug Racine, the secretary of the Agency of Human Services, says the six departments that fall under his purview are on track.

The agency confronts intractable problems that affect Vermonters: drug addiction, homelessness, mental illness, imprisonment, old age and sickness.

But of late the agency has also had to handle multiple public relations crises. Fires burn in several departments, and critics say Racine has not been an effective leader.

The Department of Vermont Health Access has spent $72 million to implement the Affordable Care Act, but Vermont Health Connect, the state’s online health care exchange, is plagued by problems.

The Department for Children and Families is under scrutiny in the aftermath of the deaths of three toddlers who had been in the state’s care. Two of the deaths were ruled homicides.
The department has also been fined repeatedly by the federal government for a high percentage of mistakes made in administration of the food stamps program.

Meanwhile, the agency is also responsible for managing a new state psychiatric hospital and addressing an opiate crisis that affects 3,000 Vermonters.

Racine, who ran against Gov. Peter Shumlin in 2010 in the Democratic primary and was supported by advocates in human services organizations, has been described by critics as an empty suit who is in charge of a bloated agency.

Racine says he purposefully stays above the fray, only ducking in when needed. His focus is not on the child protection and health insurance crises that have been at the center of public controversy. Instead, Racine is bent on reining in agency expenditures.

Spending, however, has gone up over the course of Racine’s tenure.

Overall spending has grown $345 million or 8 percent since FY 2011, according figures Jim Giffin, the CFO for the Agency of Human Services.

Of the 10 sources VTDigger talked to, very few were willing to speak even off the record about Racine’s job performance, citing personal ties. No one would say anything negative about his leadership on the record, however, several knowledgable sources were deeply critical.


In 2011, Racine walked into an agency that was fragmented and demoralized after the Douglas administration laid off employees, consolidated departments and weakened programs, he said. Departments operated in silos even though they served many of the same people.

Several programs failed as staff shrank and the number of people the agency served increased.

“It was a disaster,” Racine said.

Workers at the Eligibility Benefits Center in Waterbury sort through applications.

Workers at the Eligibility Benefits Center in Waterbury sort through applications.

Then Tropical Storm Irene hit, scattering employees across the state. The agency diaspora has made collaboration between departments even more difficult. It will be several more years before workers return to the Waterbury state office complex.

The Agency of Human Services has 3,549 employees, nearly half of the 8,223 employees that make up the executive branch. The agency’s $2.3 billion budget represents about 42 percent of the state’s total expenditures, including federal funds.

Critics say the mammoth size of the agency is problematic.

The Agency of Human Services runs prisons and provides substance abuse treatment programs, health insurance plans, child protection, food stamps, fuel assistance as well as a host of other services. It oversees six departments, including the Department of Disabilities, Aging and Independent Living, the Department of Corrections, the Department of Health, the Department for Children and Families, the Department of Mental Health and the Department of Vermont Health Access.

Racine insists the agency is not bloated.

His interest in efficiency has been interpreted as a euphemism for budget cuts. Nonprofit organizations that work for the agency are particularly concerned about “results-based accountability,” which ties program outcomes to spending.

Christopher Curtis, an attorney with Vermont Legal Aid, is worried about the longterm impacts of repeated attempts to control spending.

“Slogans and calls for efficiency are nice, but at a certain point, without adequate resources, government will cease to function effectively,” Curtis said.

One of those attempts was “Challenges for Change.” In 2010, the Douglas administration and the Vermont Legislature hired consultants to propose cuts and program efficiencies in an effort to address the state’s ongoing budget gap problem.

“It didn’t work. It was a way of saying we’ll cut budgets and nothing bad will happen,” Racine said.

Meanwhile, state spending continues to outstrip tax revenues. The estimated gap for fiscal year 2016 is roughly $70 million.


Most human services programs in Vermont are provided by third-party, local nonprofit organizations with agency contracts.

The government has no idea whether the services provided by the so-called “designated agencies” are effective, Racine said.

David Yacovone, courtesy photo

David Yacovone, courtesy photo

“I can’t tell you what designated agencies are doing well and which ones aren’t doing as well as the others,” he said.

Racine’s goal is to use data as the starting point for understanding what works and what doesn’t. Defining success in the context of human lives is difficult but possible, he said.

“This agency in the past has not been good at measuring,” he said.

To that end, the agency is developing scorecards for outcome assessments in state contracts.

Con Hogan, a former secretary of the agency in the 1990s, said he focused much of his energy on measuring outcomes. The agency would do well to bring back similar initiatives, he said.

Data, however, is difficult to obtain in part because the agency’s computer systems are 40 years old. While the agency is in the planning stages for an overhaul of its 1980s vintage mainframe computer system, known as ACCESS, it will be at least five more years before the new Integrated Eligibility system will function as a one-stop shop for services.

The new system will allow case managers to see what services — food stamps, Mediciad, welfare — a person is eligible to receive.

The idea isn’t new.

Former Rep. Tom Koch, who retired this year after 22 years in the Legislature, spent four years leading the committee that oversaw the AHS reorganization under Gov. Jim Douglas. Even then, the Legislature was trying to make it easier to get services.

“What we tried to do was create a policy of no wrong door,” Koch said.

The Integrated Eligibility project, which is at least 15 years overdue, won’t be complete until 2019. Racine said he doesn’t fault previous administrations for passing the buck.

“We got lucky, frankly, with the 90-10 federal match money,” Racine said. Federal grants will pay for as much as 90 percent of health related IT projects.

Between the feds and the state, Vermont could invest more than $400 million in IT projects over next five years to replace the AHS computer systems and build the infrastructure for a single-payer health care system.

Vermont State Employees Association officials met with Racine last week to discuss concerns about a variety of issues including the agency’s technology problems.

Doug Gibson, a spokesperson for the union, says that VSEA members working in several AHS worksites have been promised new, upgraded and better IT systems for years, but, to date, many are still relying on older, outdated AHS systems.

The systems, he said, “all too often hinder an employee’s ability to provide quality service to the public.”

Gibson said the Economic Services Division has failed in its years-long efforts to modernize IT systems.

State workers say their work is hampered by poorly functioning IT systems that sometimes do not provide timely or accurate information.

As he pushes forward with IT reforms, Racine is also dealing with crisis situations, including the recent deaths of three children who have been part of the state’s child protection program. Racine says he speaks with DCF Commissioner Dave Yacovone three or four times a day.

“I don’t think there is a ‘problem’ in DCF, I don’t think the system is broken, I don’t think the system leads to failures, I think it’s been a very good system. It’s not a perfect system,” he said.

Gov. Peter Shumlin has asked Racine to draft a proposal by Aug. 1 for restructuring the Department of Children and Families.

Yacovone has said he is stretched thin because of ongoing problems with the foodstamps program.

Racine is less involved with Vermont Health Connect, in part because other Shumlin administration officials are working on the glitch-ridden online health insurance exchange.

Mark Larson, the commissioner of the Department of Vermont Health Access, is the public face of the project, while Jeb Spaulding, the secretary of the Agency of Administration, and health care reform leaders Robin Lunge and Lawrence Miller oversee Vermont Health Connect.

Critics say Racine has taken a backseat on health care reform, even though his agency would likely administer the state’s planned universal health care program.

Gov. Peter Shumlin and Peter Sterling, executive director of Vermont Campaign for Health Care Security Education Fund, speak to reporters Thursday in the Cedar Creek Room at the Statehouse. Photo by Alicia Freese/VTDigger

Gov. Peter Shumlin and Peter Sterling, executive director of Vermont Campaign for Health Care Security Education Fund, speak to reporters Thursday in the Cedar Creek Room at the Statehouse. Photo by Alicia Freese/VTDigger

Peter Sterling, executive director of the single-payer advocacy group Vermont Leads, said Racine hasn’t been present at any of his meetings with state officials on the subject.

“I go where I can add value,” Racine said. His worth comes from being “a little bit removed from the day-to-day operations,” Racine said, and from having a different background.

Racine, who makes $124,000 a year as secretary, was a state senator from 1983 to 1992 and 2007 to 2010, and he led the Health and Welfare committee at the end of the Douglas administration.
Racine was lieutenant governor from 1996 to 2002. He is a vice president of Willie Racine’s Jeep, his father’s South Burlington business.

Racine rejects allegations that he has been absent as the agency has faced a range of crises.

“I’m not visible on a day-to-day basis on this, but people do know that I have been involved. Otherwise they wouldn’t be calling for my head,” he said.

Racine pointed to the fact that he attended the press conference in May when Shumlin announced changes at DCF and sent out a press release June 20 about a new boss at the Rutland DCF office.

“I believe there is a trust and a respect out there for me with people who are involved in these issues,” Racine said. “And I hope that it gives some credibility to it. People still know who I am. I spent a lot of money getting my face and name out there in various campaigns. People know who I am. I am responsible, it’s part of this agency and the governor holds me as responsible for what’s going on as he holds the commissioners for what’s going on.”


The agency should develop programs that prevent Vermonters from needing services in the first place, Racine said. He would like to see better prenatal care for mothers and their babies, for example.

“Trying to find that balance between the public’s desire to pay for something and the public’s desire for services, however that’s expressed, is a political balance,” Racine said.

Replacing the IT system and the new state psychiatric hospital, another AHS project, are tough political feats because the return on investment – the political glory – may not come during his tenure.

But Racine said he’s “on a mission” and planning to stay in the job as long as he gets the only two votes he needs, his and the governor’s.

Editor’s note: This story was updated at 9:43 a.m. June 30. Budget information was updated, and quotes from VSEA were added.

CORRECTION: The original story stated that overall spending had grown by $545 million or 5 percent since FY 2011. These figures include duplicate totals from Medicaid. The actual total amount of growth over a five-year period, including Medicaid, is $345 million and total spending was $2.3 billion. The percentage increase is 8 percent over the time Racine has been secretary of Agency of Human Services.

Laura Krantz

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  • Starr Bullis

    Racine, get your head out of your ass and your feet in the lives of people who have to utilize the services of Vt. AHS……look at it’s mission statement! Is your agency meeting it’s mission and practicing the principals out lined in the Vt. AHS mission statement…..I think not….Throughout this article the buck is passed repeatedly from department to department and person to person…..

    Remember…..Shit rolls down hill and it begins at the top…..with Shumlin and dept heads…..and who is at the bottom…..Vermont’s Children

  • Renée Carpenter

    “The agency should develop programs that prevent Vermonters from needing services in the first place, Racine said.”

    Good point here, although my biggest disagreement with Doug Racine since he took the job under the Shumlin Administration is his ineffectiveness in insisting that his boss raise the percentage of income taxes on the wealthiest Vermonters to pay for these much needed programs. Not being on the inside, I have no way of knowing how hard he’s tried… and we all know about the amount of leverage one may have working “under” any boss.

    As to the first comment here, I’m surprised and disappointed that vtdigger.org allowed it to be published. It is rude and crass and offers no particular insights. I find it offensive and unnecessary for such vitriol on this website.

    Differences of opinion–sure. Let’s require some substance to comments, please.

  • Renée Carpenter

    PS- If the role of government is not to meet the basic needs of its most vulnerable citizens , then what is it?

  • A projected gap in 2016 does not mean that “state spending continues to outstrip tax revenues.” In 2015 Montpelier will write the 2016 budget. The task of writing a budget is to deliver the services VTers need & figure out how to raise the revenues to deliver them effectively (also to prevent their needing social services by, e.g., pressing for livable wages). How much revenue the state raises & how it raises that revenue are political decisions. There’s nothing inevitable about any of it.

  • The primary issue here shouldn’t be about Doug Racine or his management abilities in my view. Management performance may be a collateral issue, if so, it should be appropriately evaluated by the Governor and appropriate legislative oversight committees. The Agency of Human Services problems likely go beyond simply management skills.

    The issue is what’s driving the huge demand for social services in a state that we are repeatedly told is economically strong. Strong economies are suppose to minimize social dysfunction, which doesn’t seem to be the case in Vermont.

    We constantly hear about low unemployment, growing wages, a strong (albeit expensive) educational system and Vermont values. Its hard to reconcile the message of a strong state with the type and level of social ills we are experiencing. Social ills that push up costs we can’t afford, create budget and organizational difficulties that echo throughout the entire state government and ultimately fall on the backs of taxpayers.

    We can talk about antiquated computer systems and organizational complexity, but fixing these problems will not get to the heart of what produces a steady and growing demand for social services are stressing the system.

    Before the issues facing Doug Racine and the Agency of Human Services can be effectively addressed we need to understand what’s driving the demand for social services in a state that we are told is economically sound.

    • John Greenberg


      “Strong economies are suppose to minimize social dysfunction, which doesn’t seem to be the case in Vermont. ”

      Could you please provide some examples of your theory? Many of the world’s strongest economies are also those with the highest spending on social services.

      If that’s so, then maybe the problem lies with your theory, not with anything particular to Vermont.

    • Michelle Salvador

      While we quickly point the finger to blame someone, we neglect to address the real issue at hand which is a very stressed and changing culture. Very low wages, mental health, addiction are among the stressors in our culture that contribute to the rising need for human services, the rising complexity of that need and the severity of that need. It is far to simple to say DCF is broken, go fix it. This is a larger cultural issue that must be addressed as such and addressed in a comprehensive manner.
      In addition, this issue will not simply be addressed by officials alone.
      Well intentioned law makers are not on the front line. Go to the front line workers…involve them first in these discussions. They are the experts. While they cannot change our culture, they can contribute real ideas for improving outcomes. Until we do this, until we begin to look what is going on in our culture, a restructuring I feel is far from a bulls eye.

  • June Cook

    Racine’s remarks typify the hubris and arrogance of the Shumlin administration and the governor himself. The extent of the ineffectiveness and out-of-control expenditures for failures speaks for itself by looking at the record of what has happened.

    If Racine’s job is to stay above the fray, then why is his job needed? Secondly, if it’s to cut expenditures, just eliminate his job and cohorts. Put some lesser-paying, effective person into that position who understands the mission of the agency and can implement it “while getting his/hands dirty in the fray.” That most likely would save a bundle and bring services where needed.

  • Wendy wilton

    Doug is a good person, but the lacks the ability to manage this agency. Did Peter Shumlin appoint him to the job knowing that he wasn’t going to be successful with this mammoth, dysfunctional agency? That’s entirely possible. If so, it’s time to move on and appoint someone to really lead it to serve the people of Vermont. I feel for the employees and the people dependent on AHS…but we can’t a better environment for both of those groups without a serious leader to who understands how to drive better outcomes.

    • Kathy Callaghan

      The problem here is one that is rife across state government. Instead of HIRING qualified leaders from the business world, every governor magically embues their favorite politicians with the requisite skill set and subject matter expertise to lead and manage state agencies.

      A state agency is akin to a corporate division of a large company. Different agencies have different functions but they all serve the same goal, in this case, public services.

      It’s fair neither to Vermonters nor to the individuals involved to put someone lacking the requisite skill set, and in many cases, the requisite subject matter expertise, into a key managerial position.

      For heaven’s sake, use a search firm and find qualified executives either in Vermont or outside, who know how to and HAVE DONE these jobs.

      How many times must things not work to get the message?

      The appointees are fine people but if they competed for the same job in the private sector against experienced leaders they would not get the job.

  • Ron Pulcer

    I don’t think the social problems we see in Vermont are much different than what is going on in other U.S. States. Maybe the rates are different, but unemployment, drug addiction, child abuse is sadly going on everywhere.

    As far as Vermont’s “rosier” unemployment numbers compared to other states, the unemployment rate only counts people who are looking for work. If a person is supporting their drug habit via theft, then they are not being counted in unemployment rate. But yet they are not “working” in the traditional sense.

    I have worked in the IT field for almost as long as that 40 year old mainframe system mentioned in the article. I don’t know enough about Doug Racine’s performance to make a comment there…

    But why have past Governors and Legislators and AHS managers let these computer systems get so old and nearly obsolete over these 40 years?

    Just like those sidewalks in Rutland, you can balance the budget over the years by deferring maintenance and upgrades for only so long. Eventually, the IT issues and user-unfriendliness of these systems can become so large that it will cost more than whatever was “saved” over the previous budget years.

    How much manpower is being used today to work around or compensate for IT systems that are not working as well as they used to, or have not been maintained to work with any new processes and procedures that may have arisen over time?

    To what extent did the taxpayers benefit (if at all), from Challenges for Change? That was actually a bi-partisan effort (a Republican Governor and a Democratic Legislature).

    This reminds me of the recent VA scandal, in the sense that Congress, Pentagon and VA apparently failed to plan for rising healthcare demands of soldiers returning home from decade long war with sufficient doctors, system capacity, etc.

    Likewise, after the Great Recession, instead of meeting the rising demands in social services, they cut jobs without making sure the new processes and IT system would actually work as promised.

    I agree with Wendy, Doug Racine is a decent guy, just like former VA Secretary Eric Shinseki.

    • Tom Pelham

      Ron…a couple of historical markers regarding the ACCESS system and Challenges for Change.

      In the mid-1990’s, then Secretary of Human Services Con Hogan and the Dean Administration proposed funding for a replacement system for the then ancient ACCESS system. Our intent was to modernize the technological base at AHS to allow for a “common-view-of-the-client” system that would integrate eligibility and utilization information. In addition to enhanced management opportunities, such integration would enhance the ability of front line social workers to serve clients across all program categories rather than the “silo” approach which to a great degree still exists today.

      When the proposal hit the legislature, low income and human service advocates aggressively opposed the replacement of ACCESS based on confidentiality. They argued that client data remain segregated in each of the silos such that AHS employees working in say fuel assistance not have ready access to their client’s information in say Social and Rehabilitative Services, now DCF. As I recall, the proposal died in Senate Institutions.

      Regarding Challenges for Change, it was primarily a legislative initiative supported by appropriations and consultants hired by the Legislature. The Douglas Administration was asked to partner with the legislature on Challenges for Change and readily agreed. Here’s a profile of the saving opportunities that process has developed.


      Here are the last two reports, both brief, of the legislature’s Government Accountability Committee profiling the abandonment of Challenges for Change by both the legislature and Governor at the end of 2011.



      • Ron Pulcer


        Thanks for the links. This explains why I haven’t heard much about Challenges for Change lately.

        The GAC reports mention “temporary suspension” of C4C, but between Tropical Storm Irene, a state-wide strategic plan effort and Results Based Accountability effort, it seems like (as you said) C4C was basically abandoned or replaced by other processes. I have seen various references to RBA in VTDigger in the past year.

      • Ron Pulcer


        As far as the concerns regarding the proposed replacement to ACCESS, if there are some pieces of data that should not be seen by folks in other agencies or departments, it would seem that appropriate security / confidentiality screening could have been developed as part of the system.

        Nearly all systems I have worked with have mechanisms to display appropriate level of info on a per user, or per user group, or per screen (transaction or use case) basis.

        Well, thanks to you and Gov. Dean and Con Hogan for trying to improve and upgrade that system, back in the 1990s. Did the Legislature ever revisit this topic since then? Or has this legacy system (ACCESS) become even more “ancient” over time?

        • Tom Pelham

          Ron….ACCESS is still the “go to” eligibility management system at AHS. Last year the agency put out an RFP to replace ACCESS. CGI was the only bidder so in face of all the VT Exchange snafu’s, the administration rebid the project.

          Here is the new RFP. I haven’t looked at it in any detail. Maybe with your tech skills you can offer us some insights as to its quality and characteristics.



  • Mark Redmond

    Doug is responsible for DVHA; DCF; building a new state psychiatric hospital; addressing a devastating opiate crisis; Corrections; several other large departments; an overall budget of $2.3 BILLION. And he’s paid an annual salary of $124,000? Get real people. It’s a mammoth agency. In the for-profit world he’d be paid millions to manage even one slice of what’s on his plate now. We should be thanking him for what he has taken on, for so little compensation. It’s a thankless job. Who among us would even consider taking it?

    • Wendy wilton

      Mark, you make an excellent point here. That’s part of the problem, but the other part is political. Doug was appointed to the job, in my opinion, partly as political favor and partly as a way to keep Doug out of the spotlight as a prominent Democrat who may run against Shumlin. Mr. Shumlin is very shrewd and self-serving. I have often said it’s what sets him apart from any other VT politician I have ever known. The fact that Doug isn’t up to the task is a win-win for Shumlin, even if it’s a lose-lose for VT.

      In Rotary we have a motto: “Service above self”. It’s an attitude that people like you have embraced with all of the important work you do for those who need. Thanks for what you do in light of the state’s inability to successfully partner with organizations like yours that would enhance our response to those at risk. With the right management and systems in place AHS could be the ally that the social services agencies need to do the right thing. I only hope the legislature can recognize this and act on it if the governor won’t or can’t.

      • Darryl Smith

        Isn’t that the truth, even the newly elected Treasurer dropped to his knees in idolization of his new master.

  • Dave Bellini

    I’ve been critical of parts of the agency but it’s not possible to underscore enough, the damage done by Governor Douglas.

    In Corrections, Douglas contracted with Corrections Corporation of America and closed a prison. Then he cut positions willy-nilly, with no logic, understanding or concern about what he was doing.

    In the rest of AHS the Douglas Administration cut positions right at the time when they were facing increased demand from the recession.

    The current Governor isn’t going to put all the positions back, because it’s all about single payer and everything else be damned. If employees complain about anything, they’ll likely find themselves “under investigation” by the DHR police squad. This Administration rules by fear and intimidation. Many employees are afraid to question things.

  • Julie Tessler

    The Agency of Human Services has both challenges and accomplishments. There is data indicating both. For example if you look at the Department of Mental Health website under reports and data you will find a plethora of information especially in the Performance Indicator Project data (PIP reports).

    Contrary to Secretary Racine’s comment, the departments have a great deal of comparative information on the designated agencies. These agencies are regularly reviewed for quality of care and to ensure the state standards are met. Additionally they have performance-based contracts with the Agency with specific required outcomes.

    As a system of care we are moving forward in developing results based accountability and have met with both the Secretary and the State’s Chief Information Officer to share our progress. At the time they praised our initiative and commitment to accountability for outcomes.

  • Carl Marcinkowski

    The governor and his appointees need to take the BLAME for the questionable service of this dept. There, I said it…BLAME. Next comes accountability, but I’m not holding my breath.

    • Tom Pelham

      Re: Corrected budget figures. JFO budget figures for human services appropriations profiled here on page 16


      and exclusive of redundant appropriations within the agency, including global commitment funds, internal service funds, inter-departmental transfers and permanent trust funds, show the following. .

      Since 2011, the human services budget has grown from $1.931 billion in 2011 to $2.343 billion in 2015 for an increase of $411.7 million. Total increase over that period is 21% (not 8%) and the annual rate of growth is 4.95%.

  • John Mcbride

    Secretary Racine has no clue about how to run a department. Sure he may be a “nice guy” but look where that has gotten DCF. It’s not that he doesn’t want to get his hands dirty it is he has no idea on how to get his hands dirty. He sits in the background waiting for everyone else to do his job. Time for some leadership in DCF not empty suits sitting behind desks.

  • dale tillotson

    Bottom line Gov. Shumlin is the one to blame for the problems. He is the very person at the top waiting to take all the credit for successes while not accepting responsibility for failures. As Governor Peters biggest success has been fixing the Pete the Mosse fiasco that he helped create a few years ago with his leadership in the Senate.
    Bottom line draft Mike Smith for Governor.

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