Editor’s note: This commentary is by Tom Pelham, formerly finance commissioner in the Dean administration, tax commissioner in the Douglas administration, a state representative elected as an independent and who served on the Appropriations Committee, and now a co-founder of Campaign for Vermont.
[W]e know it’s not polite to say “We told you so,” so let’s get it over with. We told you so.
For the past four years, Campaign for Vermont has sounded the alarm that annual state spending growth in the four to six percent range is out of balance with the zero to two percent growth of Vermont’s underlying economy. For example, in 2011, we wrote this:
Pelham: Budgets revealed (VTDigger, Jan. 23, 2011)
And in 2013 these:
Pelham: Frugality — next year is too late (VTDigger, Feb. 19, 2013)
Pelham: The making of a fiscal shipwreck (VTDigger, Oct. 22, 2013)
To which Secretary Spaulding, in full denial, responded with this:
Spaulding: The ship of state is on the right course (VTDigger, Oct. 30, 2013)
Our more recent warnings also went unheeded:
Pelham: It’s Shap’s ship now (VTDigger, Jan. 23, 2014)
Pelham: Inevitable consequences (VTDigger, June 27, 2014)
Pelham: Chaos at the helm (VTDigger, Aug. 18, 2014)
Until last Wednesday, when the governor finally capitulated and according to WCAX said, “The structural deficit is something that could plague the state for the next five to 10 years.”
So now the damage is done and acknowledged. Now our focus must be where we go from here.
First, the governor and his staff, Speaker Shap Smith, other legislative leaders and their staff must accept responsibility for their errant ways. The concept of sustainable spending followed by Govs. Snelling, Dean and Douglas is a simple concept, but since the override of Gov. Douglas’ 2010 budget veto, the fiscal course charted by our Statehouse leaders has been reckless. The governor and legislative leaders have squandered the responsible legacy left them by these former governors and Legislatures. Patching together annual budgets that grow at 4 to 6 percent with one-time funds, cost shifts and other budgetary gimmicks when the underlying economy is growing at less than two percent is not OK. The consequences are inevitable. Accepting responsibility is a major step toward recovery.
Secondly, the current fiscal crisis is not the fault of taxpayers and our leaders should not punish them with higher taxes to compensate for the failed fiscal management at the Statehouse.
Third, certainly any fix will require multiple year legislative support and cooperation. Expecting the same committee leadership that guided Vermont into the current fiscal circumstance to guide us out seems unlikely. Speaker Smith and Senate Pro Tem Campbell must reconstitute key committee leadership and membership. These would be House Appropriations, House Ways and Means, House Education and House Human Services and their parallel committees in the Senate. There are numerous candidates, new and established, who can bring a critical mass of more fiscally moderate leadership and membership to these committees. In the House, these include, among others, Donna Sweeny, Oliver Olsen, Corey Parent, Heidi Scheuermann, Jim Condon, Maureen Dakin (a Blue Dog Democrat during the Dean years), Kathleen Keenan, Laura Sibilia, Adam Greshin, Tim Corcoran, Ann Manwaring, Cynthia Browning and Rob LaClair, among others. In the Senate the more moderate voices include Diane Snelling, Robert Starr, John Rodgers, Dustin Degree, Dick Mazza, Norm McAllister, Dick Sears, Joe Benning, Rich Westman and Peg Flory, also among others.
Further, the governor must guide the narrative. Although some in the media like to use the terminology “budget cuts” and “budget gaps,” the hard reality is that in recent years both the overall budget and human services budget, for example, have experienced generous increases. The rate of growth of the overall budget has been 5.1 percent, totaling $754.9 million, from 2012 to 2015, post rescission, and for human services a 5.2 percent annual increase totaling $326.1 million. The 2015 human services budget is a year-over-year 6.2 percent or $135.1 million increase even after the rescissions of last August. Certainly the special interest lobbyists and some in the media will scream that the “sky is falling,” requiring the governor to consistently inform the public that the laments of lobbyists are not well grounded and at the expense of fiscal sustainability.
Finally, the governor must be prepared to veto the budget bill if its construction does not soon return Vermont to a sustainable fiscal path. Even in the boom years, Gov. Dean did not stray from the path of fiscal sustainability. Here’s a letter threatening a veto he authorized and applauded as a “good letter” to then-senator Jeb Spaulding during the 2001 budget process.
