The Public Assets Institute says the state has been managing its budgets largely through cuts.
Paul Cillo, president and executive director of the nonprofit group, says budgets are built on the amount of revenue state officials expect to receive, which in the past seven years has not kept pace with state spending.
Cillo says the state should instead build budgets based on services Vermonters need and set tax rates accordingly.
That’s the only way, he says, to reverse income inequality and build a “moral economy.”
Public Assets Institute is coordinating with religious groups to hold a dozen events to pressure the Shumlin administration to change its budgeting process.
Vermont Interfaith Action and Public Assets Institute want the state to determine how much it would cost to pay for services and then raise revenues as needed on the wealthiest Vermonters.
At an event Wednesday at the Unitarian Church of Montpelier, attendees created a human bar graph to show how the top 1 percent of Vermonters have improved their financial situations in the past decades, while the bottom 20 percent of residents have seen their incomes decline.
Cillo told the 40 attendees that Vermont’s overall tax scheme is regressive and that income inequality is the result of tax breaks for the wealthy.
He wants the Shumlin administration to produce a budget that maintains the same government services year after year. The so-called “current services budget” approach would take into account inflation and increases in the number of people who need services.
Ideally, Cillo said, the budget would show how much it would cost the state to provide services such as Reach Up.
Cillo criticized the Shumlin administration for failing to follow a remedy that’s already in place: The Legislature passed language in 2012’s “big bill” requiring that the administration “shall develop and publish annually for public review” a current services budget “of what the current level of services is projected to cost in the next fiscal year.”
“There needs to be the will on the fifth floor to put a current services budget out in January,” Cillo said. “We want the fifth floor to let the agencies release the information they already have. We told you to do it in 2012. You haven’t done it.”
The Center for Budget and Policy Priorities, a Washington, D.C., think tank associated with the Public Assets Institute, says the current services budget serves as a “baseline” tool that helps lawmakers and voters understand financial decisions. A few other states put in place similar budget accountability rules in 2011.
The state first required a current services budget in fiscal year 2014. The Shumlin administration issued that budget in January 2013 and included a page-long, line-item budget with rows that described specific departments and columns that compared “current service” with the “governor’s recommended” budget.
In fiscal year 2015, the current services budget included a two-paragraph definition of a current services budget, a description of the public participation in the budget process, and a list of about a dozen “current services budget items.” In the most recent budget year, the summary was the same, minus the public participation language.
Jack Hoffman, an analyst for the Public Assets Institute, said the Shumlin administration’s budget presentation doesn’t “account by agency and department” what would be needed to provide services like Reach Up (the state’s welfare to work program) and the 3SquaresVT program (formerly known as food stamps).
“What we’re talking about really is going through the kind of detail that they have later on, where there’s a breakdown by department,” Hoffman said. “I think that’s where people need the detail.
“It’s our policy to meet the basic needs of people in Reach Up, so what would it cost to meet 100 percent of the basic needs of people in Reach Up?” he said. “When they list their pressures, I don’t think they’re talking about the cost of meeting the basic needs of the families in Reach Up.”
Emily Byrne, the state budget director, said in an interview that it is challenging for the administration to make accounting terms understandable for the public at large.
“Everyone has a different idea of what a current services budget should look like,” Byrne said.
She said the three main drivers of the general fund spending increases are Medicaid spending, retirement and labor. Kitchel said her priority is to make sure that the state gets its money’s worth when it allocates funds.
“When we do our estimated gap, that’s really looking at a steady state, as if nothing changes,” Kitchel said. “The budget is the vehicle by which that gap gets closed.”
Justin Johnson, secretary of the Agency of Administration, said the budget itself isn’t as important as “what it represents” for the services state government provides.
Johnson is now tasked with writing the current services budget in a chart format or a narrative.
“It will be done,” he said. “I just don’t know exactly what form it’s going to take yet.”
