Editorial: Governor Scott's dream budget
Thanks to a big push from congressional Democrats to extend federal COVID relief aid to states, on Tuesday, Vermont Gov. Phil Scott proposed a dream $6.83 billion budget for Fiscal Year 2022: It proposed no increase in proposed taxes or fees, it avoided cutting any essential services, and it added $210 million in new investments to bolster the state’s economy.
In recent times, that’s unheard of and it’s a far cry from worries last spring when economists initially projected budget deficits of more than $430 million. Even as recently as early January, economists were projecting a $70-$75 million budget shortfall for this coming fiscal year.
With the unexpected windfall, Gov. Scott’s proposed budget spread the love in ways he said would create the biggest gain from such one-time spending by investing in long-term solutions. Among other things, he proposed spending $20 million on broadband expansion, $20 million additional to the struggling state college system, $25 million on home weatherization programs, $20 million into the Vermont Housing and Conservation Board, while also spending $70 million on what he called “environmental stewardship,” which included $25 million to restore brownfield sites.
In a nod to economic development, the governor’s budget included nearly $30 million in additional spending, including $5 million in grants to businesses in the outdoor recreation industry, $5 million to boost trail systems in Vermont, and $5.5 million for local transportation-related infrastructure projects. And he included an additional $10 million to help Vermont small businesses that don’t qualify for federal COVID relief aid, but are still struggling to make ends meet.
Remarkably, the budget increases base spending by just 3%, while over-all spending increases 19% with the inclusion of one-time federal funding.
In short, the budget includes a grab bag of goodies that touches most sectors of the state’s economy, and changes the typical battle between the Legislature and governor’s office. This year, rather than fight about which programs are cut by how much, the discussion that’s needed is whether the money budgeted truly delivers the best long-term outcomes.
The Democratic-controlled legislature might disagree, for example, on the wisdom of expanding the lottery by allowing games like Keno in bars and restaurants, which would generate about $3 million per year and be dedicated to funding childcare, while also allowing sports betting, which could add another $2.5 million. Democrats have rejected similar proposals in past years because of the proven negative impact it has on lower-income Vermonters.
But that’s small potatoes and such battles put Democrats in that smug, elitist role of being the responsible parent wagging their index finger at irresponsible behavior.
There are more important battles to wage. For example, while touting the enormous impact Vermont’s tourism dollars have on the state’s economy and praising the high return on investment for each dollar spent on promotion, Scott’s budget calls for a mere $1 million increase. That to a marketing budget he recognizes is the “smallest in the Northeast,” spending about “half as much as our next closest competitor.” The state’s tourism budget has dwindled over the past several years from what had been $6 million to about half that. A good case could be made to boost spending by $3 million over the next two years — a measure that would not only juice Vermont’s economy, but also help the hospitality industry recover from the pandemic’s damaging blows.
Similarly, while few could argue that the state college system doesn’t need all the financial help it can get, legislators should be concerned that pumping $20 million dollars in the next fiscal year, on top of $139 million additional spending the state college system was already getting over the next two years, might be too much too soon. That is, will all that additional spending be used wisely?
Legislators might also consider that UVM, the state’s biggest economic driver by far, could use such funding in innovative ways to drive the state’s economy for decades. For example, with $20 million over two or three years, might UVM develop a program that focused on developing technology to improve large batteries to power residential homes and vehicles? That’s an industry and technology that will undoubtedly boom in the near future offering high-paying jobs for companies like Tesla. Those are the types of investments that could pay long-term dividends, rather than potentially padding state college budgets in ways that could be the equivalent of kicking the can down the road before hard choices are made.
That’s just one example of a slew of legitimate questions on multiple fronts that should be raised by the Legislature — not in a partisan way to negate the governor’s proposals, but in an effort to hone the budget to get the most value from each taxpayer dollar. This should be a win-win discussion for all of us, if, as the governor said, the criteria for spending those one-time funds is that each expense either “grows our economy or lowers costs for the future.”