Editorial: Governor's budget speech hits right notes politically, but actions fall short
At the heart of Gov. Phil Scott’s budget address to the Legislature this week is defense. It’s a budget that promises a smidgeon to almost every political issue his political opponents might ponder, while offering few initiatives one might criticize.
That’s smart politics, but it also locks the state into a holding pattern of slow decline — particularly throughout the state’s rural areas.
As with his prior budget addresses, Scott has emphasized efforts to rein in spending, holding this year’s $6.2 billion budget to a spending increase of about 2% over the current year, and maintaining a no-new taxes pledge. He sprinkles dollars around a dozen initiatives that are worthy and will draw few objections: $1 million more in the state’s newborn home visiting program to be sure new parents have the knowledge and resources to raise healthy kids in those first few critical months; $1 million in suicide prevention and mental health programs; $1.4 million increase in tax credits for downtown and village centers; $1.5 million to help revitalize downtown Newport; a $2.8 million investment to complete the Lamoille Valley Rail Trail; a million bucks additional in tourism, economic development and outdoor recreational marketing; $3 million additional for childcare assistance; $1 million to support more small business growth through VEDA loans; another million for incentives to rehabilitate old homes into “decent, affordable, energy efficient rental properties;” even $1 million to streamline an online business portal to make it easier for entrepreneurs to register and operate a business.
In one of his biggest single investments, the governor calls for a 4% increase in the transportation budget, an additional $25.5 million, which makes it the largest transportation increase in a given year since Tropical Storm Irene. That amount includes the state’s share of Middlebury’s $72 million rail bridge project, which he says “gets us closer to having Amtrak service from Burlington to Rutland to New York City.” And he gave important lip service to being a governor who would welcome refugees and explore ways to help communities establish refugee settlements.
It’s difficult to object to any single item, except to say it’s like adding a few grains of sand to a mile-long beach.
At the same time, Scott fired a few shots across the bow, suggesting he would veto legislation that would raise direct expenses to Vermont businesses — that includes a family leave bill that would increase payroll taxes, possibly a $15 minimum wage, or climate change measures (like a carbon tax).
He tosses a bone to environmentalists with a proposal to commit 25% of all future end-of-the-year budget surpluses for additional investments that address climate change “especially for initiatives that support weatherization or electrification,” but other than a $3 million boost to help build EV charging stations, he commits very few new dollars to help meet Vermont’s long-term goals.
What’s disappointing is that while the governor is savvy enough to pinpoint many of the state’s biggest problems, including what he terms as the state’s most pressing problem: “the demographic crisis and the economic challenges it brings” — his fear of raising revenues keeps him from being able to change the metrics. In government, as with business, without smart investment, you can’t keep up with the times and assets dwindle.
This is the chicken-and-the-egg dilemma the two political parties represent. Gov. Scott has been right to focus on making Vermont affordable for the average resident. Middleclass Vermonters struggle to find affordable housing, health care, childcare and higher education. Gov. Scott suggests that by keeping taxes as low as possible, business growth will take care of the rest.
It’s a strategy that hasn’t worked well under Scott for the past three years, nor has what is essentially a trickle-down theory worked nationally.
Democrats, on the other hand, look to some government involvement to help move the needle where needed. By increasing the minimum wage to $15 per hour, you put money directly into the hands of workers to boost wages and spending on local goods; the party would pass family leave policies to make working in Vermont more tenable and competitive with other states; more money would be put into higher education subsidies so more Vermont high school students could continue on to higher education (Sen. Ruth Hardy’s plan to make CCV tuition free is one such example); and more would be put into childcare and early education — as well as other initiatives.
Which strategy works better?
If the objective requires a quick change of course to get the state headed in a new direction, government intervention is the stronger option. That’s why Republican Gov. Dick Snelling, back in 1991, passed the largest tax increase in the state’s history to get the state out of a $58 million deficit. He didn’t cut taxes so the economy would improve and hope tax revenues would eventually recoup as Republicans often suggest today. He knew better. He acted with authority to get the job done.
Similarly, if the state faces an existential crisis, as Scott suggests, legislators and the governor need to take measures that move the needle now; otherwise we’ll continue our slow decline.
That’s the essence of the major battles that will play out in Montpelier this session, and it’ll set the stage for statewide elections in November.