Are Vermont's Pols Severing the Social Contract with Vermonters?
The left-leaning Public Assets Institute released a new report Wednesday claiming Gov. Jim Douglas and legislative leaders are going in the exact opposite direction than their predecessors during difficult times: Slashing, rather than strengthening, Vermont's safety net.
"We're now making our commitment to saving money rather than serving people," said Jack Hoffman, of PAI, and one of the report's authors.
Backing up the institute's report with some real-life perspective were former Agency of Human Services Secretary Con Hogan, who served under Govs. Richard Snelling (R) and Howard Dean (D), Tom Davis, who led the War on Poverty effort under Gov. Phil Hoff (D) and is the son of former Gov. Deane Davis (R), and Cheryl Mitchell, a former AHS official under Dean.
Davis noted that his father, in 1968, ran against creating a sales tax. But, after getting into office, and holding hearings on creating a sales tax versus cutting services to the needy, he changed his approach and urged the legislature to adopt the tax.
"Without the sales tax, he realized that the social contract with the people could not be sustained," said Davis.
In his 1969 inaugural address, Gov. Deane Davis told lawmakers: "The choices open are not pleasant. We could drastically cut education or welfare, the two major areas of spending, or we could impose an arbitrary percentage cut across the board. But these would not be valid alternatives and programs vital to our people would suffer. Last summer, I thought we had a choice open to us. We could either have an austerity program or increased taxes. It is crystal clear now that no such choice is available. We need both an austerity program and new taxes."
Hogan, too, decried the approach to Challenges to Change, which he said isn't giving a full accounting of the impacts that the cuts will have on services, and on the Vermonters who use those services. He said any proposal like Challenges should be clear, thorough, integrated and transparent.
Challenges, he claims, has none of those qualities.
"It seems calculated in such a way to avoid anyone taking responsibility for the impacts," said Hogan.
Hogan said the legislature, and administration, should slow down the process and give Vermonters a complete accounting of the cuts being considered as part of closing the $154 million budget gap, and the $38 million Challenges effort.
As I've noted in "Fair Game" recently, the impact on the human services budget is not simply $54 million, but close to $150 million when you account for lost federal funds and the impact of cuts related to Challenges. In some instance, federal funds have been returned to Washington, DC because too few staff were left in Vermont to dole out the grants.
Hogan said that figure may be too low. "We're talking several hundred million dollars over two years that will be cut from human services," he said.
The Public Assets Institute report shows that in the early 1990s the Snelling administration actually spent more on human service programs during the recession, including state general funds, while the budgets for the 2008-2011 years now show reductions in state spending. The only increase is the boost in federal spending as part of the stimulus budget, while state funds are being cut.
In 2008, while Vermont is spending more on human services than it was in 1989, that's largely because of increases in health care and corrections. It's not because we have a bigger safety net, argues Hoffman.
He adds that the institute's analysis shows that in the early 1990s, human services spending was higher then than it had been at any time in the 10 or 20 years prior, but that's because the state responded to an increased demand for services.
Today, Mitchell said, the response is completely opposite.
"This effort seems to be more about pencil pushing than providing services, and being only accountable to the bottom line, not the people," said Mitchell.
The report's authors say they are not necessarily advocating tax increases, but just a complete and honest debate so Vermonters understand the impacts of the budget cuts.
"Only when we can compare the full effect of the cuts and weigh that against using raining day funds or raising taxes can we have an honest discussion of what course to follow," said Hoffman.
In fact, despite some claims today's marginal tax rate on the top income-earners — those making $350,000 or more — is less today than it was during the recession that began in 1991.
Some elements of the Challenges legislation are being debated this month before lawmakers go home for the session, as I noted in this week's "Fair Game." Yet, another $9 million in savings, and how to achieve them, is not likely to be debated until well after folks have gone home, and by a much smaller group of lawmakers — the joint legislative government accountability committee chaired by Sen. Diane Snelling (R-Chittenden).
Hogan, however, didn't blame all the problems of today on budget-cutting axes in the administration or legislature. He said responsibility also rests on the shoulders of lawmakers who, during the 1990s, spent surpluses rather than socking them away for a rainy day.