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October 23rd, 2017

Guest Opinion: Let’s Take the Long View

By Ed Paquin
Is it just the nature of the institution that the Legislature tends to focus on issues that have or are about to become crises?

We seem to have a new annual tradition in Vermont; each year we face a “budget gap” with insufficient revenue to meet the projected budget for our current level of services. And each year we resolve the crisis by cutting state services, moving money around, or raising bits of revenue with increases in fees and narrowly targeted tax adjustments. We make it through another year without deficit spending, but also without solving the underlying problems. And the budget gaps persist.

To be fair, legislators acknowledge that there are investments the state should make including the cleanup of the state’s waters, increasing child care subsidies, funding for community mental health and developmental services, and making higher education more accessible to Vermonters. But the Legislature’s time and energy gets focused on today’s budget gap without long-range planning or investment.

Budget gaps were not so much the rule before 2000. What changed?

The economy, for one thing. Income growth has been much more robust for high earners than for moderate and low-income Vermonters. And growth in consumption has tended to be in services that are not taxed, not in goods that are. Our tax structure hasn’t adapted to this new reality.

A cultural change has revealed another shift in Montpelier. During past recessions, policymakers were more open to raising the revenue that was needed in order to keep state government functioning competently. Governor Snelling used to point out that people needed more, not less, from government in hard economic times, and he backed it up with temporary tax increases during the recessions in the early 1980s and 1990s. And we have never been able to budget counter-cyclically, raising revenue when times are good to really save for the truly rainy day.

The mantra now seems to be “manage to the money” — just spend what the state takes in with little attention to what is required to fund an effective state government. Both parties seem to agree that less spending is better than more, regardless of the consequences. So we move from crisis to crisis. Has fiscal restraint in itself become a higher goal than having an excellent infrastructure with which to grow our economy?

On the administration side, policy and planning staff have been cut over the years and there has been little appetite for new revenue for state investments, even when they make long-term economic sense. This hurts Vermont. We keep putting short-term political expediency ahead of the long-term future of the state.

We need some long term solutions, we need some long term thinking. Our present course is not really putting our finances in order and it is leaving us with an aging infrastructure, polluted water, and more children and people with disabilities living in poverty.

The One Vermont coalition (onevt.org) has offered a promising possibility for lawmakers to consider. By eliminating tax giveaways to upper income taxpayers we could generate savings that could be used for smart investments, for lowering nominal tax rates for all, and for balancing MORE than this year’s budget.

Do you have grandchildren?

Ed Paquin is the Executive Director of Disability Rights Vermont and served six terms in the Vermont House of Representatives. He lives in Barre Town.

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