Speaker Smith is wasting no time and has hit the ground with a stimulus proposal that likely puts him on a collision course with the Douglas/Lunderville desire to exploit the financial crisis to starve off state Government.
Smith is proposing a public works infrastructure investment program, modeled after a proposal of former Governor Snelling’s during the early 80s recession. The program would be “a major reinvestment in Vermont’s crumbling transportation infrastructure.”
The $150 million for the two-year plan would be funded by $30 million in general fund bonding and another $120 million in transportation bonding, would be focused on Vermont business to create and sustain jobs. It would be implemented over the next 6 to 18 months. the idea, of course, is that targeting infrastructure for a stimulus will further enhance tourism and other economic development.
It’s a good idea, and it represents an excellent sign that the new House leadership has its economic head on straight. We’ll need to encourage and support them to show the same good sense when social services and environmental protections get put on the chopping block by the Governor. Make no mistake, the pressure is going to be intense as Douglas is seeing his opportunity to eviscerate both.
The complete abstract of the Speaker’s proposal is below the fold.
As the Vermont Legislature reconvenes to confront our state’s immediate economic crisis, Speaker Shap Smith and Democratic leadership in the House called for a $150 million economic recovery package to keep Vermonters working now and in the future.
The centerpiece of Speaker Smith’s Economic Recovery proposal is a public works employment program modeled after a program championed by Governor Richard Snelling in 1983. Additionally, the new Speaker called for a major reinvestment in Vermont’s crumbling transportation infrastructure.
Speaker Smith’s plan is part of the Democratic House’s overall agenda to keep all Vermonters working, warm and well through the current crisis and for the future.
? Immediate Need ?
Vermont’s economy is at an important crossroad. We cannot rely on federal action alone to move Vermont forward as we confront our immediate economic crisis.
Already, unemployment rates are at the highest levels since 1993 and are still climbing. It is very possible that unemployment could rise to levels not seen since the 1973 downturn, when it peaked at 10.5 percent.
Vermont housing starts during the last 12 months were at their lowest level since statistics in a comparable form began to be collected in 1969.
Finally, consumer spending – which represents two-thirds of the economy – continues to decline nationally. While figures to date indicate that Vermont is faring slightly better that the nation as a whole, nationally the year over year change is worse than -8 percent, the largest drop since the 1983 recession. Economists expect consumer spending to continue to decline.
? Strategic Investments ?
In the face of these critical challenges, it is more important than ever that the state make strategic investments in Vermont, its businesses and its people to ensure all Vermonters weather the current storm and to build lasting opportunities for our future.
In this critical time, Vermonters and Vermont businesses need income generating opportunities to keep the economy healthy. As businesses make decisions about where to make their future investments, they are looking to us for assurances that the infrastructure they need to succeed in a competitive, global economy will be in place here in Vermont.
And, since tourism remains an important part of the Vermont economy during both downturns and recoveries, we must ensure this sector remains strong.
? Keeping Vermonters working ?
On the opening day of the legislative session, Speaker Smith called for a bond-based public works jobs program modeled after a program developed by Governor Snelling and the legislature in 1983.
Speaker Smith proposed a $150 million two-year program consisting of $30 million in general fund bonding and $120 million in transportation related bonding as quickly as possible with the following three goals:
1. Implement projects that employ Vermonters and Vermont businesses, including the $10 million public works jobs program that targets Vermont’s unemployed, underemployed and youth.
2. Create jobs and develop projects that strengthen our infrastructure including our roads, park system, overall economic capacity and other critical state needs.
3. Implement projects and create jobs within the next 6 to 18 months.
Using the existing general fund bonding capacity, Speaker Smith asked the newly constituted Institutions Committee to develop a public works jobs program that puts Vermonters to work and increases the value of state assets. Examples of potential projects could include improvements to State Parks, water quality projects or construction and improvements to state offices.
Additionally, the Speaker called for an evaluation of future state investments in existing housing stock and support for our local businesses. He emphasized the importance of employing Vermonters in ways that will position us to take full advantage of the economic recovery when it comes.
The Speaker also asked the Transportation Committee to analyze a variety of projects for state investment, including:
• Increased funding for state and local roads and bridges where maintenance and reconstruction today can avoid future costs;
• Capital projects to strengthen our public transit system such as buses and park and rides; or,
• Major infrastructure projects including improvements to the state-owned rail system or upgrades of airport access and facilities.
Speaker Smith asked the committees to develop programs that provide jobs for the men and women of Vermont.
Funding sources:
• For the current fiscal year, the capital bill included $54.65 million for general fund projects and $10 million for transportation projects.
• For the next fiscal year, the Debt Affordability Committee has recommended $69.995 million in bonding, which includes $10 million for transportation funding. For FY 2010 and 2011 the full $15 million increase over FY 2009 authority will be targeted for general fund projects.
• The Legislature will consider the Treasurer’s $120 million revenue bond proposal to fund transportation projects now. With the economic weakness we are facing and the low price of oil – typically a major expense for projects – this is an excellent time for transportation construction activities. The Ways and Means committee will look at the Motor Fuels Distributor Infrastructure Assessment or other assessments that can be used to create a revenue bonding initiative as the Treasurer proposed.
• The Treasurer is anticipating going to market for approximately $57 million of this authorization in early March which, when combined with other year’s unissued bonding authority, leaves $11.6 million authorized and unissued bonding capacity. Vermont needs to consider expedited use of authorized debt to maximize project spending capacity to keep Vermont working.