(Promoting, with a reminder to candidates that GMD will front page messages such as this to the community. – promoted by odum)
Hello GMD Readers,
I view my campaign for governor as a job interview, which means to me that voters are entitled to information from the candidates rather than just sound bites.
Not everyone understands the budget problems we face in Vermont, so I wrote the following so folks will have a basic understanding of the deficit in the General Fund. The size of the deficit is a moving target, but I hope this gives you an idea of what I’m dealing with as Chair of Senate Appropriations.
I plan to post regularly and look forward to hearing from you. It is easy to contact me through my website, www.bartlettforgovernor.com
Sincerely,
Susan
As I travel the state and talk with Vermonters, I’m not surprised when I’m asked about the budget and what is the next year or two going to be like. Like every state, Vermont is struggling to maintain the services all Vermonters expect, as well as for Vermonters in need, in a time of global financial problems.
Here, in very simple terms and numbers, is what the state is facing for the next two years. It is important to remember that many states are in far worse shape than Vermont, but that doesn’t make the reduction in services any easier for Vermonters. More after the jump
The part of the state budget that we pay most attention to is the General Fund. That is the part of the budget that pays for most of the services that we associate with government: law enforcement, human services, corrections, health care, the judiciary, keeping the environment clean, economic development, labor and industry, permits of most kinds, state parks, higher education all those types of services. It does not include the education fund or transportation.
The General Fund in this past year was $1.2 billion dollars. It’s important to remember that many of those General Fund dollars can be matched with federal dollars, so that $1.2 billion represents a great deal more in spending ability.
The next budget, which we call the 2011 budget, is a fiscal year that begins on July 1, 2010. We need to reduce our General Fund spending by $85 million.
The following year, 2012, we need to further reduce our General Fund spending on that lower base number by $75 million. Once we have achieved that, we project we will have our spending of General Fund dollars in line with our projected revenues.
That means that our revenues will be at the same level for 2013 as they were in 2006, and our spending must be at that same level, too.
If you think about your family budget, let’s say you earned $35,000 this year. Next year you can expect to earn $32,515. The year after that, you expect just $30,336. With the cost of everything going up, how would that affect your spending choices? Now you begin to see the problem that confronts our state.
We have already reduced spending by more than $200 million dollars in the past two sessions. That hasn’t been easy. We have avoided truly terrible reductions because of the federal stimulus money. Both the administration and the legislature used that federal money to balance this year’s budget, and we will continue to use it to help balance the next year’s budget.
Then the federal dollars are gone and the states will need to have their spending in line with their revenues.
Going back to the family budget, this would mean that next year you would get help from your Great-Aunt Pearl to make up the difference in your loss of income. The year after that, you’ll get nothing.
In addition to these budgetary issues for the General Fund, there is wide spread concern about the amount of money we spend on K-12 education. As the number of students on a statewide level shrinks, we spend more and more on education per student. We pay for education with property taxes, a source of constant conversation and concern.
The state doesn’t have any additional money to contribute to the education fund. The changes we need to make to insure a high quality, affordable education for all students is another conversation, for another time.
Speculative trading transactions could use some reverse incentive as well. First find more revenue, then cuts should be discussed.
“The next budget, which we call the 2011 budget, is a fiscal year that begins on July 1, 2010. We need to reduce our General Fund spending by $85 million.”
With respect, the implication that there are no more dollars available is not true and is an artifact of Trickle Down. The wealthy have benefitted disproportionately the last 25 years. Why is the only option to cut essential programs? And why in the face of such problems did the Leg. cut the top marginal rate for the personal income tax?
To me (and many others), this makes no sense. The problems we face are serious and require sacrifice. But why must the sacrifice always be at the bottom?
I respect your service and know you’re trying. But the options cannot (must not) be limited to further cuts before considering new revenue.
So can the D’s who have shown that they have a veto proof majority if they band together along with the Ps. An income tax surcharge is the way to go to get the extra revenue needed. Interesting that Bartlett says we have to cut $ and doesn’t mention the option of raising revenue. If that’s her tune she won’t get my vote!
We must maintain the essence of Vermont or we will lose the goose that lays the golden eggs. Contrary to Republican talk radio, Vermont is gaining in high income people. Its not because we have low taxes. It is because we are where they want to live.
We need to maintain high quality in our roads, in our environment, in our schools and services.
It is counter-productive to lay off critical state workers when the demand for their services is greater than ever.
And, I’m tired of hearing about the cost of education when those costs are about a third of health care costs. Health care costs have been rising about three times as fast as ed costs. Lately they are rising even faster with no controls, no public votes on the cost, no budget. Want to save real money . . . go there.
PJ
All budgets deal with two essential items: expense and revenue.
It makes absolutely no sense to view the world through an expense only lens.
This is good news – glad to hear it:
I’d like to hear more about comments such as this one:
1. $85 million projected general fund deficit.
OK, let’s all agree that the $85 million number is correct.
The problem therefore is that: Vermont needs to close a gap of $85 million.
2. Solution: “We need to reduce our General Fund spending by $85 million.”
Why is that the solution?
Why is the solution to cut money from general funds?
Why can’t we find another $85 million in additional funds and make no additional cuts, or $75 million in additional funds and cut $10 million? $10 million in the current climate is probably an unreasonable high number given the how badly the State is responding to the needs to move Vermont’s economy forward and protect families from falling farther behind.
What is the rationale for what you are proposing?
I respect the difficulty of these problems.
Perhaps there are a few programs that do more harm than good and which can be cut to save the bulk of the $85 million and perhaps there is additional revenue available in excess of $85 million as well? Maybe there are significant cuts in general fund spending AND the ability to increase general fund spending as well. Perhaps additional spending in certain areas/programs/initiatives will help insure fiscal stability for both government and the economic climate of the State?
If only one solution is on the table or if other obvious solutions are off the table, let’s talk about why that is BEFORE we assume that there is only one solution, i.e., cutting $85 million.
I realize an introductory post is not the best venue to go into all these details. But please consider whether cutting $85 million is truly necessary given the significant efficiencies, cuts and the bare bones nature of so many critical programs already affected by poor planning during the past seven years.
Thanks for coming to GMD.
Susan, thanks for being out there with your views… as many (most) have already posted, my view is similar.
Please change your views.
The global perspective on the budget has may options for finding a balance. You seem to advocate only a CUT SPENDING approach.
If I wanted that perspective, If I were happy with that perspective, IF I BELIEVED that was the only option, I would be looking for Jim Douglas to run again-it is afterall the same position he has held in this situation.
Mr Hoffer is correct. As much as the R’s yell about taxing the rich, it is a lot like BurrRabbbit and the briar patch. Get us to believe if we tax folks who have a large voice, like Jim said about his CEO friends, they will run to the other side of the border. Let them go. It is high time the Republican position of taxing those who can least afford to take the tax and have no voice about it is REVERSED by a Strong Voiced Democrat. One who will VOTE in a Democratic way… One who Fosters democratic ideas and ideals…
So far I only hear those rumblings from the Racine camp. I urge you to look carefully at where the income and wealth is in this economy as well as in people’s pockets. And go there.
Where is Robin Hood when we need him (or her)????
It makes no sense to guess at the future until we assign responsibility for the past, and insist on an accounting.
We’re 2 or 3 trillion upside down on the war on terror. Who’s responsible? Those who hold hands with the foreign kings whose incompetence breeds terrorism! Who should pay for the war on terror? Those who prop up old holdy hands!
Our economy has collapsed. Who is responsible? Those who gave speculators the tools to bet against the average American, and who also gave away the economic tools, making the speculators’ bets into winners. Who should pay for the collapse? Those who bet against America, and those who gave it away.
The right is praying for and justifying the death of our president and his family (Google: Psalm 109 Obama), after causing the problems we are facing. The right has baited their trap with Jesus, and switched us back to an older god, variously known as greed, avarice, money, and Mammon. Now, they conjure up the old god of human sacrifice, Molech, to give Mammon a helping hand.
We will get by with less every year forever until we return to the truths upon which this country was founded.
That’s why I’m not interested in any candidate who won’t shout the truth until it’s heard.
Issues of money must come later. Being faithful to Mammon won’t free us from him.
Someone recently pointed out that Vermonters pay $250 million a year in credit card interest. Then we turn around and pay taxes as well. I think it was Pollina who proposed that the state issue a Vermont Credit Card and put the net revenue into the general fund.
I suppose that much of that $250 million is gouging interest rates and absurd fees, but even if the Vermont Card had a decent interest rate we could easily make up that $85 million. I’d sign up.
The knock on effect of a card with a reasonable rate would be to free up a lot of disposable income in the state. Instead of flowing directly to Citibank, $100 million or so would be available for buying local products and services.
The Vermont Card could also charge lower fees to retailers – every percentage point counts.
Then consider the State Bank of North Dakota, which pumps about $65 million a year into their state coffers. Why not us, if we could pitch aside stale ideology?
But I have to go with the consensus here. There isn’t a lot that can be harmlessly “trimmed” from the budget at this point. It’s time to ask those who have the most to pony-up for the good of the entire population. That is the whole point of statehood, we associate together because of our shared needs, so that we may share our resources in order to better meet those needs. It may not always be a pleasant exercise, when those that have significantly more are asked to contribute more; but poverty and disadvantage do not just bring down the indivduals who are poor and disadvantaged, they are a blight on the entire population rich and poor. Cutting back further on the social safety net or on essential services at a time like this would be like cutting off your nose to spite your face.
Thank you Senator Bartlett, for your candidacy, your tireless public service on Appropriations, and for bringing your perspective on our serious budget situation to GMD.
I hope you will continue to honestly engage the Dem base/left constituencies in your campaign and beyond.
I appreciated hearing you on VT Edition going a bit deeper then other candidates (thus far) and beyond the rhetoric; into the nitty-gritty of how gov’t actually works. This is an excellent forum for that sort of discussion. I hope you’ll choose to engage even more with perhaps a comment or two on this diary. It would be very much appreciated.
I also agree with the majority (here) that it’s vitally important that we consider revenue in any budgetary discussion. The comments here have been substantively above the par and pointed for this forum in terms of policy analysis.
Please help this discussion move even further with comment. Prompting real discussion, which leads to action is, in my view, the most valuable contribution that electoral candidates give to our democracy.
Thanks again!
Amen to all comments. You never take any option off the table before you start negotiating. No one is leaving the state because their taxes are up 2, 5 or even 10% — especially if it’s sunset in 5 years as happened in the 90s. I think everyone will agree that there is some percentage (although I know we won’t agree on what that is) where people will hesitate to come, or move across the NH border. But no reasonable politician is going to suggest any such rates; and to rule out all tax increases is just plain wrong.
I also resent very strongly any notion that the education fund is there for the use of the governor and legislature to do with as they please. This may not be the way you meant it to come out, but I’ve heard this too much in the last 10 years. That fund is there to pay for schooling. Period. If we collect more than we need (as we did 8 years in a row) you rebate it to property tax payers. Period. Teachers, administrators and school board members are hypersensitive to any suggestions otherwise…and I don’t think you can win the Democratic nomination without them.
I appreciate that Senator Bartlett made the effort to post here. I also appreciate that she is not focusing on raising revenue, which has been suggested.
One of the things that struck me when I moved to Vermont two years ago is how peculiar the fees are.
In some states, you only re-register a car when the car changes hands, and driver’s licenses last ten years. In Vermont, auto registration and licenses must be re-renewed every two years. I asked Senator Bartlett about that, and she told me it was to raise revenue.
In Vermont, there are fees in many situations where the state is not doing anything for the money — just collecting it. For example, if you’re a victim of a crime and told to install a security system, the state of Vermont collects a $50 fee from you EVERY year, and provides nothing. Any law enforcement response is handled by the local agency the town contracted with, often the VSP, and already covered in your local taxes.
In Vermont, a crime victim must pay $20 to get a copy of her crime report. In many states, a crime victim only pays 25 cents, copying costs. Keep in mind crime victims have usually already suffered economic damages. The crime report was already prepared in police work, so nothing about the situation costs the state $20. (I’m not even sure this is legal, since most crime victim assistance money comes from the federal govt, which has many regulations for how to treat crime victims.) Sen. Bartlett told me she would look into it.
Vermont is commonly called a “progressive” state, but I think these fees are not progressive. I have a hunch Vermont might have run out of fees that make sense.
Thanks Susan for coming out on here about the mysteries of the budget that baffle us lay folks. Your family example was great, except that it forgot the stimulus, federal matching funds, and all the rest of it. But, as has been said here, it is time for those that have benefited so well from the tax cuts to the rich that every president since Reagan has either tried to or shoved through in the face of starting wars. We can start with Douglas and Salmon, cutting all those state jobs,while refusing to cut their own salaries and benefits in the process.
We can start there — that is if the legislature has the political will to do it.
For one, as one earlier post mentioned, if we jettison our free-market health care system, that will save more than enough to make up for this economic disaster that the GOP left us in. Education expenses are raising property taxes beyond sanity because expenses for health care alone, just to feed those $7.25 million retirement packages for Blue Cross executives, and health care expenses are drowning school budgets. The taxpayer pays for the school’s health care, then pays for the state’s health care, and cannot get insurance or pays for their own health care in addition to what they are already paying. Stop this and look at how much cash you will save. Start saving where it means something, not cutting essential services for economically strapped people while the rich enjoy the taxes we pay them.
Again, we have to have the political will to do this, which I doubt that Vermont has.