To my eye, the big news out of Town Meeting Day, our annual orgy of Vermont exceptionalism, was the overwhelming acceptance of local school budgets. According to the Vermont School Boards Association, 220 budgets were accepted and only 16 defeated — close to the state’s average for the past decade.

The obvious interpretations:

1. Vermonters are willing to pay for a public sector that is accountable and meets their needs.

2. Despite the constant mewlings of political figures from Bruce Lisman to Peter Shumlin and the incessant propagandizing of Vermonters First and other champions of far-right rhetoric, Vermonters are not “taxed to death” and don’t believe that their taxes are too high.

3.  Despite constant mewlings about the failure of public education, Vermonters are satisfied with their local schools.

4. If you do the right thing, even if it costs money, the voters will back you up.

With Vermonters continuing to pass virtually every school budget set before them, I don’t see how you can draw any other conclusion. Vermont is a liberal state that believes in a well-funded and effective public sector — even more so than its often timid political leaders seem to believe.

The oft-rumored Great Vermont Tax Revolt has once again been called off, for lack of interest.  

Small sidelight to Shumlin’s presser today. He was asked about the VPR report, cited by me in this diary, indicating that the federal sequester might open the door to consideration of tax increases.

And he did his level best to shoot it down.

Let me just say a word about that, because I did see a press report recently that interpreted my words differently than perhaps I expressed them, or maybe it was creative reporting.

He then pivoted to his talking points about the awfulness of the sequester, and then said:

My point is, Vermonters don’t have the tax capacity to bail out the ineptitude of the federal government. Period. No exceptions. We do not have that loot in our pockets.

When he talked about “creative reporting,” I don’ know if he meant Bob Kinzel or me, or possibly both. As for Kinzel, he was simply quoting the Governor. As for me, I’m not reporting, I’m offering analysis and commentary. And yeah, I do try to be creative. While also being as accurate as I can be.

Here’s the key passage from Kinzel’s piece:

The governor has strongly opposed most efforts to raise taxes this year but he says he might have to re-evaluate this position if the sequestration process drags on.

“If this thing were to go for any length of time we’d have to rethink everything that we’re doing.”

I saw wiggle room in that quote. If the Governor didn’t mean it that way, well, maybe he should have put it differently.  

Note: This is the promised expansion of the brief headline item i posted earlier today.

I don’t think I’ve ever felt sorry for Tom Salmon before.

Our esteemed former Auditor, now out of the spotlight*, became a convenient target for political slings and arrows today, as Governor Shumlin called for new legislation regarding Tax Increment Financing (TIF) along with forgiveness for any possible violations of current TIF law by local communities.

*Anybody know if Tommy Boy has accepted any of those lucrative out-of-state offers he’d supposedly received?

Salmon, you may recall, released a 2011 audit that harshly criticized the TIF law’s ambiguities and called on four communities to give the state Education Fund a total of $6 million to make up for alleged underpayments. Shumlin echoed Salmon’s conclusions about the iaw, but rejected Salmon’s $6 million demand. Instead, he said, “Let bygones be bygones. Let’s clarify the future and wipe the slate clean from the past.” (Photo: the Governor speaking today on the formerly mean streets of Winooski, now sanctified by the power of the TIF.)

He also made it clear that he stands with the communities, not the audit. When asked if that $6 million should be considered a debit against the state Education Fund, Shumlin replied:

Well, some would argue that. I would argue that it was never really there, because the towns’ interpretation is pretty clear that they didn’t owe it.

In other words, the towns are right and Salmon was wrong.

Makes sense from a purely political point of view, I guess. Choose between a party turncoat who made loads of enemies and squandered his credibility, and is now gone from the scene; and the mayors of Vermont’s largest communities, who have given their support to Shumlin even when it meant crossing party lines.

Yeah, let’s go with the mayors.

After the jump: Some pretty strong anti-audit comments. Plus reaction from the current Auditor, Doug Hoffer.

For those just joining us, TIF is a way to subsidize development in troubled communities. It issues bonds to finance development projects, and uses the extra property-tax revenue created by the development to pay off the bonds. Vermont’s current law contains no enforcement mechanism, and left substantial room for interpretation by local officials.

Shumlin announced his call for amnesty and a legislative do-over outside the Champlain Mill development in downtown Winooski, which he cited as an example of the good that has been done through TIFs in the past.  He surrounded himself with mayors and other local officials, who were happy to join the Salmon dogpile. For example, Brian Palaia, Milton town manager:

This has been a concerning matter for the past two years, since the state auditor decided to cast aspersions upon this important economic development tool.

Aspersions, indeed. Funny way to characterize an audit. Later, Steve Jeffrey, head of the Vermont League of Cities and Towns, referred to “the kinks and little problems we’ve run into with the TIFs.” Yeah, six million bucks worth of kinks.  

Secretary of Administration Jeb Spaulding sought to isolate Salmon by invoking his successor:

The current auditor supports the proposal in front of us. because there’s a great deal of uncertainty about where the numbers come from, and it doesn’t do anybody any good to keep arguing over numbers that may or may not be accurate, and instead get the rules clear and the enforcement clear moving forward.

See, it’s just too darn CONFUSING to figure out who’s right and wrong, so we’re just going to forget the whole thing.

As for “the current auditor,” Doug Hoffer wasn’t there. I asked if we was invited, and Shumlin spokesflack Sue Allen said that Hoffer “couldn’t come.”

Couldn’t, or wouldn’t?

LATE ADD: I just received the following reaction from Doug Hoffer by e-mail:

But really, for all my snark, I can see Shumlin’s point of view. The state law was badly written, to the point where it may truly be impossible to say who really owes how much. And, he argues, TIF is too important an economic-development tool to put on the shelf while we figure out who’s right and who’s wrong. Better to just start from scratch. If we can get it right this time, maybe this is the best thing for all concerned.

That’s the important thing going forward: what mechanisms will the Legislature create for oversight and enforcement of TIF requirements? Vermont doesn’t have a great record with economic-development initiatives; the original TIF law isn’t the first to either be ambiguously written or to be ignored in practice. Take, for example, Howard Dean’s corporate tax credit program, subject of a pretty savage report by then-Auditor Elizabeth Ready.  

It’s not clear if Shumlin’s proposal has actually been written yet. I asked him if his TIF plan was based on Salmon’s recommendations, and he said “Some of it, yes.” But when I asked him to elaborate on the differences, he quickly changed the subject.

A good TIF bill would be, on balance, a good thing for Vermont. But the bill needs to be strong enough to eliminate room for funny business, and enforcement needs to be tough enough to eliminate the sweetheart deals that sometimes arise from poorly-managed tax-incentive programs.

The devil, or the angel, will be in the details.  

Hi. I’m John, and I have diabetes.

I’m okay, though; it was caught early, and it’s under control. But here’s the story, and how it relates to our health care debate.

I’m in my late 50s. I’ve been overweight for most of my adult life, and yeah, the main culprits have been sugar and carbs. Plus, there are diabetics on both sides of my family tree, and genetics is a big risk factor.

So, early January, routine visit to my doctor. He comes in with that adorable hangdog expression he wears when I’ve disappointed him with bad numbers or weight gain, and tells me I have diabetes.

It was a surprise to me, because I didn’t have any symptoms. Aside from my weight I felt pretty good; but my blood sugar was in the danger zone.

So, off to see the diabetes educator, and off to the pharmacy to get myself one of those finger-sticker thingies. Gotta cut back on carbs, eat more protein, and if I snack, it needs to be planned and balanced. And I gotta stick my finger twice a day.

And it’s worked.  

I’ve changed my diet, my blood sugar readings are way down, and at my one-month follow-up visit with the educator, she was extremely happy with my progress. Star pupil.

Here’s the thing. Diabetes is an insidious disease; you can have high blood sugar for years before it starts wreaking havoc on your body.  

But I have good health insurance. I can see my doctor regularly for a minimal co-pay. And that’s how my diabetes was detected early, before it began to destroy me. And thanks to my insurance, I have access to prescription drugs, finger-stickers, and informational support.

If I didn’t have insurance, or if I had the really crappy kind, I wouldn’t have been seeing my doctor regularly. I would have gone on eating a lousy diet until the diabetes was kicking my ass. In the short run I would have cost the system nothing; but within a few years I would have become a very expensive charity case.

And, if you care about the human dimension, I would have been in really bad shape and may well have died young.

The moral of the story: Universal health care. It’s the right thing to do. And if it’s done correctly, it’s cheaper than the alternative. Let’s do it.  

Angry Jack Lindley, chair of the Vermont Republican Party, has once again resorted to his favorite tactic — cutting off his nose to spite his face.

The man at the helm of a nearly bankrupt party with no grassroots infrastructure, a dearth of appealing candidates, and an ideology that’s clearly to the right of the Vermont electorate, has decided the thing to do is… tack to the right. It’s like the captain of the Titanic shouting “More icebergs! We need more icebergs!”

This time, Lindley has responded to the federal sequester by basically saying it’s not drasttic enough. Yes, he’s effectively positioned himself to the right of the Tea Party Congress.

Lindley… says the across-the-board cuts, split 50-50 between defense and non-defense federal agencies, are merely a “bend in a curve of increasing expenditures.”

Joining in the Teabagger’s Lament was House Minority Leader Don Turner.

“A lot of people are trying to make this seem like a huge, huge cut,” Turner told VTDigger. “I don’t think that’s the case.”

And, as with Lindley, Turner has a remarkably paleolithic outlook on the federal cuts:

Turner’s other take is that the sequester provokes a long overdue and much-needed conversation about the state’s reliance on federal funding.

… “We have become very, very dependent in Vermont on federal money, and we need to start to wean ourselves off of that.”

Hmmm. Yes, we need to go back to the Good Old Days when we didn’t have welfare or interstate highways or any of that modern claptrap. Back when communities struggled mightily to meet their obligations.  

So much so that, according to “The Star That Set,” Samuel Hand’s account of the rise, reign, and fall of the VTGOP, the clamoring for centralized government actually began in Vermont’s smallest, most rural communities — the ones that didn’t have the resources to meet their obligations. They were the ones who started Vermont on the path toward big government, because they needed a government big enough to support them.

But that matters little to a diminished Republican Party that’s largely been stripped of its moderate wing. If you spend any time around the State House, you’ll see why the VTGOP may well be trapped in an ideological vortex. The Republican delegation is full of tea-party types who can barely contain their anger as they sit through hearings, meetings and debates, powerless to stop the Democrats from pursuing their agenda. The atmosphere must seem so alien to Republicans who’ve been incubated in the Fox/Rush Bubble: they are forced to endure endless concern for health care and the environment and the poor and all that other commie-pinko stuff.

One quick example. Tom Terenzini, retired prison guard and freshman state representative from Rutland Town. Technically an R/D because no Democrat ran against him, but clearly a Fox/Rush kinda guy. By dint of some cosmic joke (or freshman hazing ritual), Terenzini was assigned to the House Fish, Wildlife, and Water Resources Committee, chaired by noted environmental champion David Deen.

Terenzini clearly has no interest in fish, wildlife, or natural resources aside from human exploitation of same. And when you watch him in committee meetings, you witness a fascinating combination of boredom and slow-burning rage.

Seeing Republican lawmakers like Terenzini, and reading comments like those from Lindley and Turner, make me realize that the VTGOP is caught in a powerful current carrying them further to the right. And their State House impotence is only making things worse: the longer they have to watch the Dems walk all over them, the madder they get.

It’s going to take some remarkable events to make the Vermont Republican Party relevant again. And I don’t see anything to suggest that its current crop of leaders and officeholders can take the necessary steps. Quite the opposite; I think they’re far more likely, out of pure spite, to push their party into even greater irrelevance.  

Well, well. After months of fiercely-worded opposition to “broad-based tax increases” — i.e. tax increases he doesn’t like — Governor Shumlin has opened the tax door, if only just a crack. He hasn’t changed his mind just yet; but he appears to be preparing the way for a big change in his position.

Why? Because of the federal sequester.

VPR’s Bob Kinzel:

Shumlin says the proposed state budget for next year is very tight and that there’s no money available to backfill these federal cuts.

… The governor has strongly opposed most efforts to raise taxes this year but he says he might have to re-evaluate this position if the sequestration process drags on. “If this thing were to go for any length of time we’d have to rethink everything that we’re doing.”

This could dramatically change the Legislature’s agenda. The sequester might allow Shumlin to dump his unpopular revenue schemes (such as the Earned Income Tax Credit cut) and reopen discussion on stuff he’s ruled out, including the soda tax or a temporary tax increase on the top brackets.

The sequester may prove to be a very convenient pretext (especially since it happens to be true) for a brand-new plan to balance the budget and fund the Governor’s pet projects in education, energy, health care, and aid for the poor. Even if he doesn’t go that far, the sequester might allow him to loosen the screws, even slightly, on his tight budget limits.

On the other hand, reports like this might induce the Governor to double down on his anti-tax stance and go the draconian route. He does like to look tough.

Should be an interesting gubernatorial press conference tomorrow morning.  

If you have six minutes to spare, I strongly recommend watching this video.

It’s the best illustration I’ve ever seen of America’s horrific maldistribution of wealth. And it came to my attention at just the right moment; after I’d written a long diary about Governor Shumlin’s budget plan. Specifically, his plan to cut the Earned Income Tax Credit and use the money to make child care more affordable. The basic theory being, if you remove a few barriers, then the poor can work their way up the economic ladder and attain a measure of security and success.

After viewing this video, I’m even more convinced that it won’t work.  

To me, the key graphic is this:

The gray-on-gray text is a bit hard on the eyes, but this chart shows the absurd concentration of wealth at the top end. (The curve rises so sharply that, for the top 1%,the vast majority of their wealth doesn’t fit on the screen — it soars way up into the stratosphere.)  

The problem with Shumlin’s plan is it seeks to move people from the bottom 10% to the next tier or two — get them into the middle class, where they would presumably enjoy some financial stability.  

However, the next 10% and the next 10% and the 10% after that are hardly any better off than the bottom 10%. They are perilously close to the raw edge of poverty.

So, let’s say the Governor’s plan works. Poor people find jobs and manage to hold onto them.

Well, those jobs pay so badly that they offer little or no security or stability.

Our economy isn’t a “ladder” anymore. It’s a flat expanse that gradually rises to the base of an insurmountable cliff. And everybody in that flat expense is basically in the same boat.

Even if Shumlin’s plans were absolutely brilliant and certain to work as designed, all he would do is deliver some people from the bottom 10% into the 10th or 20th percentile, where they would be one single misfortune away from tumbling back into poverty.

This chart and this video also render completely ridiculous the Governor’s assertion that our tax system is quite fair enough, and the wealthy can’t afford to be squeezed any more — not even a tiny bit more. That’s a big fat f*cking lie, and he should stop saying it.

Given the current income distribution, the only way to balance our books is to pull more money out of the top ranks. Because, as Willie Sutton used to say, that’s where the money is.  

Note: There’s a lot of mathification in this diary. I did my best to get everything right, but I stopped being math-infallible when we switched from times tables to algebra ‘n stuff. If anyone notices any mistakes, please bring them to my attention and I’ll correct them.

___________________

Our Governor is fond of referring to “struggling Vermonters” whenever he needs to dismiss ideas for tax increases he doesn’t approve of. Such talk ought to prompt a hearty chuckle from the press corps, since the idea usually involves a tax hike on people in his own bracket, who are, by no stretch of the imagination, struggling.

Meanwhile, the Gov is engaging in a real-life test of that old saying about straws on camel’s backs, and his guinea pigs are the Vermonters who truly are struggling — the working poor*. There’s the proposed cut in the Earned Income Tax Credit; the planned five-year lifetime cap on Reach Up benefits; and the likely prospect of higher premiums and/or out-of-pocket health care expenses when Vermont transitions from Catamount/VHAP to Vermont Health Connect in 2014. Each of these proposals has attracted a goodly amount of criticism from lawmakers and advocacy groups, but I haven’t seen anyone try to tot up the cumulative burden of all these proposals. How many straws are we piling on the camel’s back?

*Excellent piece in today’s New York Times about our jobless recovery. Well worth using one of your ten freebies a month, if you don’t subscribe. In brief, it reports that the federal budget sequester may throw hundreds of thousands out of work, but the stock markets are riding high because investors know that corporate profits will remain strong, no matter how badly the rest of us are getting screwed. As one analyst, struggling to avoid the moral implications, put it: “So far in this recovery, corporations have captured an unusually high share of the income gains.” Uh-huh.

We’ll start with something that’s not at all the Governor’s doing, but it’s part of the picture nonetheless. I’m talking about the end of the federal payroll-tax holiday at the beginning of this year. That alone means a two-percentage-point tax increase for low- and middle-income Vermonters.

The payroll tax holiday had to end sometime; it exacerbated the long-term shortfalls in Social Security. But it’s a highly regressive tax, since it applies to incomes up to $113,700.  

So even before we get to the Governor’s budget, the working poor are already 2% in the hole. Easy math: for someone earning $30,000 a year, it’s a $600 tax increase. (If you’re making $113,700, it’s a $2,274 tax increase. And if you pull down a million per year, it’s… er… a $2,274 tax increase. Wouldn’t want to burden those “struggling” millionaires.)

Okay, with the payroll tax as the backdrop, let’s move on to Shumlin’s proposals.

Earned Income Tax Credit. The EITC is a federal program; Vermont provides a supplement worth 32% of the federal credit, which amounts to $25 million out of the general fund. Governor Shumlin has proposed pulling $17MM out of the EITC to pay for improved access to child care for low-income workers. In 2011, the average Vermont EITC was $574; if the Governor has his way, that average would presumably drop to about $184. The EITC is determined by income and family size, so the impact on a particular recipient is hard to measure; but let’s say the average recipient would see an effective tax increase of $390.

And the effect is worse for those with lower incomes; if you’re a family with three kids making $20,000, the Vermont EITC would drop by $1,250. That’s a big-ass tax increase, pardon my French.

The Governor has trumpeted the “fact” that the cost of Vermont’s EITC rose by 49% between 2003 and 2011. However, as I have previously noted, that number is grossly misleading. More than half the increased cost is because more Vermonters qualify for EITC support — a byproduct of the weak economy and jobless recovery. The rest of the increase is due to the rate of inflation. The actual purchasing power of the average EITC payment has basically stayed the same. Inconvenient for the Governor’s argument, but true nonetheless.

And about that child care access. The following unpleasant numbers are courtesy of Jack Hoffman of the Public Assets Institute. The Shumlin plan, he says,

…raises income taxes on 44,000 poor working tax filers to expand a program that supports about 7,000 families. There are about 5,900 families now receiving the child care subsidy and the estimate is that another 900 families will be served with the expansion. In some cases, families will lose some of their tax credit and also see a reduction in their child care costs, which could be viewed as a trade-off. However, about two-thirds of the families in the child care program-about 4,000 families-now receive a 100 percent child care subsidy-because they are at or below 100 percent of the federal poverty level. The expansion of the subsidy program will not improve their family finances. They don’t pay for child care now because they can’t afford to, and they won’t pay under the expansion. However, they will lose much of their EITC making these families poorer.

In short, Shumlin’s EITC cut is a bad deal for almost all recipients. Also, many of the working poor face multiple obstacles to work — transportation, health, lack of relevant skills, a large number of really sucky jobs that don’t pay the bills. Better access to child care may or may not even help the small minority of EITC recipients who would benefit from the Shumlin plan.

All in all, a lot of EITC recipients would lose hundreds of dollars, while a fraction would get some improvement in child-care access. Which may or may not make a difference in their ability to stay in the workforce.

Maybe that’s why House Speaker Shap Smith has pronounced the EITC cut all but dead.

Reach Up. I covered some of this in yesterday’s post, “Shumlin’s package is coming apart.” But here’s a little more.

Shumlin wants to impose new caps on Reach Up benefits: a five-year lifetime cap, and a three-year cap on continuous benefits. As I reported on Sunday, a new Maine study suggests that these caps have devastating consequences for people who live on the edge between employment and joblessness, or between poverty and barely getting by. The Administration’s response is that Vermont’s program would be superior to Maine’s because we will offer more services and guidance to those hitting their Reach Up maximums.

In the long run this might work out — if the economy stays strong and there are enough jobs for those without much education, ha ha. But how will it work in the near future?

Well, we get a pretty good idea form a recent article by VTDigger’s Alicia Freese. If Shumlin’s plan takes effect, nearly 1200 families (nearly 3800 individuals) would hit their Reach Up maximum on day one — October 1, 2013. Of those 3800 people, 2400 are children. More:

Eighty-four percent of the households are single parents. They face, on average, 3.7 “barriers” to finding employment, including lack of transportation, emotional or physical health problems, and no high school diploma.

Of those 1200 households who’d be cut off on day one, 864 will have hit their lifetime cap, meaning they would never be eligible for Reach Up again.

There is some merit to limiting Reach Up, or at least doing everything we can to help recipients succeed. Some recipients do need some incentive, positive or otherwise, to do the hard work of bootstrapping their lives. But the best way to achieve this is to improve the social services network and give case workers the time and tools they need to help their clients, not to impose an artificial cap.

And, I remind the gimlet-eyed among us, the Maine study found that overall expenditures on the poor actually rose after that state imposed a five-year cap. That’s because those people don’t just go away; they rely on other social-service and emergency-assistance programs. If the Maine study is to be believed, the Reach Up cap is penny wise and pound foolish.  

Plus, well, there’s the human suffering and all that.

Health care transition. On January 1, 2014, the Catamount and VHAP programs will cease to exist, their place taken by Vermont Health Connect, the health insurance exchange mandated under Obamacare. The problem is, the benefits for many of the working poor are not as generous under the exchange. Advocates fear that this will cause more people to drop out of the system.

Shumlin tried to close the gap as much as he could — without raising undesirable taxes, of course. He did a pretty good job in terms of premiums; but many people will see higher limits on out-of-pocket costs. Under the Shumlin plan overall, the vast majority of clients won’t see their up-front costs rise (indeed, many will see those costs go down) — as long as they stay healthy. But if they run up big medical bills, they could be stuck with hundreds or even thousands in additional expenses.

Administration officials argue that relatively few people are sick enough to hit their out-of-pocket maximums. But those who do will see a tough situation get even tougher. And Shumlin has resisted all efforts by liberal Democrats and Progressives to add any more premium support. They didn’t even bend to the tune of $800,000, which would have given them two more votes in the House Health Care Committee (Prog Chris Pearson and Indy Paul Poirier) which would have given the bill significant momentum as it moves through the process.

For those interested in the numbers, here is a chart prepared by the Vermont Campaign for Health Care Security. This was released on February 20, but as far as I know it’s still up to date.

Conclusion. Each of Governor Shumlin’s proposed cutbacks is not a death blow, if taken separately. But add them all up — especially with that 2% federal tax increase already on the books — and he would place significant additional burdens on the lives of people who are scraping and scratching to get by. A few hundred bucks can make a huge difference to those who have to think twice about every purchase. Meanwhile, Shumlin is absolutely steadfast on holding harmless those Vermonters who are not struggling at all — his fellow one-percenters.

The Governor says he wants to reform a “cruel” system that traps people in poverty. But his own proposals place new barriers in their path to success. And it’s difficult to see his relatively modest reforms in child care and case-worker support even mitigating the barriers he would impose, let alone giving the poor a better overall chance at making it.  

Ah, the Mitchell Family Organ brings me a nice, raw piece of political hypocrisy today.

Seems that Our Governor, Peter Shumlin, was speaking with a New Jersey newspaper in his capacity as chair of the Democratic Governors Association. And he unleashed this… very interesting… line of attack against New Jersey’s Republican Governor, Chris Christie.

“The middle class is getting kicked in the teeth in New Jersey,” Shumlin said. “(Christie) vetoes income tax increases for the millionaires and billionaires and tells the middle class they have to pay more.”

Hope you weren’t drinking coffee just then, ’cause if you were, it’s probably coming out your nose right now. Because as we all know,

Shumlin has rejected calls for tax increases on millionaires and billionaires in Vermont, saying they’ll just pack up and leave for friendlier pastures.

The reporter, who doesn’t get a byline but is presumably Pete Hirschfeld, the sole staffer at the Vermont Press Bureau, helpfully adds the fact that New Jersey’s top income-tax rate is two one-hundredths of a percent higher than Vermont’s. 8.97% in New Jersey, 8.95% in Vermont. But as we all know, it’s that last two one-hundredths of a percent that makes rich folks head for the hills.

See, Governor, there’s a problem with saying one thing at home and saying the opposite to an out-of-town reporter. It’s called the Internet. We can read stuff here, even if it was published hundreds of miles away.

I can hardly wait for his next press conference, to see how he’s going to spin this.  

Lately, Governor Shumlin has depicted his proposals for education, child care, and welfare reform as an indivisible package: you take away one piece, and the rest falls apart. The obvious reason for this tactic is that parts of his plan have proven deeply unpopular, despite his repeated efforts at salesmanship.

There are two items that have drawn the most fervent opposition: Shumlin’s plan to cut Vermont’s share of the Earned Income Tax Credit (EITC) by almost three-quarters (with the savings earmarked for improved access to child care), and the proposed five-year lifetime cap on Reach Up benefits.

Subscribers to the Mitchell Family Organ will find bad tidings for both, in an article by Prolific Pete Hirschfeld of the Vermont Press Bureau. It’s mainly about Reach Up, but to me, the biggest single piece of news concerned the EITC cut:

House Speaker Shap Smith all but declared the reduction in the EITC dead Friday, saying, “I would not anticipate it is going to be a major part of any bill that will come out of the House.”

Artfully worded, but pretty damn definitive. Buh-bye, EITC cut.

The news regarding Reach Up actually comes from Maine, where far-right Governor Paul LePage (R-Teabag) imposed a five-year cap on the same program — which, in Maine, is called Temporary Assistance for Needy Families (TANF). The cap took effect on June 1 of last year; and a new study shows that it’s had the predictable effect:

The median monthly income of families that lost assistance was $260, or $3,120 per year – less than 20 percent of the federal poverty level.

Nearly 70 percent had visited a food bank, more than one-third had their phone, gas or electricity shut off, and another 17 percent reported running out of heating fuel. Nearly 15 percent of families surveyed were either evicted or lost their homes, and more than 9 percent ended up in homeless shelters.

Plus, for those more concerned with the bottom line than the human impact, the Maine Sunday Telegram reports that the TANF cap has actually caused an increase in government expenditures for the poor. The burden has simply been shifted from TANF to General Assistance and other emergency programs.

After the jump: Shumlin’s inadequate reply.

Shumlin Administration officials say the Maine study is irrelevant to Vermont’s situation, because they plan to boost child care and get more social workers providing one-on-one help to Reach Up recipients. It’s true that the Shumlin proposal isn’t as mean-spirited as LePage’s,* but there are still big problems.

*There’s a good crisp definition of “damning with faint praise.”

First, as noted above, the improved access to child care is far from a sure thing. If the EITC cut is dumped, the Legislature will have to find child-care money somewhere else — or kill that proposal as well.

Second, child care is only one of the barriers to work. Indeed, according to a recent VTDigger story, the average Reach Up recipient in line to lose benefits under the Shumlin plan faces 3.7 barriers to work. Those include lack of education, lack of transportation, and problems with emotional or physical health, as well as child care.

Third, the social-work infrastructure that provides guidance to Reach Up clients is still recovering from a disastrous “reform” program launched by the Douglas Administration which centralized the system, cutting way back on one-to-one contact and relying far more on call centers and the like. (Im doing some research on this, and hope to have a full diary on the subject in the near future.) The result is that Reach Up clients have had a lot less individual guidance than they used to.

Shumlin proposes to boost the number of case workers and get them back to serving individual clients. But one has to wonder (a) if that funding proposal will survive the legislative process, and (b) even if it does, how quickly can the system be brought up to where it needs to be? The lifetime cap would take effect on October 1; how much enhanced guidance will recipients really get by then?

The Maine study is not 100% relevant to Shumlin’s Reach Up plan, but it can’t be completely dismissed, which is what Shumlin officials are trying to do. And it’s clearly one more piece of bad news for a proposal that was already in trouble.