Waterbury Record, May 27, 2010
The 2009-2010 biennium finished with a rush late on Wednesday, May 12 — the big bills were negotiated between the House, Senate and the Douglas Administration in a way to avoid vetoes. The bills — the budget, the tax bill and Challenges for Change — represented compromises that held plusses and minuses for all of us. There are many things in each that were positive and many things that were difficult to give. But compromise we did, and in a way we were certain will bring both the best and “not the worst” to fruition.
What we did not compromise on, however, was our commitment to the values that make Vermont a special place to live — our work will provide the tools people need to create new jobs, our work created and/or strengthened policies that will bring our state back to fiscal health sooner than other states in the union, and our work avoided the devastating cuts to programs that are helping our neighbors survive this economic downturn.
We did not do this alone, of course. The Challenges for Change program was jointly developed between the Douglas administration and the General Assembly. Inherent differences about how the proposed savings will occur still remain, but by dealing with some of the more highly charged issues that bog down the budget discussions annually in this separate bill, and in a way that proposes real change rather than simply offering budget cuts, we feel this was a step forward and a great improvement over last year’s contentious session. Neither the administration nor the General Assembly wanted to see this session end on a negative note.
Other people helped, too. The school teacher’s union, Vermont NEA, responded to the governor’s desire to increase the property tax by shifting the state’s share of our teachers’ retirement pensions — a promise made to our teachers in the 1940’s — from the General Fund to the Education Fund. The union collaborated with their members and the state treasurer and fashioned a compromise that returned $15 million to the General Fund this year alone — nearly 10% of the projected budget gap. State employees signed a two-year contract that reduces their pay by 3% over the next several years, and your legislators took a 5% cut in pay for the same duration. Local school boards did their best in holding costs steady, and succeeded in such a way that the state was able to set the statewide property tax at $0.86 and $1.35, two cents lower than planned.
We also closed that $155 million gap without threatening the lives and well-being of our neighbors who have seen the darkest underside of this recession: our elderly, our children with special needs, our disabled and our unemployed. It was hard enough to close this gap without an increase in broad-based taxes, but we felt it incumbent to protect the programs that are seeing unprecedented demand — not only because it was the right thing to do, but to acknowledge that the short term gains would be wiped away in the very near future with the larger costs of dealing with these issues in the most inefficient ways possible. In-home care or nursing home care? Community health care services or emergency room services? I think we made the right calls.
But there were difficult decisions to make as well. An example of this was the Unemployment Insurance bill. How do we fix a problem that was thirty years in the making without hurting business or the unemployed? We can’t — and so the compromise made between the General Assembly and the administration shares the pain. Businesses will begin to see their premiums corrected to levels closer to today’s median income level, and the unemployed will begin to experience a one week delay in receiving benefits in 2011.
The Legislature also restructured and unified our judicial system in a way that will guarantee our right to justice for years to come. The Capital Bill, which funds state projects, will provide jobs throughout the state and the Transportation Bill, still the recipient of ARRA money, will fund more roads and bridges improvements. We see it here in Waterbury with the ARRA-funded sewer project in the Village, and we will see improvements to the railroad crossing on Demerritt Place that will enable Green Mountain Coffee Roasters to expand again in our downtown.
And, finally, we banned texting while driving for all and cell phone use for junior operators. We expect this law to improve the safety of our highways and roads. We also created a process and criteria for the recognition of our Abenaki citizens in a way that we expect to provide them with the dignity they deserve after these many years of fighting.
While it is a relief to have finished our work for the session, it is clear that we will have as much if not more to do next year, no matter who sits in our seats. This is an unprecedented era of recession and lowered revenues, at least in most of our lifetimes. There will be more restructuring of our government, and we will need your input more than ever. Please remain in touch and feel free to share your ideas.
Richmond Times Ink, June 2010
The 2009-2010 biennium finished with a rush late on Wednesday, May 12 — the big bills were negotiated between the House, Senate and the Douglas Administration in a way to avoid vetoes. The bills — the budget, the tax bill and Challenges for Change — represented compromises that held plusses and minuses for all of us. There are many things in each that were positive and many things that were difficult to give. But compromise we did, and in a way we were certain will bring both the best and “not the worst” to fruition.
An example of this was the Unemployment Insurance bill. The UI trust fund has run out of money and in order to bring it into balance, we are borrowing money from the federal government. We are not alone in this — nearly every state is doing so. In fact, we are among the last to have to borrow. As nice as that sounds, however, we are still in a position of need. The fundamental problem with the UI fund, coming into the session, was that the “median” salary used to compute the insurance premium had not risen since the early 1980’s. The original intent was to have this median rise as salaries rose, which makes sense when benefits paid out have to match present day costs. This lack of indexing, however, was a flaw that was exposed during this economic meltdown: we had not collected enough premiums to cover a period of major job loss. With 20-20 hindsight, requiring the median to rise to today’s level of $21,000 would have provided every single penny to see us through. But no one foresaw the devastating effects of such a serious downturn on the UI Fund until it was far too late.
What to do? A sudden rise in UI premiums would be damaging to businesses, and asking the unemployed to pay a part of the difference was like adding salt to the wound of job loss. The federal government offered loans at no or low cost, but the state still needed to come up with a solution that would bring the fund back into the black as soon as possible. This fix, for which we were talking about hundreds of millions of dollars, would not be easy to find, not when health insurance costs are rising well over the rate of inflation or when businesses have seen their profits and sometimes equity disappear or when we are experiencing high unemployment.
By the end of the session, the negotiations between the House of Representatives, Senate and Douglas administration had formed a compromise that had something for all of us to dislike, but planned to bring our UI Fund out of the red within a reasonable period of time with fixes that will not take effect for a year or two. Compromise has allowed changes that are far less onerous than proposed and are far enough out so that any unexpected upturn in the economy will allow the most difficult fixes to be mitigated.
The UI conundrum was just one of many this session. The fiscal situation remains daunting for the next several years, and in an year like this, we worked hard to simply hold the line as best we could. If Challenges for Change is given an opportunity to allow cultural changes in how services are provided, it will be more than just a budget cutting exercise. If we can continue to raise revenues in a way that pay for our human services thoughtfully and professionally, we will make it through. And if we can trust our communities to fund their schools in a prudent and positive way, we will retain our excellent educational system.
While it is a relief to have finished our work for the session, it is clear that we will have as much if not more to do next year, no matter who sits in our seats. This is an unprecedented era of recession and lowered revenues, at least in most of our lifetimes. There will be more restructuring of our government, and we will need your input more than ever. Please remain in touch and feel free to share your ideas.