Thursday, October 29, 2009

Tough Budget Ahead

We have tough choices ahead of us for the coming budget. Below is an opinion piece written by the chair of Vermont's House Appropriations, which is where the budget is created.

Vermont Values and Sustainable Budgets
by Rep. Martha Heath (D)

In June, the Vermont Legislature passed, over the Governor’s veto, a balanced budget. This budget was built on the values that Vermonters elected us to reflect; responsibility, concern for our neighbors, and shared sacrifice.

Both the legislature and the governor faced a $90M general fund shortfall. While each of us proposed solutions to this shortfall, our solutions differed from the Governor’s.

Our balanced budget was built on the principle that in difficult economic times everyone must be part of the solution. We cut budgets for the people who rely on state services. We asked state worker to contribute. We asked Vermonters making over $250,000 to share in the required sacrifice by paying more in taxes. We were also able to make investments in creating jobs and providing a tax cut for middle class Vermonters. In the end we made sure Vermonters were getting value for their tax dollars.

The Governor’s approach was different. He asked the poor, the sick and seniors to bear most of the burden and asked nothing of wealthy Vermonters. He also asked property tax payers to shoulder more burden. He relied heavily on shifting the cost of teachers’ retirement to the property tax, effectively raising property taxes for all Vermonters.

The legislature’s values led them to conclude that sharing the pain was a better solution. We solved the same problem the administration solved with its budget proposal; we just chose to solve it DIFFERENTLY.

The Governor and his advocates like to say our budget is not sustainable. To some degree they are right. Next year’s state budget would have been easier to create under the Governor’s plan because your property taxes would have been higher. We agreed that education has to contribute to the solution but didn’t feel that higher property taxes were the right solution.

The Governor also seems to question the use of federal stimulus money (often referred to as ARRA money) sent to the states by the federal government to ease the pain in this difficult time. While there will be difficult decisions to be made when this money runs out, it seems irresponsible not to let Vermonters benefit from the opportunity created by this federal money. There are roads and bridges all over Vermont being repaired by this money and workers that would otherwise be unemployed had we not spent this money wisely. Does it make any sense to deny Vermonters this opportunity?

Vermont faces an extremely difficult challenge in building budgets for the next few years. Make no mistake, the budget that will finally pass next year will cause a lot of pain. We are facing an $80M “hole” and an even larger one when the ARRA funds run out in the following year. Things we value as a state will be cut or reduced in scope. People who depend on the state for services will suffer.

Ultimately, the real questions will be who bears the pain and what values will the budget reflect. Vermonters need to engage in the conversation and let both the governor and their legislators know what they value most as budget season approaches in order to build this very difficult budget in the best way possible.

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