A Stronger Vermont Economy
Vermont must have a strong economy in order to provide Vermonters with the incomes that they need to support their families. National economic news has been very bad. It appears that few Vermont lenders gave out fast and easy credit, so Vermont may escape the worst fallout from the subprime mortgage meltdown. It’s clear, however, that Vermont is facing tough economic times as tax revenues decline and the unemployment rate increases.
Legislators and Gov. Jim Douglas will have to work collaboratively to take action to respond to the economic downturn without causing more damage to the economy. In the last few months, the legislative Joint Fiscal Committee and Governor Douglas have agreed on spending cuts without headline grabbing accusations. More adjustments will be needed to balance the budget when the Legislature reconvenes in January.
Government has to protect its citizens, provide a safety net to the most vulnerable Vermonters, and provide essential services such as schools. There probably won’t be enough revenue to support some services that are good, but not essential, and spending on those functions will have to be cut.
Vermont’s leaders will have to work together creatively to balance the budget. We’ll have to look at areas where Vermont spends more than other states, and find better ways of providing essential services. For example, Minnesota spends roughly 30% less on education per pupil than Vermont, while maintaining good schools. The State must reduce mandates and give school boards assistance in providing high quality schools at a more affordable cost. Per pupil spending won’t decrease overnight, but progress can be made.
A budget shortfall can be an opportunity to eliminate unnecessary reviews and requirements that cost money and slow the pace of getting things done for Vermonters, businesses and government. During the budget crisis brought on by the 1990-1991 recession, as Commissioner of Taxes I spearheaded action to rethink what we did and how we did it, resulting in significant savings. It’s very difficult work, but it can be done when the Legislature and the Governor’s Administration work together.