In August, the state’s economists gave us the back-of-the-envelop prediction that we would be staring at a $400 million hole in our budget if things continued as they were. Five months later, Gov. Phil Scott delivered his 2021 budget address noting that not only is the state’s $6.8 billion budget balanced, and fully funded, but that we have an additional $210 million to spend as we wish.
It would hard to choreograph a better outcome for what can only be called an economic catastrophe. The economy was shut down for months, yet we end up with bags and bags of unexpected cash.
So pinch us, what’s the bad news? What don’t we understand?
Well, the reason we’re flush is that the federal government has sent us roughly $5 billion in aid and stimulus money. A considerable portion of that is courtesy of Sen. Patrick Leahy who made sure that the aid was not portioned out on a per person basis. No state received less than $1.25 billion, which means Vermont received a larger share [on a per person basis] than almost any other state.
So, yes, seniority does matter. That’s the biggest reason we have $210 million in extra money to spend.
That excess was doled out by the governor in his budget speech Tuesday. It went to broadband, weatherization, outdoor recreation, affordable housing, brownfield remediation, renewable energy, tourism, bike paths, etc. The governor’s proposed budget now goes to the Legislature, which will make its own recommendations.
That’s the challenge. There’s nothing more difficult for legislators than to be prudent when showered with extra cash. The nature of the beast is to give to people and the more you give the happier they are and the more they remember when the next election rolls around.
While that’s good for those on the receiving end, it’s almost always a problem for long-term spending and for taxpayers. The stimulus money is a one-time event. Great care has to be taken to not to obligate ourselves to future costs we can’t afford.
Much of the governor’s budget was focused on one-time spending needs. Infrastructure in particular. It’s beneficial to deal with brownfield sites so the municipalities affected can use the land for economic development purposes. The one million dollars to extend sewer and water from MVU to the Highgate Airport is essential; that money alone could pave the way for hundreds of new jobs involving the expansion of the airport. It could serve to solidify the entire western part of Franklin County as a manufacturing hub. Finishing the 98-mile Lamoille Valley Rail Trail is also a key consideration for Franklin, Lamoille and Caledonia counties.
But it will be crucial for the Legislature to consider each dollar spent asking whether that one-time money is being spent in a way that generates a return, and whether it establishes long-term value. One time money should be accompanied by the requirement that it produce a return for the taxpayers.
Perhaps the best example of this examination process is the $20 million the governor has plugged in for the Vermont State Colleges. That $20 million is on top of the $30 million, which is the system’s current appropriation. That’s no where near the amount of money that was recommended by the consultants who recently issued their report on the health of the VSC system. The consultants recommended the yearly appropriation be upped from $30 million to $47.5 million with another $25 million in one-time money to help pay for a whole-system transformation. So closer to $75 million.
The consultants recommended that Castleton University, Northern Vermont University and Vermont Technical College be consolidated into a single school, leaving CCV alone. Further, the consultants recommended that the state double what it gives the system for at least the next five years.
That’s it. There is no Plan B. It’s a plan whose success depends on the Legislature spending more and for enrollment to increase.
But the number of students in Vermont continues to decline. And there is no guarantee the Legislature will agree to double what they spend on the system.
Before the Legislature agrees to spend an extra $20 million it needs to know what the changes are and how, as the governor asks, this broken system is repaired? Throwing money at the problem isn’t an answer.
We may never again have an extra $210 million to spend. If there were ever a time for a cost-benefit analysis of what is being spent, and to be able to defend it for the investment it should be, this is it.
by Emerson Lynn