Progs Question Gov’s Funding Vision for Education

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Emphasis on educational priorities in Governor Shumlin’s inaugural address was met with restrained enthusiasm by Progressive legislators, who spoke out today in a press release.

Like many of us, they recognize that the devil is in the details, and as desirable as pre-K and higher educational opportunities are for Vermonters, how those initiatives are funded is critically important.

Already known for his reluctance to raise tax contributions by the wealthy, the Governor’s address suggested only one potential funding opportunity, the Earned Income Tax Credit.

The legislators are concerned that the Governor’s vision for redirecting support from the EITC will mean that new educational opportunities will be built on the backs of those least able to afford it.

Asking the Governor to take another look at alternative funding for the initiatives, Anthony Pollina (P-Washington) made the following observation:

Diverting money from the Earned Income Tax Credit shifts funds away from those who need it the most.  It is a new tax that hits lower-income Vermonters hardest.  Some may say this is not a broad based tax.  But it is worse; it is a tax targeted at those least able to afford it: low-income Vermonters, working families, and others struggling to make ends meet.  It is tax that would affect over 40,000 Vermonters.  The Earned Income Tax Credit is recognized as one of the most effective anti-poverty programs in Vermont.  Cutting it contradicts our focus on building a state budget that puts people first.”

His concerns were echoed by Chris Pearson (P-Chittenden) and Susan Hatch-Davis (P-Orange)

Susan Hatch-Davis:

“As someone who represents an area of the state with a high level of poverty, I want to say this funding source is a bad idea.  It will hurt families who are continuing to struggle in this economy.  This change isn’t a question of scaling back and buying a Lincoln instead of a Cadillac.  The Earned Income Tax Credit helps families afford groceries and heat.  This is bare-budget stuff.

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Addendum by jvwalt: I was at today’s announcement, and I’ll attach a few more points to Sue’s summary… after the jump.

Additional notes by jvwalt:

Rep. Chris Pearson said that “using the earned income tax credit to fund this is not a serious proposal. I have yet to hear from any Democrat who supports this idea. Republicans have articulated their concerns, and Progressives are solidly opposed to this funding scheme.”  He noted that he’d just heard Republican Lt. Gov. Phil Scott speak out against an EITC cut, and said he couldn’t remember the last time he jumped up and down at something Scott said.

Pearson also said the Progs are working on alternative funding schemes, and implied that they might be trying to work around Shumlin’s steadfast opposition to income tax hikes:

We’re preparing some packages that would look at more than just the income taxes we’ve proposed in the past. There are a number of things where Vermont is quite unique; for instance, we’re one of only eleven states that doesn’t tax natural-resource extractions. There are some tweaks to the estate tax we could look at.

Standing in the background at the Statehouse news conference as the Administration’s Ghost-In-Chief, Human Services Secretary Doug Racine. He’d apparently been dispatched to represent Shumlin’s point of view, which he dutifully delivered. Racine noted that the EITC has grown by about 45% in the last seven years, due to increases in the federal allotment. (The state EITC piggybacks on the federal, so the two rise or fall in lockstep.) “The Governor… sees an opportunity to shift resources to a place where we an get a better bang for the buck.”

Racine estimated that the typical EITC recipient would lose about $370 out of a total annual benefit of roughly $2600.

And on the one hand, yes, it’s substantially more than recipients were getting just a few years ago. But on the other, I doubt that too many of those recipients are feeling particularly flush these days. And, as Pearson noted, while the Governor objects to “broad-based tax increases,” a proposed hike in the income tax on high earners would affect about 4,000 families — while Shumlin’s proposed EITC shift would affect more than 40,000.  

About Sue Prent

Artist/Writer/Activist living in St. Albans, Vermont with my husband since 1983. I was born in Chicago; moved to Montreal in 1969; lived there and in Berlin, W. Germany until we finally settled in St. Albans.

One thought on “Progs Question Gov’s Funding Vision for Education”

  1. I wanted to link to the full press release but didn’t find a link online.

    So I am atdding Senator Pollina’s and Senator Pearson’s full remarks  to this comment:

    Senator Pollina’s complete remarks:

    Progressives appreciate the Governor’s focus on strengthening educational opportunities, from early education to higher education.  However, we disagree with the Governor’s proposed funding method for early education and wish to offer suggestions to reframe the search for solutions.

    Diverting money from the Earned Income Tax Credit shifts funds away from those who need it the most.  It is a new tax that hits lower-income Vermonters hardest.  Some may say this is not a broad based tax.  But it is worse; it is a tax targeted at those least able to afford it: low-income Vermonters, working families, and others struggling to make ends meet.  It is tax that would affect over 40,000 Vermonters.  The Earned Income Tax Credit is recognized as one of the most effective anti-poverty programs in Vermont.  Cutting it contradicts our focus on building a state budget that puts people first.

    Rather than tax those who are least able to afford it, we ask the Administration to take the time to look at other funding options.  When raising revenue, we should start by asking those who can afford it to contribute more.  One possible funding source would be a small increase in taxes paid by the highest income Vermonters – those making over $200,000 a year – who for years have paid less because of the so-called Bush tax cuts.  Lowering their tax break by raising their tax rates less than 1% would meet the Governor’s goal for early education.  Ending tax loopholes that benefit primarily the wealthy and large corporations, ending unnecessary tax expenditures, and possible reforms to the capital gains tax could also be considered.

    The Administration should convene a working group of employers and other stakeholders to study an equitable funding plan for early education and childcare.  One of the greatest beneficiaries of better early education and childcare is employers.  A 2002 report  on the Economic Impact of Vermont’s Child Care Industry found, “Many companies… believe there are substantial benefits from offering child care services: 62% of respondents reported higher morale, 54% reported reduced absenteeism, 52% reported increased productivity, and 37% reported lower turnover.”  It also noted that “New Hampshire businesses lose as much as $24 million a year because of child care-related absenteeism,” and “the John Hancock Mutual Life Insurance Co. found that every dollar invested in family-friendly policies paid back $4.17 (in employee time, retention, performance, stress reduction/health care cost prevention).”

    We should also allow early educators and childcare workers to organize a collective bargaining association to most effectively engage in efforts to solve the challenge of early education in Vermont.

    We also believe the Governors approach to higher education misses the real issue: the high cost of Vermont State Colleges. Vermont State Colleges are among the most expensive in the nation and state support for them has been dismal. Since many of the jobs of the future will require a college degree we must take a longer term approach to making our state colleges affordable for all qualified Vermonters.  The Governor’s plan to repay some graduates for their last year of college is laudable as part of a broader policy but, it is not a solution.  

    The first draft of the Governors’ education agenda earns a “C” on its merits, but since there is time, we give it an “incomplete” and cite the need for improvement.

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    Representative Pearson’s complete remarks:

    I would like to add to the statements we’ve already heard.

    I applaud the priorities of universal Pre-K and affordable Higher-Ed.  It is something progressives have advocated for years.  However, using the Earned Income Tax Credit to fund this is not a serious proposal.  I have yet to hear from any Democrat that supports the idea.  Republicans have articulated their concerns and Progressives are solidly opposed to this funding scheme.

    There is no reason to cut the most effective anti-poverty program in Vermont.

    Governor Shumlin, as you know, objected to our proposal last biennium to increase taxes for wealthy Vermonters.  He said he was opposed to broad-based tax increases, even though our proposal only impacted fewer than 2,000 families.  By contrast, this proposal hits over 40,000!

    Governor Shumlin is a skilled politician and I fear this is a diversionary tactic.  Perhaps he hopes his laughable revenue plan will be enough to distract lawmakers and advocates from the budget cuts expected next week.  We will not be distracted.  We will work tirelessly to protect those the economic boom of previous decades left behind.  And we won’t let the Shumlin administration pit working families against one another.

    Vermonters deserve better and these important priorities are worthy of a serious funding mechanism.  I look forward to offering a package of funding options in the coming weeks so that we can answer the real needs Vermont faces around early and secondary education.

    Thank you.

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