Shummy’s Big, Big Budget Day II (the Sequel)

In my previous post, I gave some bullet-point highlights of the Governor’s FY 2014 budget plan. Now, some additional info and an overall reaction.

Health care on track, but no funding source yet. The Governor’s budget wasn’t the only big document to drop today; the Administration also released a pair of reports on health care reform. As delivered by Director of Health Care Reform Robin Lunge and Commissioner of Health Access Mark Larson, it was a rosy outlook on the prospects for Shumlin’s health care reform plan. Both were confident that a single-payer system would deliver better quality health care and provide it to all Vermonters, and that the cost of the new system (to launch in 2017) would be lower than the cost of the current system projected out for five years.

Which is a hell of a qualifier, if you think about it.

However, the Administration has yet to identify a funding mechanism for an estimated $1.6 billion in annual costs. Instead of recommending a single method, the Administration is giving the Legislature a laundry list of possible mechanisms. As Lunge put it, “We must have a robust conversation about funding sources.”

Yeah, robust it will certainly be. The full report, all 156 pages of it, can be read online here.

After the jump: Overall thoughts on the budget, positive and otherwise.

The Governor’s budget, IMO, does some things very well. Some very careful thought and a bit of creativity went into a plan that closes a $67M budget gap AND provides for some key Shumlin initiatives without raising broad-based taxes. It’s very impressive in many ways.

It is disappointing in a couple of big ones:

1. The spending cuts and revenue increases are largely regressive in nature. There’s the new five-year lifetime cap on participation in the Reach Up antipoverty program.

There’s the tax on “break-open” tickets sold in many bars and fraternal clubs, which will help fund energy assistance and efficiency programs. Those tickets benefit many local charities and worthy fundraisers, and are bought by the middle class folks who largely populate the Elks Lodges and VFW Halls of the world.

There’s the unspecified transportation revenue boost, likely to come from some kind of increase or shift in the gas tax.

There’s a shift of $4.4M from the universal tobacco settlement to help pay for human services programs; in today’s world, most smokers are in the poor and middle classes. They will be indirectly hurt by this diversion of funds.

And, most notoriously of all, there’s the plan to slice Earned Income Tax Credit payments by $17M, to pay for better chid care and pre-K education. Again, a worthy goal, but is EITC really the best way to fund it?

2. Missed opportunities. The Governor should rightly be credited for pushing ahead with single-payer health care and an ambitious renewable-energy agenda, and his education plans are laudable. But there is a need for bold action on other fronts as well. And given the drastically weakened condition of the Vermont Republican Party, the Democrats need not fear any short-term political backlash.

So why not push some other bold initiatives? Our need for a major investment in clean water was not mentioned at all. Also, he could have staked out a solid position on reforming the transportation funding system, which is going to need a major overhaul instead of an incremental approach.

There was some good work on holding human services relatively harmless. But some of the funding mechanisms are purely temporary, and the problem will only come back in a year. Why not lay out the actual human needs and a comprehensive plan to address them?

Given the unmet needs in our state, the Dems’ nearly absolute hold on political power, and an opposition party that even its chairman admits won’t be ready to contend for at least another four years, why not step forward and plot a courageous course for the future?

Shoot for the moon, Governor. Even if you miss, you’ll land among the stars.  

3 thoughts on “Shummy’s Big, Big Budget Day II (the Sequel)

  1. “There’s the tax on “break-open” tickets sold in many bars and fraternal clubs, which will help fund energy assistance and efficiency programs. Those tickets benefit many local charities and worthy fundraisers, and are bought by the middle class folks who largely populate the Elks Lodges and VFW Halls of the world”  Obviously your time on the bar stool in blue collar bars is rather limited.  To think it is only middle class folks who buy these tickets is folly. You need to spend more time cruising North Street in Burlington.

  2. I worked at a North Street bar sixteen plus years ago. Patrons would often sign over their entire paychecks hoping to buy the paycheck back with their anticipated winnings. It was very sad to see the desperate looks on their faces when they realized their gamble hadn’t paid off that week and they would have to go home without a paycheck. And, this happens a lot more often than most people conceive is possible. I agree with jvwalt’s assessment that “this proposal is likely to be very unpopular in certain circles”. The bar owners and bartenders will likely be in front of the fight against this tax, not for their benevolent defense of their right to help charities, but because it’s been a great unmonitored stream of revenue for both. It wasn’t unusual for patrons to tip out bartenders 5-10% of their winnings (untaxed income) and it’s foolish to believe that bar owners are giving 100% of the proceeds from this gaming to nonprofit causes. Unfortunately, as is often the case with revenue generation through gambling, this will be a regressive tax.

  3. to have this big healthcare reform thing being played, but taking so long to remotely identify how much the average Joe/Joette is going to pay for it and from where.   IF it does not somehow tap into something OTHER than earned income, someone should be taken out and tied to the stake.   Far too many trust fund and stock market rich kids in Vermont to let that slide….

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