Shumlin’s budget gets mixed reviews
By PETER HIRSCHFELD
Vermont Press Bureau | January 25,2013
MONTPELIER — It didn’t take long for the praise to begin flowing after Gov. Peter Shumlin delivered his highly anticipated budget address Thursday afternoon.
“There were a lot of good things,” said one prominent lawmaker. “For the most part, I think there were way more positives (than negatives) in the governor’s speech.”
Another key legislator said the fiscal year 2014 budget proposal “leaves us very hopeful that we can begin a discussion to make sure we’re living within our means while not letting anybody slip through the cracks.”
“It’s a positive image that he tried to present, and we can certainly try to work with him,” the lawmaker said. That those words were among the more positive reviews of the second-term Democrat’s speech is notable only in that they belong to Rep. Don Turner and Sen. Joe Benning, the top-ranking Republicans in the House and Senate, respectively.
Shumlin on Thursday doubled down on a poorly received plan to reduce tax exemptions for poor people, and threw in some welfare reform to boot.
He even invoked the words of Ronald Reagan (“There is no better social program than a good-paying job”) to make the case for a proposal that would limit to five years the amount of time an individual can receive welfare checks in a program known as Reach Up.
Turner was impressed.
“We think the governor taking that on is a good thing,” the Milton Republican said. “At least he’s talking about it and putting that on the table, and ... since I’ve been here we’ve never gotten that far.”
Less enthralled was the left wing of the governor’s own party. The Democratically controlled Legislature offered mostly uninspired applause as Shumlin delivered his budget address in the well of the House. Afterward, many Democrats and Progressives were eager to supply stinging criticism of a proposal described by turns as “sad,” “unbelievable,” “not inspiring” and “scary.”
Rep. Chris Pearson, a Burlington Progressive and leader of his party’s House caucus, said he remains excited about Shumlin’s call for $17 million in new child care subsidies for low-income parents. He said he remains bewildered by Shumlin’s continued insistence on reducing the earned income tax credit — a program that benefits about 40,000 of the lowest-wage earners in Vermont — to fund it.
“We have a governor with Progressive priorities and Tea Party funding schemes,” Pearson said.
Pearson said he’s pleased to see the governor “at least acknowledge” the need for new revenue. In addition to raising millions by cutting tax exemptions for the poor, Shumlin’s budget included a proposed new tax on “tear-off” lotto tickets — a largely unregulated game of chance commonly found in private clubs and bars.
That money would be used to fund home-weatherization programs and renewable-energy subsidies. But Pearson said he’s discouraged that the governor has already dismissed out of hand a proposal to increase tax rates on filers in the top income bracket.
“I don’t understand his desire to go after a program that impacts 40,000 low-income Vermonters and to protect 4,000 of the wealthiest,” Pearson said.
Advocates, too, sounded the alarm after Shumlin’s speech. Peter Sterling, director of the Vermont Campaign for Health Care Security, lauded the administration for coming up with a plan to lessen the increase in health care costs for the approximately 20,000 Vermonters facing higher premiums and deductibles. The increases will come when they’re required next year to purchase insurance in the exchange.
“However, this proposal just doesn’t go far enough to hold people harmless.
The affected Vermonters are currently enrolled in either VHAP or Catamount Health, both of which will disappear when the exchange goes into effect. Shumlin’s plan uses $10 million — he raises it with a 1 percent tax on health insurance claims — to offset some of the higher expenses. But Sterling said some people could still see their out-of-pocket exposure go up by nearly $2,000.
“People can’t really afford it now, and any increase in cost will only exacerbate the problem,” he said.
Sen. Anthony Pollina, a Progressive/Democrat from Washington County, took aim at Shumlin’s plan to limit welfare benefits to five years over a lifetime. Shumlin said Vermont is the only state in the country right now without a time limit on benefits.
Another reason cited by Shumlin for the change: “We have seen our welfare rolls grow and our state budget strain under the pressure.”
Pollina said rising enrollment in welfare is no reason to stem the flow of resources to low-income Vermonters.
“There’s a reason there’s been an increase, and the reason is there’s more people in poverty,” Pollina said. ‘‘We act as if poverty is not a legitimate issue. Why he would target a program that allows poor Vermonters to put food on the table is beyond me. He has no problem asking low-income Vermonters to sacrifice in times of fiscal trouble, but he’s not willing to ask for anything from wealthier ones? It makes no sense.”
Not every Democrat will be opposed to Shumlin’s way of thinking, of course, and neither have Republicans issued anything close to a full-fledged endorsement of his plan. Benning said he remains troubled by the lack of details on the administration’s plan for single-payer health care, for instance. Turner said he isn’t so sure about the tear-off ticket tax.
Asked how the budget address went over with his caucus, House Speaker Shap Smith said it would likely be greeted with “skepticism.”
“My sense is that people are pretty cautious about it,” Smith said. “My guess is that many of the proposals that have been put forth, people might have some skepticism about.”
In the face of “big challenges” that he said will “require more tough choices and restraint,” Shumlin said his $5.34 billion budget “matches Montpelier’s appetite for spending with Vermonters’ ability to pay.”
The proposal represents a 3.69 percent increase over current-year spending and, according to Shumlin, closes a $67 million general fund shortfall without raising broad-based taxes.
It does include some major new taxes, including a proposal to increase gas taxes by $28 million. Shumlin left that detail out of his speech, though the plan was pitched to the House Committee on Transportation minutes after the governor left the House chamber.
Of consternation among his left-leaning colleagues, Senate President John Campbell said Shumlin’s budget is just “an example of having to deal with a budget in difficult fiscal times.”
“It’s not going to be pretty, and I think there are going to be people who look at it and say, ‘You are Democrats — how can you do that to certain populations?’” Campbell said. “And unfortunately I think a lot of those people are folks that don’t understand the complexities of a budget.”
Chris Curtis, staff attorney at Vermont Legal Aid, said the choice doesn’t need to be between which programs to cut.
“This is a false choice between the earned income tax credit, which is a worthy initiative, and greater access to affordable child care, which is also a worthy initiative,” Curtis said. “We don’t have to choose. And we’re never going to win the war on poverty if we pit low-income working Vermonters against each other.”
Eric Davis, professor emeritus of political science at Middlebury College, said Shumlin’s speech recalled for him the welfare-reform-peddling Bill Clinton of the mid-1990s.
“He needed Republican support in Congress to get those reforms through, because of opposition from some Democrats,” Davis said. “Political analysts look back 15 and 20 years later and say that’s what made Clinton a successful president.”
Davis said he wonders if Shumlin is ripping a page from the Arkansas Democrat’s playbook.
“It looks like he’s following that road to get centrist support and put together a bipartisan majority on some of the fiscal issues while relying on Progressives and progressive Democrats for some of his more liberal initiatives like single-payer and marijuana decriminalization,” Davis said. “You remember with Bill Clinton it was all about triangulation, and maybe we’re seeing that here with Peter Shumlin.”