ST. ALBANS — Given the state’s fiscal challenges, his four primary opponents aren’t being realistic in what they are telling voters, according to Democratic gubernatorial candidate Doug Racine.
“I think they’re living in campaign land, which says, nothing bad can ever happen with a $100 million deficit. We can fix it without it costing us anything at all. There’s too much of it in Washington,” Racine said.
Racine has been in and out of state office since he was first elected to the Vermont Senate in 1980. He served as president pro tem during the administration of Gov. Richard Snelling and the recession of the early 1990s.
He served as lieutenant governor during the administration of Gov. Howard Dean, narrowly losing the 2002 race for governor to Jim Douglas.
Racine sat down with the St. Albans Messenger recently to discuss his views on education, energy and the state budget.
“In tough economic times, I’m trying not to overpromise,” Racine said.
The state has a projected deficit of $100 million for the next fiscal year. Whoever is elected governor will have to present that budget to the Legislature in January.
In promising to fill that hole by “jump starting” the economy, saving money through a single payer healthcare system or improving Corrections, his Democratic opponents are not being realistic, Racine said. All of those things are admirable goals and things the state should work on, but they aren’t “going to help the next governor put together a balanced budget to present to the legislature next January,” Racine said.
A BALANCED BUDGET?
“I’m hearing people say we can balance this budget without cutting any services, without using any revenues and, ‘Oh, by the way, I’ve got all these great plans that are going to cost a lot of money but don’t worry, I’m going to find it.’ That’s the stuff of campaigns,” Racine said.
“I’ve tried to be really straight forward with people and say, this is going to be tough,” Racine said. “To cut $100 million out of this budget will not be acceptable to Vermonters, and it is certainly not acceptable to me.”
The cuts proposed by Republican Gov. Jim Douglas last year would have harmed elderly and disabled Vermonters, Racine said.
Even though the country is in a deep recession and the state is facing budget shortfalls and revenue losses, the state cannot afford to stop investing, in Racine’s view. “I’m in a business … that’s not making a whole lot of money these days. … But can I skip on the investments that I need to make? No. You still have to make good business decisions,” Racine said.
In making cuts, the state also needs to be wary of simply shifting costs elsewhere, in Racine’s view. As an example, Racine cited cuts in mental health services that police chiefs have told the Legislature increased law enforcement and health care costs.
In order to fill the budget hole, Racine said he would implement proposals from the 2005 effectiveness commission which could save the state $20 million to $30 million a year, but looking at the revenue side, meaning use of the rainy day funds and possible tax increases, was unavoidable.
“When you look at the revenue side … you start by looking at the rainy day funds. I do not want to raise taxes on Vermonters while we have tax money that was paid during good times, sitting in a reserve fund. That doesn’t make any sense to me,” Racine said.
Many businesses in Vermont have expressed support for taxing Internet purchases, according to Racine. One music business owner in Burlington told Racine his business is an Internet showroom. Customers come in, try out the instruments, then purchase them on-line in order to avoid the sales tax.
Racine said he would consider taxing soda and some junk foods. “It’s regressive but I have less problem with the regressivity of it because you’re taxing something that’s really not very good for people. It’s like cigarettes. We’ve done it with cigarettes. We do it with alcohol. I want to look at that,” Racine said.
When asked about the claim of his Democratic opponent, Sen. Peter Shumlin, that the state has no taxing capacity left, Racine replied, “Taxing capacity is … partly an economic issue, and it’s partly a political issue. No, I don’t think Vermonters want to pay any more in taxes. And a lot of Vermonters are strapped. A lot of higher income Vermonters aren’t so strapped. Is there taxing capacity there? Yes. Do you want to use it? Not necessarily.”
Racine pointed to the tax increases supported by his opponents. Shumlin proposed increasing the capital gains and estate taxes. “Jim Douglas and Brian Dubie supported an increase in the sales tax as part of Act 68, if you remember. We’ve seen more vehicle fees go up. The governor proposed a steep increase in property taxes to fund teacher’s retirement plans. I mean, other folks have talked about various revenue sources … I want to talk about money that’s already been paid, and things that might make some good business sense for us,” Racine said.
Racine opposes 100 percent school choice. “I think that in a rural area like this … it wouldn’t become real school choice. Only those families who have the ability and the interest to move their kids around town would be able to take advantage of it,” Racine said.
“My concern is those who are left behind would end up in a school where it would go down hill, because if enough parents removed their kids there wouldn’t be much public support left for that school. Those kids probably would be lower income kids (and) would probably be stuck,” Racine said.
At the high school level he would like to see limited school choice continue. However he pointed to evidence indicating school choice is more often based on sports programs than academics.
The state has been shifting costs from the general fund to the education fund, Racine said, pointing to Corrections education programs, adult education programs, and even some mental health services that are now being paid for with property taxes.
“Those things are getting shifted because it helps the state government balance its budget,” Racine said. “So there’s one of the reasons for higher property taxes, which has absolutely nothing to do with what’s going on in the classroom. “
Thus far the conversation about reducing education costs has “been very antagonistic between the governor and the Legislature, on one hand, and our school districts on the other hand,” Racine said.
“I do not want to sacrifice the quality of education and I would try to sit down, in a more cooperative relationship, with our school board associations, superintendents ,and teachers and principals and say, ‘We’re all in this together. You tell me what the state could do to help you save costs,’” Racine said.
Speaking of specific factors in rising school budgets, Racine said, “I was on a school board for three years. I know what health care costs are doing to our budget.”
Racine said he believes there is savings to be found in pooling purchasing and administrative expenses, including professional development costs and special education.
Racine also talked about the student-teacher ratio. He said he had visited schools with fewer than 10 students in at a given grade level. “I don’t think that’s sustainable,” Racine said.
“But most of the increase in staffing has been coming from individual aides,” Racine said. “More and more children are showing up in kindergarten and first grade, with behavioral or emotional problems.,” Racine said.
“That’s not going to change overnight, but I believe we need to make an investment in early childhood programs, Success by Six, those sorts of things, so those kids get off to a better start. I think we can see some reductions in costs there,” Racine said.
On the topic of income sensitivity currently used as a factor in determining tax bills, Racine said he is reluctant to set a number on where income sensitivity should end without a through review. Wherever the level is set, Racine said he would prefer to see income sensitivity phased out rather than stopped abruptly. “I am concerned that we’re income sensitized up to a certain point, and all of a sudden just people over that income would see a huge increase in their property taxes, because of income sensitivity,” Racine said.
Racine said he supports closing Vermont Yankee, primarily because of the issue of nuclear waste. The waste is being left for future generations to deal with, Racine said.
“When you factor in the cost of disposing of that, or storing it for thousands of years, I don’t think the power is a whole lot cheaper. But if you don’t put those costs onto the ledger, yeah it looks cheaper. So we’re creating a highly toxic waste that’s going to last thousands of years, and until we figure out how to deal with that, no, I don’t favor relicensing Vermont Yankee … we’re not accepting all of the costs of it. I think we aught to pay for what we want,” Racine said.
On energy policy more generally, Racine said he would look at the issue as a regional issue and wok with other governors in the northeast as well as “move aggressively though to see how much of our power demand we can satisfy either by reducing that demand, or using various renewables.”