There are countless benefits being conducted in Vermont on behalf of those affected by Tropical Storm Irene, and they are raising significant amounts of money. Last weekend’s Phish concert in Essex Junction raised $1.2 million on behalf of the state’s disaster relief fund. In Waitsfield, a solo concert by Grace Potter being hosted by Sugarbush Resort is expected to raise $350,000 for a local relief effort in the Mad River Valley. Similar events are happening in central and southern Vermont with each passing week.
Together, they represent a fair amount of money and, more importantly, a collective sense of purposeful humanity.
The empathy will continue and the collections will add to the coffers of those towns and the inhabitants most affected. But it will not be enough.
Preliminary totals are crawling into the hundreds of millions of dollars in damage. The majority of the damage, which was to roads and bridges, will be paid for by the federal government — taxpayers from one end of the country to the other. As well they should. We are a nation of states and Vermonters have always been quick to aid others in their times of need.
There are at least two major categories of federal aid: the 75 percent match, and the 90 percent match. In both cases, the remaining percentage is split between the state and local governments. The 75 percent category is the more common, for obvious reasons. The state will likely push for the 90 percent match, and we may qualify or we may not — it depends on a formulaic cost per capita of damage done.
In truth, we just don’t know the extent of the damage, the cost of rebuilding, or how cooperative the federal government will be.
But we are already hearing estimates of a half billion dollars in damage, and even 10 percent of a half billion dollars — or $50 million — is more than the state and town governments have lying around in spare change. And if the state is asked to pony up for the 25 percent match, that’s $125 million — and that’s just to restore what was destroyed.
But the dire needs of central and southern Vermont will only be part of the discussion that will take place in Montpelier when the legislative session resumes in January. While progress has been made in reducing the budget deficit — the joint fiscal office revised its budget deficit downward in August from an estimated $70 million in the red for fiscal year 2013 to $45.6 million in the red — the state still faces a stalled economy, a social infrastructure that has been whittled to its skeleton, and now, a larger than ever need for a mass infusion of road and bridge replacement and repair.
Gov. Shumlin and the legislature must decide how they can best respond to this short-term challenge. To the governor’s credit, the state has been quick to provide towns with state and federal support. Funds have been made available to pay the private contractors who have made Herculean efforts to get the state’s roads and bridges usable again in record time. And most recently the governor announced a program to employ the state’s unemployed to help repair damage done by the storm.
These efforts, while noble, are just scratching the surface; more is needed.
But efforts to provide more resources are complicated by the very real possibility that the national economy is lapsing into another recession. And to the extent that such a recession would hit the wealthiest income earners the hardest (particularly if the stock market dives as it did in 2008-09), then Vermont’s progressive income tax structure could make the state particularly vulnerable to another dip in revenues.
We can argue all day about the most effective way for the federal government to stimulate the economy, but it should be painfully obvious to everyone that budget cutting — while necessary long-term — is precisely the wrong thing to do at the moment.
Vermont may be the postcard for that debate. If the feds are unduly tight with what the checks they send us, then we will lag in our recovery efforts and our economy will suffer.
At the state level, the debate follows similar lines. We can’t cut our way to recovery. That doesn’t mean ignoring the deficit. It does mean focusing state spending where it’s the most productive, and in our circumstances it’s most productive when it builds something. Others need not apply.
It also may mean being open to ideas that, in the past, were heresy to some. Raising the tax on gas at the pump is one.
The math is convincing. Raising the gas tax a nickel generates an estimated $23 million annually. If the revenue were raised to cover the bond costs required for reconstruction needs (roads and bridges), Vermont could make major changes in upgrading the sad state of our long-noted, dilapidated infrastructure. And such investment would also stimulate the state’s economy, not only with the immediate infusion of work for equipment operators and engineers, but also as a long-term investment that builds for a stronger economic future. The Legislature should also consider indexing the tax to inflation so we don’t continually find ourselves on the short end of the maintenance stick.
The gas tax is also more palatable than other taxes considering that a sizable percentage is paid by visitors from throughout the Northeast and Canada. Nor do many of those guests notice the difference in gas prices. Vermont’s gas tax is less than most of our neighbors. In New England, only New Hampshire levies a lower state tax than Vermont, and the gas taxes levied in New York and Quebec are far higher. Furthermore, it is a tax that can be dedicated to fixing the damage done to the state’s roads and bridges by the very people who most use it.
This will be part of the all-consuming budget debate that looms before the next session of the Vermont legislature. It will require all of us to have open minds.
Emerson Lynn/St. Albans Messenger