The 2011 legislative session was remarkable in several ways: First because it resolved a $176 million budget deficit; second because the Legislature launched several progressive initiatives — including a health care reform bill, a jobs bill, an initiative to reduce recidivism, a telecommunications bill that will bring broadband to every home in the state, improved government transparency, and a renewable energy bill among other initiatives; third, because it didn’t depend solely on spending cuts but also approved a modest tax bill of about $24 million; and fourth, because it wrapped up the session a week early under what was practically a love fest all around the table.
What a difference a year makes, and what a difference it is to have a partisan sweep in the House, Senate and governor’s office.
But in this particular session, legislating was the easier half of the bargain. It will be much harder creating action plans that produce the results the majority in this Legislature so eagerly anticipates. That’s because these major legislative accomplishments did more to set a process in motion than pass action plans that would produce immediate results.
In particular, this is the first year of a multi-year-long process in health care reform that will hopefully reap cost savings in future years, though Vermonters are not likely to see any reductions in their health care bills during the next year or two. The bill’s first step creates a special five-member board and instructs them to figure out how to reduce health care spending, improve patient care, simplify administrative expenses and strengthen recruiting and retention of health care professionals.
The board has until after next year’s November election to make its report and recommendations — giving the governor and his team a little wiggle room in case the board comes up short in identifying practical ways to realize the expected savings.
But that’s not to dismiss the Legislature’s accomplishments this session. On the contrary, Vermont is one of the few states in the nation that took on major new initiatives in the face of an uncertain economy and tight budgets. While other states were bickering about whether to pass additional tax cuts on the wealthy, or slash state education budgets to the bone, or dismantle important social programs for those citizens most in need, Vermont raised taxes on cigarettes by 38 cents per pack as part of its $24 million in new taxes; found another $9 million in revenue; made tough choices that cut $88 million in spending, plus found another $60 million in one-time funding to achieve a balanced 2012 fiscal year budget.
Not everything was perfect, however. The Legislature accepted a $23 million reduction in transfers from the general fund to the education fund, which means local residents will have to decide whether to reduce school expenses or agree to make up that difference in local property taxes next March. Gov. Shumlin also twisted some arms to get a lower per-pack tax on cigarettes (the Senate had proposed $1, then came down to 53-cents, which was low enough), but the compromise settled on a miserly 38-cent tax — depriving the state of needed revenues and missing an opportunity to further reduce health care costs. And, in a move that seems to undercut its own efforts to lower health care expenses, the Legislature passed a Shumlin-inspired tax on hospitals that hurts many of the state’s hospitals in a gambit for the revenue it needed to balance this year’s budget.
Nor is all the bad news over, as next year’s projected deficit is pegged at about $70 million — an improvement, but still another healthy chunk of change, especially as it will be the fourth straight year of belt-tightening on state spending.
So, it’s not a budget to love, but it is a budget Vermonters can be proud of, and it was a legislative session that was remarkably upbeat for the times and forward thinking. That the Legislature approved the bulk of the governor’s agenda as he set it out in January is also a resounding success for Mr. Shumlin’s first year in office and bodes well for the next few sessions to come.