Editorial: Speaker’s beef: Give credit for fiscally sound budget

Before talking about next year’s legislative priorities in a 45-minute phone conversation on Tuesday, Vermont House Speaker Shap Smith wanted to talk about a beef he had with the press coverage of the past session. Why, he wondered, did the press not give the House credit for proposing and passing a more conservative budget than what the governor proposed? Why did the House get lambasted as a hotbed of progressive legislation and liberal leanings, while the governor was seen as pro-business and moderate by comparison?
Fair question. The House did propose a budget almost $20 million less than the governor’s initial plan, and it did so, Smith says, because House leadership believed it was the fiscally prudent and conservative thing to do.
“Look, it’s not like we didn’t want to propose more spending on things state residents need, and we could have easily gotten the votes the pass a higher budget,” Smith said. “But we didn’t because we were concerned the federal sequester would cut more next year and we wanted to set aside at least $8 million to make up for that, and also because our financial numbers didn’t look that good at the start of the session… We were being responsible.”
It’s a legitimate beef, but there’s also a plausible response: The controversy concerning the budget became how the Legislature was proposing to raise revenues, not how much they were spending. The administration’s beef with the House budget focused on the litany of taxes they had proposed to raise to meet their expenses, while the governor’s budget message was that Vermonters were already spending enough money for state government but that those funds needed to be reallocated to get better results.
It should be no secret to the Speaker or House leadership which message has the more conservative ring.
That’s why the buzz around the governor’s proposal to place some limits on Reach Up, the state’s welfare-to-work program, had traction in the hinterlands. It rang true with a lot of rank-and-file Vermonters. The very idea that the state’s welfare system did not cap benefits, but allowed them to be extended uninterrupted for a lifetime, demonstrated to many residents that the governor had a point: we’re spending enough money, let’s just cut some programs and shift money to other programs that do a better job of solving the problem.
While that notion caught fire outside the Montpelier beltway, it didn’t gain any traction among fellow Democrats and was flatly rejected by the far more liberal members of the Progressive party. In the end, it had very little support in the House and never made it out of committee.
Will some idea along those lines have traction next year? Perhaps, Smith says, though he cautions that the Reach Up program in particular has been touted for years as one of the most successful anti-poverty program in the state with a high success rate getting Vermonters retrained and back into the work force.
“But should we be looking at making our anti-poverty programs more successful? Sure,” the Speaker said. “We need to ask the question: Are we correctly identifying the forces that are keeping people in poverty, and then address those problems.”
Asked what his plans were to stimulate economic development and job growth, Smith said his philosophy was that government should lay the foundation for a sound economy — a good transportation system, telecommunications, broadband expansion — ”and then get out of the way of the private marketplace.”
“Government is not good at picking winners and losers,” Smith said, adding that when it tries, it usually backs a loser and squanders public money.
Would spending more on education be considered laying the foundation for a strong economy? Absolutely, the Speaker said, but added that the state has pretty much maxed out its per-pupil spending for secondary education. “I think that at $17,500 per student, we’ve pretty much hit our limit,” Smith said, adding that education is one area in which he agrees the state needs to figure out a way to allocate those resources better.
As for the prospect of raising taxes next year, Smith says that tax reform will definitely be on the agenda next year and that their last-minute push last week to place a cap on tax deductions would be a priority next year, even though the governor says it will not be one of his top 10 priorities. Smith says he has been a supporter of the Legislature’s Blue Ribbon Tax Commission report (as is the governor), and that the principle of establishing caps on itemized deductions was first proposed and championed by that commission.
“My tax philosophy,” Smith said, “is that whenever we can broaden the base and lower the rates, that’s something we should work toward.”
On the political front, Smith acknowledged that perception can sometimes become the public’s reality and that the current perception of the House is that it’s leaning far to the left with outspoken Progressives like Rep. Chris Pearson. Keeping forces like Pearson in check will prove to be a challenge to Smith’s political career if he decides to run for governor once Gov. Peter Shumlin steps down in three or more years and if he faces a popular moderate opponent like Republican Lt. Gov. Phil Scott.
It’s a concern, Smith conceded, but he chose not to speculate on politics that far removed and brought the conversation back to his original point: Just give us credit for being fiscally conservative when it’s due, he joked, and let the politics take care of itself.
Angelo S. Lynn

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