Editorial: How to spend billions wisely

In any normal year, the task facing the Legislature and the governor’s administration is how to accomplish too many objectives without enough money. The legislative and administrative process is to analyze the known needs, prioritize them and allocate funding according to how much tax revenue can be justified.
But this is no normal year.
With President Biden’s successful passage of his $1.9 trillion American Rescue Plan Act on March 11, one big task facing the Legislature and governor’s office is to determine how to spend Vermont’s $2.7 billion portion of the ARPA wisely, or more accurately, how to spend about $1.3 billion, as the other $1.7 billion is directly appropriated to federal agencies, individuals, local governments, education institutions and others.
Predictably, however, the Legislature’s committee process raced ahead and immediately conceived dozens of ways to spend the money. The early measures have taken the form of three bills to date: H.315, which was recently passed by the House and Senate and became law without the governor’s signature because of spending items he didn’t think fit his criteria for “transformative” spending, and two pending bills, H. 159 and H. 484.
The governor’s office, on the other hand, asked his cabinet to conceive of a comprehensive $1.3 billion plan that would seek to create, according to a memo from Chief of Staff Susanne Young, a “foundational and transformative change, and resists the temptation to use one-time dollars to fund (on-going) programs.”
The governor’s plan outlines five major buckets: economic development, climate change, water/sewer infrastructure, housing and broadband/telecom. It allocates spending according to each bucket, itemizing each goal with a budget number that could be transformational as well as accountable.
It doesn’t take a master’s degree in finance to realize that if the goal is to spend $2.7 billion of federal money prudently, coupled with the state’s annual budget of $6.8 billion, then a centralized approach to creating that budget is required. And because Vermont will be held accountable for spending the federal money on pandemic-related projects, it’s far easier to have a single budget from which to track those specific expenses.
It’s not that the Legislature shouldn’t have an effective role in how this money is spent, or that they have major disagreements on the state’s long-term priorities. For the most part, they’re in sync with the administration. The disagreement is on the approach — piecemeal via committee, or centralized — and reflects the political power structure in Montpelier.
That said, the first rule of spending this federal money wisely is to recognize the strengths of weaknesses of each body.
That said, an effective role the Legislature could take is to question the creativity of the administration’s proposal and to slow down the governor’s train.
Vermont has four years to spend the $2.7 billion. It is likely not wise to presume that the best and brightest ideas have emerged out of the administration’s Montpelier cocoon in the past four weeks.
While we can appreciate the state’s effective handling of the pandemic, in general, and that the administration has a sense of community need via its visits to work sites across the state for the past few years, that’s not the same as assembling a top-notch team of outside experts to think anew. And thinking anew should be the goal.
To be transformative, the state must look ahead to what’s needed, not in the rear view mirror to solve yesterday’s problems.
For example, is spending $21 million more on a decades-old weatherization program — popular as that idea may be — the highest use of funds, or would doubling the electric vehicle infrastructure (pegged at $25 million) be a better return on investment. We don’t know, but we’d like to see the analysis. Is the $170 million devoted to water/sewer infrastructure — all necessary projects that would include incentives for cities like Vergennes to fast-tract an upgrade to its city system — the best use of that money, or would that be better allocated under the upcoming trillion-dollar infrastructure plan President Biden hopes to pass later this year?
We’re excited to see $249 million allocated to address Vermont’s critical shortage of housing in the administration’s proposal, a plan that would bring 5,000 housing units to market by the end of 2024. But with the labor shortage facing Vermont making hiring help in that sector next to impossible, is it realistic to do with Vermont contractors or will many of the bigger, more lucrative jobs be contracted out-of-state — reducing the economic benefit to Vermonters?
In short, while we applaud the administration’s hard work to create a detailed proposal that is accountable and holistic, legitimate questions abound that, if answered, could make this $1.3 billion shot in the arm even more productive.
As the governor and his administration have said repeatedly, the goal is to use this one-time money in the wisest ways possible.
To that end, there are some categories that are straightforward and need immediate attention, like building out the state’s broadband connectivity; some immediate housing measures; and numerous parts of the $143 million economic development proposal.
But not every penny of the federal money needs to be allocated by the session’s May adjournment. Vermont has the time to meet with industry experts; to fine-tune proposals with professional input; to brainstorm with innovators who might help the state see new ideas to old problems. It need not take months, but even a few added weeks could bring critical insight. If that means reconvening in late June to pass the governor’s proposal, we’re certain it would be time well spent.
Angelo Lynn

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