As a business owner and an active participant in public policy discussions for the last 35 years, I have come to the conclusion that Vermont’s state budget process is broken. For years, Vermonters have watched as multimillion-dollar deficit numbers fly about and observed much hand wringing by state officials and advocates for various causes. Our Legislature then meets and miraculously a budget is reached that temporarily “solves” the problem. In the end, however, the Legislature has continued to spend more than our revenues and has patched together a crazy quilt of one-time items to be able to claim a balanced budget. In fact, our budget is not truly balanced and we have underfunded some of our legal obligations to pension and retirement funds. The average citizen certainly cannot keep up with the action and we are all left in the dark with a process that is ripe for reform.
Often we hear the term “sustainable budget” tossed about, but there is no common definition or process to achieve a sustainable budget. Vermonters understand what is sustainable for their households and should expect a similar sustainable budget for the state. It is time to take a broader and longer-term view of our needs and a process to meet those needs. We must also build a common understanding of the process to achieve a budget for the state that is not based on short-term fixes and questionable shell games. It should be able to be understood by Vermonters who are the ultimate funders of the budget.
The first step is to avoid as much political wrangling as possible. The new process should look to the future and not the day-to-day operations. We must make sure we put the long-term needs of Vermonters ahead of any short-term political goals. This will not be an easy process, and reasonable people will disagree at times, but we will be serving future Vermonters with our efforts.
Second, we should look to history and see what we can learn about Vermont’s ability to spend responsibly without harming our citizens or putting ourselves in a situation where we face downgrades on our bond ratings. By looking at historical data, we can determine a range of spending that fulfills the responsibilities of a humane government. While we must meet the needs of citizens, we also cannot spend so much that our tax burden scares away healthy, well-paying businesses and Vermonters who contribute greatly to the fabric of our communities.
Next, we must understand the larger economy of the country and the world and the inevitable cycles of economic growth and of economic retraction. While we sometimes like to think of ourselves as insulated away from the national and international turmoil, we really are connected very closely with the world economy and should plan on good times being followed by more challenging times. Our budgets on the state level should produce some excess revenue in good times and perhaps small shortfalls in the bad times. A budget that would perform within this range over a period of time would be sustainable for future Vermonters.
Vermont’s citizens, Vermont’s businesses, and Vermont state government itself would all benefit from a budget process that evolved from a structure and process that was durable and predictable. The ability to look down the road further would boost our economy and allow more thoughtful decisions to be made by all Vermonters. With a more structured and consistent process, our Vermont economy will grow faster and our citizens’ lives will be enhanced. To move forward, we should:
1. Work to define a sustainable budget — one which would produce surpluses and fill our reserve funds in good times and one that will, with judicious use of reserve funds, allow us to get through bad times without harming our most vulnerable citizens.
2. Look closely at long-term revenue prospects and long term needs of Vermonters. We are an aging group and will, like much of the country, be seeing less people working and more people at least partially retired .
3. Look at the proper level of “rainy day” reserve funds and discuss how and under what circumstances they can be used.
4. Review and plan for fulfilling our legal obligations to state funded retirement plans.
Finally, it is important to remember that while it is the obligation of government to meet the essential needs of its citizens, it is also the obligation of government to be as efficient and as effective as possible. Our government must make sure that when it requires citizens to send tax dollars to Montpelier that the money is of greater benefit to the overall society than it is to individuals and families. This is a tough test and one that must be part of a new, more thoughtful, long-term budget plan.
Mark Snelling, Starksboro