Now
that the governor’s proposed budget is before the legislature, my committee has
pivoted to a deep dive into the Human Services elements of the budget.
We
are all facing an average property tax increase of close to 20% on the one part
of the state’s overall budget that the legislature has little control over:
education spending. This is adding to the pressure on the Democratic majority
to hold down increases in the general fund budget, yet additional new taxes are
still under consideration to pay for other increases. The governor’s budget
holds growth to match existing increases in revenue, but in reality, that will
result in some cuts in services because just paying overhead absorbs those
revenues.
That’s
the dilemma our school boards have faced, and their response has been to
increase budgets to meet perceived actual needs. The tally from around the
state is a proposed $240 million increase in budgets, compared to a usual
average increase of about $30 million. While local voters approve their own
budgets, each district also bears a big part of the costs of what every
district does in combination.
***
How
Did We Get Here?
There
are multiple factors, ranging from inflation to the desire to backfill lost
federal bonus dollars. One of them, however, was directly tied to the change in
“pupil weights” the legislature made last year. One student does not equal one
student, when it comes to counting them for the purpose of the state’s
contribution to a local budget. They are “weighted” based on the fact that some
students cost more to educate in order to spread the statewide funds equitably
based on actual costs.
Towns
such as Berlin and Northfield did not see any significant change, but some
wealthier districts lost pupil counts. They were protected from mega-one year
tax increases by a cap set on how much would be attributed to them, so that the
increase would be spread over five years. There was an unexpected result of
that 5% cap. Other school districts took advantage of the cap to bolster their
own budgets, knowing that they could go above 5% without increasing the local
share. That was a big contributor to the $240 million statewide increase.
It’s
important to note that neither the Northfield nor Berlin districts did this and
as a result, will not be harmed by the current legislation that is attempting
to fix it. That bill is now moving through the legislature, and towns that made
larger budget increases will have to pay more on their own; the hope is that
they will whittle some of that down, with the result of reducing that 20%
statewide increase at least by a bit.
***
The
State Budget
While
the education budget is in the hands of the cumulative votes of school
districts, the rest of the state’s spending falls in the lap of the
legislature, which faces all the same cost pressures. Do we cut services to
balance the budget? Do we increase taxes to keep all else level? Do we meet new
needs by greater tax increases? Which are needs, and which are merely desires?
How do we choose among these priorities?
This
is the time when I truly despair in facing my own committee’s work. The fact
is, we do have real needs that are not being addressed. Our committee has the
job of identifying the amount of money needed to address them, and then leaving
the Appropriations Committee to choose from what can or cannot be down. Approps
must weigh those against all the other components of the budget: funding to
address climate change, the judiciary (which still has a major COVID backlog),
all of health care, investments to improve the economy, just to name a few.
Next week, we face a bill that will add major costs to electric generation in
the important interest of achieving cleaner energy production. Where does that
fall on the difficult priority item list?
Homelessness,
with increases that have come about primarily because of decades of lack of
maintaining adequate housing stock, is high on our agenda. Virtually everyone
agrees that the top priority is increasing the backlog in housing unit construction.
But that takes time, and it is how to bridge the gap in the interim that is in
dispute.
The
governor’s budget proposes to eliminate open access under the “cold weather
exception.” It would keep the exemption only for households with children,
adults over age 65, third trimester pregnancy, and those on disability income. The
proposal goes further than just a return to pre-COVID criteria, because the
28-day per year limit would be reinstated, but the special 84-day limit that applies
in certain catastrophic situations would be eliminated.
These
limits only apply to the “emergency housing” criteria, meaning receiving a
voucher to stay in a hotel. There are no such exclusions for staying in an
emergency shelter. A major problem, however, in that we do not have enough
shelter beds to accommodate everyone who could otherwise be left on the
streets.
The
governor’s budget adds millions to increase these shelter capacities, but even
those take time to open. By next winter – even under the assumption that some
folks can find housing on a friend or relative’s couch – we would likely be
seeing more people with no access to shelter at all. There are some being
turned away on the coldest days even this winter, for lack of capacity. Experts
do agree that mental health needs, addiction disorders and the like contribute
to the challenge of stable housing but are not the primary reason for our
crisis, which is simply not having enough housing.
If
this was our only state need, we could probably find a way forward. By holding
the budget at a level of growth that is below inflation growth factors, numerous
agencies funded by the state are effectively facing cuts. These include our
skilled nursing and home health agencies, the agencies which provide mental
health and development disability supports, and support to children through
such as our parent-child centers.
As
with schools, we have some staggering and critical “deferred maintenance” costs.
The IT systems supporting child welfare, for example, are the very oldest and
most antiquated in the country! A worker addressing a child taken from a home
for abuse can’t open just one computer file to check on history or even the
child’s current status. It puts kids in danger, and there is almost certainly a
tie to the fact that we have a rate of removing children from families that is
high above the national average.
Our
juvenile justice system is scrambling without the capacity to provide secure
places for children in major crises with high levels or risks of violence. That
is driving plans to build new institutional beds for them in a way that I
seriously fear is a pendulum going out of control in the opposite direction. In
the next two years, plans are rolling out that will add 42 locked institutional
beds to hold or treat those ages 19 and younger, contrasted to about 24
currently.
I
am not trying to make a case for major increases in spending. We can’t achieve
that. But it does means assessing every expenditure carefully and identifying
the truly highest needs. One item that has laid our budget so thin this year
has been decisions made over the past several years, such as the massive
investments in making childcare more affordable. It was an important investment
that had wide support, but that I voted against because of the weight of
contrasting needs.
And
every citizen and each legislator representing their constituents sees the
priorities differently. Democracy is about coming to sometimes unhappy
outcomes. The weight of statewide voter opinion right now – based on elections
– is to spend more to achieve a greater number of priorities. I believe we need
to be far more discriminating in how we spend tax dollars, but I have my own
priorities that cost money, and if each of everyone’s were fully met, we’d
collapse financially as a state.
Based
on strong constituent input, one of mine is to reduce taxation of military
retiree benefits, which comes at a very small loss to the state’s tax revenue.
In the latest survey data, Vermont ranked a dismal 50 out of 50 among states
with financial stability for military retirees. These folks are often still in
prime wage-earning years and can fill critically needed occupation gaps and
contribute to the tax base if we don’t chase them away.
My
other is the Medicare cliff: the way Vermont drops health care support like a
hot potato when someone with low income turns 65. There was an excellent news
piece describing this last week in VPR, which you can read at: https://www.vermontpublic.org/local-news/2024-02-02/capitol-recap-some-low-income-vermonters-face-sudden-spike-in-health-care-costs-when-they-turn-65
***
Thank
you for the honor of representing you. Please reach out anytime to me
(adomahue@leg.state.vt.us) or Rep. Ken Goslant (kgoslant@leg.state.vt.gov) with
questions or input. You can receive my biweekly reports by email request.
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