Montpelier's budget: Whack-a-Mole

Both legislature and governor are alarmed by the first-ever reduction of the statutorily required transfer of funds from the General Fund to the Education Fund. This $14 million revenue reduction will increase the education property tax burden. Neither side likes this idea, but both will probably agree to it.

The Democrats have taken to styling themselves as the friends of the property taxpayers, and this year even lowered the base state property tax rates by a nominal one cent. At the same time the same Democrats are firmly against any effort to reduce educational spending, for instance by introducing competition and choice into the unionized government-monopoly school system.

Looking past the battle of the budget, there is a thin silver lining. A growing list of leaders in both parties are showing signs of getting the message that good fiscal management requires more than playing budget whack-a-mole when revenues come up short. It requires a concerted strategic plan to reassess what state government does and how it does it, in light of the tax revenues the state's taxpayers can realistically be asked to pay.

Secretary of State Deb Markowitz, a Democrat considering a run for governor, recently agreed that the state needs "rational plans for restructuring state programs to maximize efficiency in getting measurable results from taxpayer dollars."

Democratic Auditor of Accounts Thomas M. Salmon, a CPA often mentioned as a future candidate for governor, goes further. He cites the successful experience of Washington state, that faced a $1.5 billion deficit in 2002. With the support of both parties, Democratic Gov. Gary Locke initiated a ten-week process to shift the focus from spending cuts and tax increases to finding a better and more lasting result for the people of their state.

They identified the tax dollars available, set priorities on what the people most wanted their government to do, paid for those programs, and stopped.

By June 30 the Vermont budget crisis of 2009 will most likely be over. It is also likely that all parties involved in that exhausting process will be more open to a better way of prioritizing what government does, finding more efficient ways of doing it, dropping low priority programs, and living within the revenues produced by the present tax structure.

This will mean stepping on some powerful interest group toes, but it has to be done - or Vermont will simply slide toward eventual insolvency.

John McClaughry is president of the Ethan Allen Institute (www.ethanallen.org).

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