The Pragmatist 4/15

Vermont is expecting a revenue shortfall of $150 million dollars in the upcoming budget year, which is the largest projected since 1945. Shortfalls are expected to grow each year over the next three years, and such projections do not take into account the majority of problems facing the state. The costs of teachers’ retirements, Medicare and Medicaid are only rising, while a new state hospital and vast amounts of school construction are awaiting funds. Unlike the federal government, we cannot choose to run up a massive debt. Staying out of debt leads to better fiscal health in the long term, but it means that Vermont legislators have to face some difficult choices right now.

The legislature instructed Governor Jim Douglas and his administration to find $38 million in savings in an innovative way, although it did stipulate certain service requirements. The legislature wanted to pursue some options besides layoffs and cutting programs. The resulting plan, Challenges for Change, has sparked intense debate over the scope of the changes and the speed with which they must be implemented.

The administration gave legislators exactly what they asked for — creative methods that not only aimed to balance the budget but also to deliver improved services more efficiently. The debate lies in the actual details of these methods, which address issues ranging from school district consolidation to streamlining environmental permits to care and services for mentally ill adults.

Many of the proposals were quickly rejected by the legislature, including the plan to consolidate school districts.

Legislators denounced the feasibility of merging over 280 school districts into less than 50 before July 1, the beginning of the new budget year. Environmental advocates, among other critics of Challenges for Change, are criticizing the Douglas administration for trying to change public policy instead of simply looking for savings. Legislators and community leaders asserted that the reorganization of the state’s system of care for the mentally ill was a separate policy issue and should not be addressed in this debate.

I am proud of Vermont for trying to find innovative ways to balance the budget even though the administration’s proposals include several controversial ideas. Besides the feasibility of consolidating school districts, I think we need to closely examine if and how we want to accomplish it. Increasing the ease of obtaining environmental permits does not increase efficiency, even if it does represent savings.

Regardless of opinions on the specific details of this plan, it is important to consider the administration’s goals. The architects of Challenges for Change sought not only to find savings, but also to increase the state’s efficiency in delivering public services, reaching beyond balancing the budget into making some drastic changes in public policy. Vermont bureaucracy could certainly be more effective, but the plans to increase efficiency should have been undertaken in larger part by the legislature.

Vermont is fundamentally making the right choices in looking for new ways to achieve fiscal responsibility. Looking to improve efficiency is essential in overall budget savings, but without time to fully debate these proposals, enacting many of them could lead to greater inefficiencies in the system. We need to make some difficult decisions, at the state and federal level, and Vermont is taking a step in the right direction with Challenges for Change.