May 28, 2015

As had been predicted, the 2015 Legislative Session – one of the most unusual sessions in my memory – came to a close late Saturday, May 16, 2015.

From opening the session with a Governor, who did not receive a majority of votes on Election Day, facing a challenge in his quest to retain his seat; to a large protest by angry single payer advocates dominating the Governor’s Inaugural Address; and from the unceremonious ouster of the longtime Sergeant of Arms; to the tragedy of the arrest in the final days of the session of a sitting Senator.

Between these bookmarks, however, there was work that had to be done. 

We again faced a significant budget deficit – this one at $113 million; had the EPA demanding a real effort on the water quality in Lake Champlain; and had Vermonters clamoring for property tax relief, and meaningful economic development efforts.  And, on these notes, there were both positive developments and significant disappointments.

First and foremost, I am pleased to report that we concluded the session with a sound economic development bill.  While not a comprehensive, long-term strategy for economic growth, the bill includes several provisions that will, indeed, move the economic dial here in Vermont. 

  • Necessary changes to the Vermont Economic Growth Incentive to ensure more Vermont companies are able to take advantage of this program that has more than proved its worth in helping to create jobs; 
  • The elimination of the sales tax on prewritten software accessed remotely (cloud tax);
  • A first-time homebuyer down payment assistance program to help young professionals around the state into home ownership through the creation of a revolving loan fund;
  • An economic development branding and marketing initiative to complement and supplement our tourism marketing efforts - including a $200,000 appropriation to create and implement it;
  • A Vermont-Quebec Enterprise Initiative to recruit and expand into Vermont Canadian businesses interested in a US location - including a $100,000 appropriation to fund the program; and
  • An increase in our Licensed Lender limit from $75,000 to $250,000.

Last year, my former colleague, Democrat Paul Ralston and I joined together to found a bipartisan political organization focused on electing candidates to the legislature who shared our desire to focus on growing our state’s economy.  We then joined Lt. Governor Phil Scott is hosting the first ever “Economy Pitch – Priority One on Day One,” on the first day of the legislative session.

As a result of these efforts, it was evident that the debate shifted and attitudes changed a bit this year.

For the first time in recent memory, people from all sides of the political spectrum were discussing ways to grow our economy.  While there continued to be battles over legislation that would put additional burdens onto our small businesses, there was also recognition that the private sector needed our support as well.  And, the economic development bill was a way to do just that.

The legislature also took a meaningful step forward this year in addressing the clean up of our state’s waterways and lakes.

For too long, we have allowed phosphorus and other pollutants to build up in Lake Champlain and other waters in Vermont – from farms, roads, parking lots, and other developed areas.  It is now a demand of the US Environmental Protection Agency that we do something to address it, or they will.  So, finally, the clean up of those waterways has become a priority for legislators from across the political spectrum.  This bill, while not everything that some wanted, is a positive and much-needed first step in a very long process. 

With regard to the state budget, the situation in which we found ourselves this year has become the new normal.  In fact, I don’t recall a year when we haven’t over estimated our predicted revenues and have not had to make the necessary modifications to our state budget.

What started with a $94 million budget gap for the Fiscal Year 2016 budget fast became a $113 million gap.  Arguably an incredible challenge, it was clear from the beginning that both the Governor and legislative leadership were determined to raise taxes on Vermonters to cover some of the shortfall.  To be clear, this financial situation was both predictable and preventable, as we have continued on an unsustainable spending path for years – watching as our spending significantly outpaced our revenues.  I was hopeful that this year we would do a better job of balancing the needs of Vermonters within our current revenue picture.  I was hopeful that we would do it in a smart, strategic way – by examining all departments agencies and programs for efficiency, effectiveness, duplication of services, and necessity - and, by doing so, bringing state government into the 21st century.

Instead, the final state budget includes increases in taxes and fees into the General Fund of $31.9 million.  This amount, coupled with the predicted growth in revenues of $35.2 million, allowed additional revenues of over $67 million for the General Fund.  While there were also some important reductions in spending in some agencies and on certain programs, General Fund spending is increasing by 4.2% over 2015 – at the same time that overall growth in the economy is at less than 3%. 

Finally, the most frustrating item on the agenda this year was education reform.  Throughout the 2014 campaign season, Vermonters clamored for education reform and property tax relief.  And, candidate after candidate promised that it was their number one priority.

So, how did we do?

We have now consolidated even more power over the education of our children in the hands of the state; and have set us on a path to eliminating local school districts and school boards; yet nowhere on education funding reform or property tax relief.

I do not believe this is what most Vermonters wanted or expected.  I know it is something with which I have significant concerns.