Had the Governor and his team had it their way, this awkward conversation would have been delayed for another year or more, when the governor would have been safely re-elected for a third term. It's awkward, because while the governor likes to pose as being prudent when it comes to fiscal matters, and sensitive about raising taxes on residents who are already feeling taxed-out, the only way to pay for the mixed value of a single payer health care plan is - more taxes.
And while it's true to a point that such taxes will be offset by lower premiums for many residents and businesses, it's also disingenuous.
Insurance premium costs are flexible. Individuals and businesses can choose among a variety of plans, like we're trying to do now with the arrival of the Affordable Care Act, assuming the Website is working, which it finally seems to be, unlike last October when it was rolled out. But a tax is a tax. Pay it now, or face the unpleasant consequences of not paying it later.
Shortly after the current legislative session began, Sen. Galbraith put forward a plan that strips some of the malarkey that's been characterizing the obfuscation around how much single payer health care would cost. While in theory, the payroll tax plan envisioned by the senator isn't the only conceivable way to finance single payer healthcare, it is in alignment with the method espoused by a previous plan developed by Harvard economist Dr. William Hsaio, who was hired early in the Shumlin administration to conjure up the way such a plan would be paid for.
One can safely assume that if Sen. Galbraith, no slouch with numbers, could have thought of another route, he might have seized on it. But a payroll tax, in the end, seemed the most effective route to him.
Galbraith's plan calls for businesses to pay an 11 percent tax on their payrolls, and employees to kick in another 2 percent from their gross pay, for a total of 13 percent. That's needed to cover the estimated cost reckoned to fall somewhere between $1.7 and $2.1 billion. Yep, billion with a "B".
Folks, a 13 percent tax on wages is crazy. What it will most likely do is accelerate every employers best efforts to cut their workforce as much as possible, and only hire new workers as a last resort.
Coming up with a fresh $2 billion or so in a state where the total amount of state spending is barely $5 billion right now is a lift that only the most star struck of economists could envision. For people living in the real world, trying to run businesses or find jobs in what is still a very challenging environment, that's nonsense.
What would make sense is to continue trying to massage and make work the rather sweeping changes that have been brought into play through the Affordable Care Act. It's a laudable goal to try and expand health insurance coverage to many more people who couldn't afford it before, restructure and wring better efficiencies out of a broken system that rewards hospitals for piling on as many tests and fees as possible to offset the cost shift from those who lack insurance coverage to those who have it and pay for it. Rewarding wellness and preventative medical care, rather than running every imaginable test to insulate doctors against malpractice lawsuits, makes sense. Pushing a single payer system in a small state like Vermont that will drive jobs and businesses out of the state makes no sense.
We realize the administration is still working through the benefits package and it's still early. However, lawmakers should turn their focus on fixing the state's other big money pit - education spending.