Vermont's state budget is in trouble. Everyone knows that state spending can't continually grow faster than Vermonters' paychecks. Yet our politicians keep making the same mistake year after year. They spend their way into a shortfall, then scramble to raise revenues to balance the books.
Under Governor Shumlin's leadership, the state budget for the past five years consistently has been growing faster than the economy. Each year, the Governor has created a "budget gap" that has had to be filled with new revenues on top of tapping out reserve funds and exhausting one-time funds. This year he proposes to raise revenues by taxing doctors and dentists and raising fees on mutual funds, which will certainly be passed through to Vermonters.
Even more dangerous are the actuarial and accounting maneuvers that we don't see, but which push our problems into the future and magnify their impact. We save money today by underfunding pensions – but the effect of compounding over time raises costs significantly and puts our retiring teachers and other public employees at risk.
We have also tied up tens of millions of state reserves in illiquid long-dated loans, threatening the safety of our rainy day funds.
If we want to protect the vital state programs and benefits that Vermonters rely on, then we must take a different budget course beginning immediately.
There are no silver bullets or simple solutions. Here are 10 of the steps that Vermont should take to have sounder fiscal practices.
1.Limit the growth of state spending to 2% per year for the next three to four years. We must bring spending in line with revenues.
2.Require agency and department heads to collaborate across state government to deliver 1.5 percent in additional savings.
3.End the practice of tapping reserves and relying on one-time funds.
4.Conduct an audit of the Medicaid program to ensure eligibility standards are met and that we are in compliance with state and federal requirements.
5.Require full compliance with best practices for issuing state contracts. 41% of contracts recently reviewed by the State Auditor are sole sourced, which is inexcusable. Through increased contactor competition the taxpayer will get a better deal.
6.Repeal the state health care exchange and transition to the federal health exchange. We cannot keep pouring money into a Vermont Health Access administrative budget that has tripled since Fiscal Year 2011.
7.Integrate programs across State government, eliminating silos, so that State employees are better able to collaborate and deliver the best possible service to all Vermonters. We should not be duplicating efforts with overlapping programs.
8.Transition the Human Services delivery model to a common-view-of the-client. Establish clear goals and measurable outcomes to ensure that constituents are well-served and taxpayer money is well spent.
9.Restore $10.3 million to the State Health Care Resources Fund.
10.And, most importantly, have a commitment to working really hard. Good intentions will not produce good outcomes without a competent administration that follows through with persistence and determination.
These steps aren't necessarily easy, but they are important and urgent. Unfortunately Governor Shumlin doesn't seem ready to do the hard work. For example, regarding efficiency in government, the Governor said, "if it were that simple it would've been done by now." On tackling the state's Medicaid challenge the Governor said he would, "let brighter minds, I guess, try to figure it out."
As governor, I would build a balanced, sustainable, transparent and honest budget that is fair to all Vermonters. Taxpayers won't be asked to shoulder a greater burden every single year. Vital programs will be operated more effectively and funded appropriately so that our most needy continue to have all the support they deserve. Businesses will have the confidence to invest, because they will see that the state is on a sound, sustainable fiscal course.
It is time to change the culture of our state government. Instead of scrambling around reactively, let's have a forward-looking strategic budget process. Let's lift the numbing inertia of business as usual, and create a goal-oriented work environment where our great state employees are empowered to provide the highest level of service. State government can serve all Vermonters well, but it will take a leader committed to hard work and positive change.
Bruce Lisman of Shelburne is a Republican candidate for Governor of Vermont.