Burlington Vermont Gov. Peter Shumlin’s recent budget speech is a vain attempt to craft a legacy of fiscal responsibility. But, it’s too late for that; the damage is done to both Vermont’s fiscal standing and the Governor’s legacy.
Some housekeeping is in order. Governor Shumlin points a finger at former Governor Douglas for the state’s fiscal woes; but state fiscal records reveal otherwise. Governor Douglas vetoed the fiscal 2010 budget not because it spent too little, but because it spent too much. It was Senate President Pro Tempore Shumlin and House Speaker Smith who in June, 2009 lead the veto override and henceforth set Vermont on its current unsustainable spending trajectory.
Governor Shumlin’ speech didn’t mention the $938 million in one-time federal stimulus funds Vermont received through fiscal 2011. Shumlin used these funds to both supplant general funds eroded by the Great Recession and grow base spending until these funds ran out in 2012. Then, Governor Shumlin, not Governor Douglas, raided $23 million from the education fund to prop up his unsustainable spending trend line.
About taxes - Governor Shumlin says, “This will be my sixth budget that does not increase income, sales, or rooms and meals tax rates”. Tax rates, maybe; but taxes, certainly not.
Over the past 6 years income taxes (capital gains and deduction restrictions), sales taxes (sugary drinks), rooms and meals (vending machines), gas taxes, cigarette taxes, health insurance claims taxes, property taxes, and numerous fees, among others, have all increased by the Governor’s actions. For fiscal 2017, the Governor can say he’s not raising “income, sales, or rooms and meals tax rates” while increasing fees on mutual funds and new taxes on doctors and dentists. And so it goes.
Bottom line, since 2010 general fund and state fund spending generally, exclusive of federal funds, have grown at the respective rates of 5.3% and 5.2%, inclusive of the 2016 budget adjustment now before the legislature. In a Vermont economy experiencing 2 to 3 percent growth, the Governor’s (and legislature’s) aggressive spending of state taxpayer dollars drives the now annual fiscal hazards of budget gaps and higher taxes.