PAI: Where is the state headed?

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PAI: Where is the state headed?

Mon, 05/02/2022 - 5:02pm -- tim

by Jack Hoffman, Public Assets Institute The Vermont House, Senate, and governor’s office are thrashing out their differences over state appropriations for the coming fiscal year that will total roughly $8.3 billion. We’re all aware that a massive amount of federal aid has poured into the state in response to the COVID-19 pandemic. But it’s worth pausing for a moment to grasp the magnitude and the potential of all of that aid.

In the five years prior to COVID, Vermont’s annual spending averaged about $6 billion a year. Since COVID, the budgets have been: $6.3 billion (FY2020), $7.2 billion (FY2021), $7.9 billion (FY2022), and $8.3 billion (FY2023, pending).

Much of the early COVID money—and not all of it flowed through the state’s coffers—was used to protect people from the virus and treat its victims, but it also was intended to protect states from economic collapse. States faced extraordinary and unexpected costs, and fortunately the federal government stepped up to foot the bill.

Then came the American Rescue Plan, which extended and expanded some of the earlier programs, but also contained some elements of a traditional economic stimulus plan. As part of that plan, Vermont received $1.05 billion, essentially, to spend as it saw fit.

States clearly incurred costs from the COVID crisis they would not otherwise have had. But the economic stimulus money—and the fact that Vermont benefitted from preferential funding for small states—gave the administration and legislators the means to pay for neglected or wished-for projects. Before the pandemic, they sometimes rued the lack of money—as if they had no control over the amount of revenue the state collected. Now they could tackle the to-do list.

Reading the various versions of the fiscal 2023 appropriations bill, we can see compatible and competing priorities of the House, Senate, and governor: Justice System Investments, Workforce Investments, Housing and Homeless Related Investments, Broadband Connectivity, Mobile Home Water/Wastewater Improvements, Climate Response Investments, and more. What’s not clear is the picture of the future Vermont that these investments will create. In other words, what’s the vision for Vermont behind these investment choices?

Ten years ago, the Legislature enacted a statute that established the purpose of the state budget, commonly referred to as “The People’s Budget.” It talks about designing state budgets to “address the needs of the people of Vermont in a way that advances human dignity and equity” and fiscal policies that “seek to promote economic well-being among the people of Vermont and foster a vibrant economy.” It also says: “Spending and revenue policies will reflect the public policy goals established in State law and recognize every person’s need for health, housing, dignified work, education, food, social security, and a healthy environment.”

These are all goals that are critical to the well-being of Vermonters, but we need some markers to gauge the state’s progress, like the “systems of outcome measurement” called for in the People’s Budget. Most people are in favor of better jobs, affordable child care, affordable housing, racial and social equity, clean air and water, and less suffering. But when we look out three to five years from now, will the state have made any progress? To reach these goals, how many more child care workers do we need? How much more affordable housing do we need? And when should Vermonters expect the state will achieve these goals?

Gov. Phil Scott rightly describes this moment as a once-in-a-generation opportunity. But for Vermonters to share in the optimism this opportunity offers, it would be helpful—necessary, really—for our leaders to paint them a more vivid picture of the Vermont they are working to create.

 
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