Shumlin’s 5% Solution

Burlington’s own Free Press, fresh from moving into new digs, digs meatily into Peter Shumlin’s recent budget address. And by meatily, I really mean “lightly nibble around the edges”.  Because no one wants to break a tooth off during their high-powered analysis.  That might drive up health care costs.

Generally speaking, the governor has presented a budget with a 5% increase. Since Gross State Product in 2013 was up a sub-whopping .1%, one can clearly see that Peter’s 5% increase in state spending is reasonable.

You don't need reality; you just need a budget.  Until you have to pay bills.  Then yes, you need one.

You don’t need reality; you just need a budget. Until you have to pay bills. Then yes, you need one.

Because, after all, government spending is a component of GSP, so when that spending goes up, GSP looks better – even though 1/3 of the state’s budget is federally funded.  The mind boggles at the mathamagician’s ability to pass this off as sage and reasonable budget-making.  Best of all, though, Shumlin wants us to assume that tax revenues will increase due to economic recovery:

Shumlin said the 4.7 percent increase in the budget — 3.6 percent in the General Fund spending — would be covered by increased revenue from current taxes as the economy continues to recover.

Laughable, if the assumption didn’t involve the dollars that Vermonters earn.  Oh, and since several thousand people left the workforce last year, will they be mailing checks to Montpelier from whatever state they moved to, so Peter’s budget will balance?  My inbox remains unfilled with stories of business expanding widely in Vermont, and hiring lots of Vermonters.

In other words, it’s another day in the Vermont paradise that is Peter Shumlin’s Montpelier, where there will never be consequences for proposing a significant increase in state spending when the state’s economy is in the tank, we have at minimum at $70 million hole in the state budget (a hole that never would have appeared with the Vermont Health Care Exchange website debacle, but hey, we have to throw tens of millions at contractors with a track record of failure, don’t we?  By law?), we have an ongoing exodus of working-age Vermonters, and aside from one or two positive notes like Dealer.com (unerringly highlighted by Shumlin, as if he had anything to do with Dealer’s success), net state job growth for the past decade has been at zero percent. The biggest growth sectors have been in government and health care, both of which are either partially or entirely funded by taxes culled from the diminishing private sector in Vermont.  In fact, at the Vermont Economic Outlook Conference held last week, their data seems to run counter to Shumlin’s overuse of “rosy” as a color selection from his palette, regarding our economic outlook:

“Vermont’s biggest problem is and will remain weak population growth,” said Gus Faucher, vice president of PNC Financial Service Group.  “Any growth taking place is among retirees, not skilled, working age people.  Vermont needs to turn the situation around, otherwise it’s looking at long-term stagnant economic growth.”

David Coates, who served on the Commission on the Design and Funding of Retirement and Retiree Health Benefits Plans for State Employees and Teachers sounded an alarm about the financial health of state government. 

Coates said unfunded health care benefits for retirees are threatening existing pension plans, jeopardizing the state’s credit rating and hobbling efforts to fund other programs. 

Vermont's budget, 6 months in.  Not pictured:  Shumlin taking responsibility for it.

Vermont’s budget, 6 months in. Not pictured: Shumlin taking responsibility for it.

Note that Shumlin omits the state’s perennially lousy business and tax burden rankings, because we can’t have reality spill over into a political speech. Unless it’s the reality of heroin in Vermont, which is always a useful fig leaf to cover the gaping void that is the political courage found completely lacking in Shumlin. A Shumlin who continually ignores the massive unfunded liability that the state and its taxpayers and businesses have zero capacity to fund, even if they wanted to.  Yet Shumlin still manages to congratulate himself by tossing a few million around at a few critical constituencies, in a budget with a miraculously-disappearing $70MM deficit, all in order to provide political cover for a governor whose own self-created reality is going to, guaranteed, give him a very rough ride when his whimsical budget fails to conform to the reality that the rest of us in Vermont live in.

This budget is created to give Shumlin political cover.  It is not intended to change the status quo, to alter the negative economic trends that still dominate the economic outlook for Vermonters, nor are we ever going to see anything like that from this politician.  The best we can do is do what Vermonters can and always have done – endure.  Endure it until we find enough willpower to undo what decades of progressive ideas have created.

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