In January, at the start of the 2009 legislative session, there was talk of weathering the recession by reviving Republican Gov. Dick Snelling’s income-tax surcharge .
In the early 1990s, Snelling levied a multiyear surcharge on upper-income earners as a way to close dramatic budget gaps. Eventually, those tax rates were lowered (though a corresponding sales tax increase never was). For their part, legislative Dems went along with budget cuts and a small number of state layoffs.
In response to today’s crisis, Republican Gov. Jim Douglas  and lawmakers plan to cut services and jobs — up to 10 percent of the state’s workforce — and boost taxes that will disproportionately hurt the poor. Slashing the education fund, which Douglas also advocates, would likely result in higher local property taxes.
Where’s a Republican Robin Hood when you need one?
Democrat lawmakers have proposed raising regressive taxes on booze, tobacco and satellite TV to close the budget gap. But even the gas tax will hit low- and moderate-income Vermonters harder than the wealthy, if you consider it as a percentage of their wages.
Sure, the same group favors closing the capital-gains tax loophole. But rather than redistribute an estimated $35 million of wealth earned from stock investments into protecting public services, they want to lower income-tax rates — making the whole initiative revenue neutral.
Who benefits in that scenario? The wealthy. Why? Ask a minimum-wage worker the name of his or her accountant.
There’s always the safety net, right?
A proposal floated by the Douglas administration in the waning days of the session suggests it, too, is starting to fray.
Lawmakers heard last week about plans by the Agency of Human Services to outsource the delivery of emergency housing assistance funds to private community groups.
In all, 5.9 million state and federal dollars are at stake, most of which are used to help people find crisis housing. Funds can also be used to pay for a doctor’s visit, burial costs and utility bills. This money is currently doled out to individuals and community groups — such as COTS — by the Economic Services Division of the Department of Children and Families .
Congress set aside $1.7 million in stimulus money for each of the next two years to help provide crisis housing in Vermont, said DCF Commissioner Steve Dale. However, the money cannot be administered by the state. Rather than letting the state handle the Vermont funds and private groups handle the federal ones, the decision was made to pool the money and farm out the whole program. “Private groups” run the gamut, from community-action agencies to churches.
Advocates oppose the move. They believe the state should not privatize the public safety net. Once the federal stimulus money goes away, they argue, it could mean drastic cuts in services. Local communities likely couldn’t pick up the slack.
Well, we could always go back to electing Overseers of the Poor, right?
“In a time when so many families are being impacted by the economy, it’s no time to be experimenting on the poor,” said Christopher Curtis, an attorney with Vermont Legal Aid .
Some lawmakers agree with Curtis, including House Human Services Committee Chairwoman Ann Pugh (D-South Burlington). Pugh contends this isn’t a time to tinker with the delivery of key crisis programs. Legislators are likely to give the state flexibility to pass along the federal money, but not to let state dollars go along with it, she said.
The Douglas team must know something lawmakers don’t, because they published a legal notice Friday in several daily newspapers seeking bids on how to spend the combined pot of money.
When the Cat’s Away — More policy changes may be on the way once the legislature leaves town this week. That’s why Rep. Paul Poirier (D-Barre City) is pushing a bill requiring the legislature to reconvene if additional cost-cutting measures — that account for more than 3 percent of the budget — are in the offing.
How it works now is, the legislative Joint Fiscal Committee  (lawmakers from key money committees) makes cuts in conjunction with the administration during the off season. Advocates fear backroom deals, without adequate vetting by lawmakers, could eviscerate more safety-net programs.
Senate President Pro Tem Peter Shumlin  (D-Windham) said the state’s rainy-day funds should be used to plug any future revenue gaps, taking some of the pressure off Joint Fiscal to make difficult cuts. Economists are expected to downgrade the state’s revenue forecast again in July.
“The rainy day funds could absorb those losses,” said Shumlin.
Auditor Tom Salmon Jr. continues to push top lawmakers to hold a special session in September to deal with the financial crisis: “How we got into this mess and how we get out of it.”
Get out. Right now, that’s exactly what lawmakers are trying to do.
Union Blues — By the time this issue hits the streets, it’s possible that House Speaker Shap Smith , Shumlin and Gov. Douglas will have agreed to a joint budget compromise that allows lawmakers to wrap up on Friday.
Still up in the air is just how to trim labor costs to the tune of $14 to $17 million; Douglas intends to lay off as many as 320 state workers on top of the 60 he’s already axed, and the 300 or so vacant positions eliminated from the payroll.
The union and the Douglas administration are at an impasse in concession talks, and the Vermont State Employees Association  has formally asked for a mediator to intervene. That mediation session wouldn’t happen until sometime in June, however — just as most pink-slipped workers are heading out the door.
This week, roughly 115 of the 320 endangered workers are receiving lay-off notices, according to the union. Morale is pretty low, according to the numerous state government employees calling and emailing “Fair Game.” Ironicaly, this week is “Public Service Recognition Week.” That means Douglas is stopping at several workplaces to hand out plaques with one hand and pink slips with the other, joked one state worker. Douglas was at the Department of Health Tuesday, where a total of 19 public health nurses are getting the axe. Good thing that pandemic flu outbreak never materialized, eh?
According to state workers, nurses also are being asked to shoulder more clerical work — one day a month to start.
At least Vermont has its priorities straight: paperwork over pandemic.
Take the Money and Run — Flush with the power of electing one of their own as city council president, Burlington Democrats  are flexing their muscle.
The seven council Dems agreed to pool their resources and hire an attorney to help them vet resolutions and proposals that come before the council. For a fee of $10,000, the Montpelier firm of Tarrant, Marks and Gilles has been placed on retainer.
It’s not unusual for councilors from the same party to pool their money and hire a person to help craft resolutions and conduct research.
The sticking point is how the Dems took this particular matter into their own hands.
Until this year, councilors have had $1800 a year to spend on staff support. After a council retreat, councilors of all political stripes agreed they wanted to be able to hire someone to help them better evaluate Mayor Bob Kiss ’ proposed budget.
So, they struck a deal with the Kiss administration and Burlington’s Chief Administrative Officer Jonathan Leopold to increase their staff support budget by $1500 apiece. With 14 councilors, that amounts to an additional $21,000.
The council passed a resolution outlining the bidding process back in November, in hopes of issuing a request for proposals by late January. That RFP did not get issued until April.
So the seven Democrats decided to take their portion of the $21,000 — exactly half — and put a lawyer on retainer. This is in addition to what they already pay Judy Stephany, a former rep, to help with research.
The Dems announced the hire in a nondescript March 30 email to the media. But they failed to alert their fellow councilors.
“How else can you get the word out other than through the press?” asked City Council President Bill Keogh (D-Ward 5).
I dunno, Mr. President. A phone call. Maybe Tweet it?
Shortly after the press release went out, Leopold received an email from the Dems’ attorney requesting a $10,000 payment. The bill caught Leopold off guard, since it was the first he’d heard about the arrangement.
“It strikes me as ironic that in a press release talking about transparency, the Democrats never shared their decision with the rest of the city council,” Wright told his former colleagues at last week’s council meeting. “This hiring violates the spirit and intent of the resolution.”
The idea to hire an outside attorney came from Councilor Ed Adrian (D-Ward 1) — he’s a lawyer, too. He said if the budget analyst position was so near and dear to Wright and others, why didn’t they press the Kiss administration to issue the RFP sooner?
“Everyone would have liked the RFP to come out sooner, but the point is, if the Democrats wanted to change direction, then they should have been open about it,” said Wright.
Dems want to ensure the council fulfills its budget oversight function, said Adrian. Going out to bid in May to review a budget that must be approved in June doesn’t allow enough time for analysis.
City Councilor Sharon Bushor (I-Ward 1) told her Democratic colleagues their actions were less than forthright and violated basic council etiquette.
“While we need to be open and transparent with the public,” noted Bushor, “we also need to be open and transparent with each other.”
The extra allocation is not likely to be offered again in the FY 2010 budget, said Keogh. That’s fine by Wright.
“If you can’t play nicely in the sandbox with everybody,” said Wright, “the sandbox gets taken away.”
Signs of Health — More than 1000 people took part in a “Health Care for All”  rally last Friday in Montpelier.
The gathered masses heard from a number of speakers, including Burlington Mayor Bob Kiss, a Progressive, and U.S. Sen. Bernie Sanders  (I-VT). No legislative leaders were allowed to address the crowd.
Sanders called the fight for universal health care the “great civil-rights struggle of the moment.” Hmm. I thought it was marriage equality. Guess that’s passé in Vermont now.
Sanders hopes Vermont will be one of five states Congress permits to create a universal health-care system, and he’s introduced such a bill in the Senate.
Kiss delivered a letter signed by five of the state’s eight mayors asking Gov. Douglas and lawmakers to commit to creating a health-care system where “everyone is one” and “no one is out.”
Mayors from Barre, Burlington, Montpelier, St. Albans and Winooski signed onto the letter. They are all part of the informal ad hoc Vermont Mayors Group, which includes leaders from Newport, Rutland and Vergennes. The mayors from those cities didn’t sign onto the letter.
“Vermont should lead the way and establish health care for all as a public good and as a settled matter of public policy,” wrote the mayoral quintet. Noting the need for help from the feds, they added, “Let’s hammer out a model of universal health care in Montpelier for the rest of the country to follow. Let’s do it now.”
If Montpelier doesn’t take action, will the mayors? Stay tuned.
Can’t wait ’til Wednesday for the new column? Tune into WPTZ NewsChannel 5 on Tuesday nights during the 11 p.m. newscast for a preview of “Fair Game.”
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