Legislative Update

Rep. Anne Donahue

May 12, 2008

Now that the dust has begun to settle, you may have heard that there are already warning signals that next year’s budget is going to be even tougher than this year’s. We tightened our belts this year, but the economy won’t pick up all that quickly, so there will be more of a squeeze.

Well, yes.

But it isn’t all about the country’s economic downturn. The legislature has planned it that way: put off today what we can’t afford tomorrow either, and hope for the best.

We borrowed from Peter to pay Paul. Peter will be looking for a refund next year, but we’ll still have Paul to pay as well.

When revenue projections dropped in April, there was suddenly a $24.5 million shortfall that had to be addressed. That came on top of a budget that was already based on an assumed drop in revenue growth, and that already had fictional money plugging some holes.

The biggest chunks used to fill the new hole were fictional “revenues.” It’s money that will not be around next year, so we will start next year still carrying this year’s hole, along with its own new gaps from stagnated revenues.

If this year’s budget was $100, but income was only $90, and instead of cutting the budget by $10 we made up the difference with a counterfeit $10 bill, then next year, to meet the same $100 budget, we would need $20.

That’s why as of April, 2008, as we voted on the 2009 budget, our Joint Fiscal Office had already projected next year’s deficit at $44.85 million – and that’s still assuming some increased revenues to look forward to for the 2010 budget.

How was the sleight of hand accomplished? It’s called “one time money” (the lucky dollar you won’t find on the street again next year) combined with internal budget loans (borrowing from your little sister, knowing she’ll get Mom to make you pay her back.)

Neither of these are real money.

Some top items on the list?

First, 2008 was not the start of the souring economy, yet. We are expecting to end fiscal year 2007-08 with some extra money. Once we spend that $11.8 million, it won’t be back next year.

We also had some unexpected Medicaid savings through money budgeted but not spent in the 2008 budget.

Then there was a windfall – a $5,566,045 lawsuit settlement. That was put right into the budget hole as well. It funded our teacher’s retirement fund obligation and the 2.5 percent increases to higher education funding. That won’t be back next year.

Then we started the borrowing: $2.8 million from the petroleum clean-up emergency fund; $650,000 from the tobacco trust fund; $2 million from the restitution fund.

Then, there are the taxes that we “didn’t increase.” Fees aren’t taxes; they are payments you make to get a specific government service, such as the cost to the state of your car’s registration renewal.

So all of a sudden – in the week between the original budget and the new downgrade in revenue projections – we projected that these services are all going to cost more to provide.

This is not a tax, remember? It is just that it will now bring in $2.6 million extra to the state revenues when those services are provided.

We are also budgeting based on more than $2 million in unfilled job positions, which was added to the original budget cut of $7.8 million in personnel reductions through vacancies.

We have another $5.4 million covered “contingent upon” money we hope will be coming in under our federal agreement for matching Medicaid spending.

(That’s a special 5-year deal we have, as a whole, that expanded our flexibility in how we used federal Medicaid dollars – including enabling much of the Catamount Health funding -- that comes to an end in 2010. We have no plans in place to address what happens then, and there’s already a $57 million projected deficit from Catamount even if we get a continuation of the federal commitment. But that’s another discussion.)

There were a lot of other moving pieces (money being shuffled from place to place), but you get the idea.

The remaining actual cuts in spending were such nickel and dime items, their randomness became hard to justify. A “target” to reduce staff travel by almost $1 million? OK.

But we cut the small amount given to the Area Agencies on Aging by $100,000; we cut the transition support that helps severely disabled kids move into job placements when they graduate from high school to fund only 45 of them, knowing 60 will graduate this year.

This is not exactly what you would call long term planning. It’s called: “leave it to next year’s legislature to fix. We didn’t want to make the tough choices.” Neither tax increases nor big public service cuts sell well in an election year.

The “big bills” that come through in the final week of the legislature don’t come with line item options for us to vote on, either. It’s a yes or no vote on the whole package – and in fact, the packages often also come with bonuses slipped in that are part of the “all or nothing” bill.

Sometimes a separate bill is added in because it’s the only way to get it moved through the process when time is running short; sometimes when it is politically expedient; sometimes just as a bargaining tool; and sometimes, as a “backup placeholder” in case the original bill gets stalled. In theory, such bills must share a related topic.

In one case this year, the Senate attached a scrap metal bill to a House bill on drunken driving penalties. The bill batted back and forth a few times, but eventually the House caved in, because its bill was too important to lose out to scrap metal.

Earlier this year, my committee spent weeks carefully balancing the importance of protecting against lead paint poisoning versus private property rights, and the House passed a beefed-up bill that stopped short of a homeowner’s front door.

The Senate added combined the bill into the final week’s compromise affordable housing bill: certainly not a bill to vote against. But they added in the lead paint bill minus the exemption for private homes. Now if you disturb more than one square foot of painted surface in your pre-1978 home without following contractor-level “safe practices” requirements, you’re breaking the law.

Being against a bill and losing the vote is one thing. Being against it and being unable to vote against it unless you also vote against a good bill at the same time is a poor process. Being against it and not even knowing it’s hidden in a bill is worse yet.

Four days before the session ended, I was previewing a Transportation Committee bill on the floor that makes available an “enhanced driver’s license.” For $25 extra, it will meet the requirements so that you can cross the border to Canada without a passport – a very positive initiative.

I was disturbed to discover that it will carry a radio chip that can interface with Homeland Security. But what caught my eye shortly afterwards were the amendments to our existing organ donor law – you know, the signature line you can fill in on the back of your license.

Muddling into the organ donor registry was not a Transportation Committee function: it belonged within the expertise of my Human Services Committee.

The intended change was only to the format. The card is getting too crowded; the Department of Motor Vehicles wants to follow the practice of other states by filing a donor consent separately and indicating it on a license with a little heart insignia.

But when I investigated the part of the law that was being rescinded, I discovered that it was inadvertently rescinding the entire donor registry statute.

We delayed the “expedited process” used for most bills during the final week to give me a day to work with the Transportation Committee so that on the final reading of the bill Thursday, it was amended with proper redrafting.

On Friday, with the clock ticking down to the final hours, we received copies of the fee bill – the one with the $2.8 million in new taxes in it – delivered to our desks with no time to read it.

This final week routine of being expected to vote without reading major bills is sometimes reason enough to vote “no,” but I also continued to skim through while the roll call continued past my “D” last name.

At the back end of the fee bill, inserted because times was running out to finish the normal process, was the enhanced driver’s license bill. After all, it was “relevant” to the fee bill: there was a $25 fee involved.

To my horror, however, it was still in its original wording, because it had been attached to the fee bill as a “backup placeholder” before the separate bill was corrected on the floor on Thursday.

In three days time, we had repealed, then restored, then repealed again, Vermont’s organ donor program.

It was repaired yet again on Saturday by passing a “conference committee report” that said, in effect, “the language we passed on Thursday, not on Friday, is what we really meant.”

It was not a very glorious moment for our state legislature.

But then again, neither was the budget we passed.

Please feel free to contact me any time about the events of the past session or other ways I can be of help as your representative, at either 485-6431 or counterp@tds.net.