State budget surplus

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(Host) Who should get the credit for balancing the state’s 2003 budget, and having the year end with a small surplus? Commentator Allen Gilbert thinks it’s the state’s property tax payers.

(Gilbert) Recently we heard the good news that Vermont ended the 2003 fiscal year with a small surplus. Montpelier was pleased. Most other states faced big deficits. They’ve had to hike taxes or cut services just to balance their budgets. The administration secretary for Governor Jim Douglas told reporters that the credit for Vermont’s fiscal feat belongs to the Legislature, Governor Douglas, and former Governor Howard Dean.

But someone is missing from this list. It’s the people who did the real heavy lifting to keep the state in the black. It’s you, me, and everyone else who pays property taxes in Vermont. Thanks to us, the Legislature, the current governor, and the past governor were able to avoid tough spending cuts. They were able to say that big tax hikes weren’t needed to balance the budget.

But while congratulations are being offered, the state’s hands are digging just a bit deeper into our pockets. None dare call it “higher taxes,” but it is.

The state of Vermont balanced its budget by making property taxpayers pay more. And it did so without having to raise the statewide property tax rate a penny. The state simply watched while the values of our homes rose. Additional revenue poured into the Education Fund. When the time came to turn that revenue over to local schools to support school budgets voted on at town meeting, the state flicked a budget switch and channeled money to other programs.

Legislators and the governor said there was no need to fill up the Education Fund when it’s got such a huge surplus. We’ll just reduce how much we’re putting into the fund from other sources.

The Education Fund was raided for $9 million last year. It was targeted for another $23 million this year, but a shell game with revenues from the sales tax turned the raid into a financial siege.

Meanwhile, school board members were left standing on the firing line defending school tax increases. The extra property tax revenue coming into the Education Fund could have been used to help offset escalating health care costs or growing special education expenses. A simple adjustment of a number called the “yield” would have accomplished this. Our property tax bills would have been lower.

For voters to approve the taxes needed to meet school expenses, and then to have the state raid those funds, isn’t right. It hurts more when state officials take credit for having enough money to balance the budget – when the money wasn’t theirs to use.

And of course you won’t hear state officials thanking the Act 60 funding formula for helping them out. Act 60 ensured that adequate funds were on hand to accomplish this fiscal feat. The law has been a whipping boy since it was passed in 1997. Yet everyone is glad to have the money it’s producing to keep the state in the black.

So, I tip my hat to Act 60, and to Vermont’s property tax payers. Thanks for a balanced budget, and for the small surplus that the state treasury is showing.

This is Allen Gilbert.

Allen Gilbert of Worcester is a writer and parent who is active in education issues.

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