(Host) Governor Jim Douglas has proposed cuts in human service programs and a reduction of education spending as part of his overall effort to balance the state budget for next year.
Douglas outlined his priorities in his final State of the State address to lawmakers.
We have two reports this evening. VPR’s John Dillon will have reactions to the address. But first, VPR’s Bob Kinzel looks at the Governor’s proposals.
(Kinzel) Douglas told a joint meeting of the House and the Senate that drastic actions are needed because the state faces a projected $150 million gap in next year’s budget.
The governor says making significant cuts won’t be easy but he argues that reductions in spending are needed to balance the budget and put the state on a strong fiscal path in the future:
(Douglas) "The solutions required to close the gap will invariably draw objection and complaint. Although we will consider constructive alternatives, this is not the time nor the place for the reflexive defense of the status quo."
(Kinzel) Douglas didn’t unveil a lot of new initiatives – instead he relied on a number of plans that he’s proposed over his previous 7 years as governor.
Douglas wants to target two high spending areas for cuts – the first is human service programs:
(Douglas) "Service providers will be asked to find efficiencies. Some beneficiaries will have to accept reductions in order to preserve benefits for the most vulnerable. Still, some programs and grants will be significantly reduced or eliminated but we will lessen these impacts by redesigning how we deliver services."
(Kinzel) The second area is state spending on education. Douglas says that while Vermont’s student enrollment has declined by about 10% over the past decade, school staffing levels have increased 23%.
As more teachers begin to retire, he wants to replace only half of them – this would eliminate roughly 1,200 teachers over the next 4 years.
(Douglas) "In most organizations if your customer base is shrinking you make adjustments to stay within budget and at a minimum you stop hiring…until labor costs in our schools are brought under control taxpayers can expect our bills to grow every year and the onus of the property tax will continue to threaten a healthy economy."
(Kinzel) Douglas also took aim at the income sensitivity property tax subsidy program. This program allows many people to pay their education property taxes based on their income and not the value of their property. The governor says the program is too generous:
(Douglas) "Over time and over my objections the program was expanded to more and more people with higher and higher incomes. What started as assistance to the less fortunate has grow into an entitlement for over two thirds of taxpayers – some with incomes as high as $110 thousand dollars."
(Kinzel) Douglas says he also wants to change this policy because he believes that people who participate in the program are "disconnected" from the true impact of spending decisions at the local level.
For VPR News, I’m Bob Kinzel in Montpelier.