August 18, 2006

Can We Afford Our Vermont Desires?

Much has been written and said recently about our needs in Vermont, particularly about our energy future, health care, education and the future of agriculture, among others. These mega- issues deserve serious public debate and close scrutiny as our Legislature grapples with the options and the advocates for one position or another jockey their philosophies into the public discourse.

Meanwhile, Governor Douglas and others correctly have begun beating the drum about affordability as Vermont's already sky-high tax burden threatens to escalate. In the face of stagnant population growth, relatively little creation of high paying jobs, and other cost of living increases, we must be wary of over-committing our resources or allowing costs of existing government programs to escalate

What's missing in most of what I see in the media and from the discussion generally is a willingness to realistically estimate and assess the costs of policy change. If we we don't know the likely costs for change or how we'll pay for them, how can we reasonably judge their worth? We must be wary of too many 'feel good' initiatives that may have dire economic consequences.

The cost of new programs or major changes in policy directions is given scant attention. Because we frequently ignore the costs in favor of the perceived benefits, we find ourselves in the undesirable position of scrambling to pay for our past decisions. One prime example is the escalating cost to educate our children in the face of declining enrollment. A similar fate may await the recent health care initiative depending on the implementation details.

I propose that all major programs or policy changes include a serious estimate of the per capita costs for Vermont at future milestones compared to some reference standard, say the average costs in the Northeast or in the U.S.

For example, if Vermont were to implement the dramatic renewable energy portfolio sponsored by VPIRG in their just released report, A decade of Change: A Vision for Vermont's Renewable Energy Future, what would be the costs per capita or per household compared to other regions or states 5 years and 10 years from now? Would it be the same, 10% less, 20% more. Of course, we must make some estimates of what others would do, but without some quantification of the costs of the future and the alternatives others may choose, we have economic information.

Unless we set some meaningful parameters in advance for the costs of our decisions at the time they become law or ensconced in regulations compared to other places and the present costs, how will we know if the decision is affordable?

I urge Legislators and other public policy makers to pursue quantitative measures of the costs of programs and initiatives compared to the status quo and to other locations. The Burlington Free Press would do well to ask the tough questions about future costs compared to other places to live. We may find that we cannot afford our 'needs' and continue to operate at an economic disadvantage. If we do, those who can afford to move away will; those who remain will be stuck with the bill.

No comments: