January 25, 2011

Vermont Tiger: We Cut Spending Already ... Didn't We?

Well worth a read for anyone following the budget crunch in Vermont state government.

Mr. Pelham's writing has appeared in many places recently. I have excerpted the essential elements. How can we trust our Legislature when its leaders tell us they have cut spending when if fact they have not as Mr. Pelham reports? And he reports from a position of authority in the previous Administration.


by Tom Pelham (Tom Pelham was the Commissioner of Finance for Howard Dean and Tax Commissioner and Deputy Secretary of Administration for Jim Douglas)
"It’s common knowledge that state budgets have been cut during the current recession, including deep cuts in human services. But is it true? Let's look at the record ... and this chart.

The truth is that the total state budget grew robustly during this recession. From fiscal 2008 through fiscal 2011 the state budget increased by $658.9 million, or 4.62% per year while the Agency of Human Services budget increased by $336.3 million or 6.53% per year. Much of this increase was fueled by ARRA funds which supplanted recession depleted general funds. General funds are broad based state taxes including income, sales, meals and rooms, and corporate. ARRA funds are temporary federal stimulus dollars granted to states to soften the recession, but will end after fiscal 2011.

Yet legislators, news reporters, editors, advocates, and bloggers routinely reference state budget cuts as fact. In a January 15 article, the Burlington Free Press quotes Martha Heath, House Appropriations Chair, as saying “Because this is our third or fourth year in a row making budget cuts, it just gets more and more difficult to find a way to cut the budget that won’t be painful to people….”. Whether to cut the budget or raise taxes is certainly debatable, but providing the public with factual reference points as to whether the budget has already been cut is fundamental to an informed debate. In this regard, the media has failed the public..."
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