Hidden amidst the stilted language of government budget-cutters in Montpelier Tuesday, along with the moaning and groaning—some of it legitimate—from people who will suffer from those cuts was some real news. But you won’t see it in the morning papers or on the evening TV shows.

Here it is: This liberal state—sometimes called the most leftward in all the land—is governed by two center-right parties.

This isn’t necessarily undesirable; center-right policies have their claim to wisdom.

But it’s a surprise, considering Vermont’s reputation as a hotbed of liberalism, sometimes even “the Peoples Republic of Vermont,” in semi-jest from both left and right.

In a real “peoples republic” (which does not mean China) the government does not raise the price of college for middle-income students or reduce the quality of mental health services for the poor without at least looking into the possibility of selectively raising taxes or fees.

Again, there is no suggestion here that the budget cuts are bad policy. Many of them are quite reasonable, even for liberals. Taken as a whole, however, they are not liberal policy. Not even center-left policy.

Raising this interesting question: What happened to the institution that supposedly supports and pursues center-left policies? You may have heard of it, especially because its adherents hold four of the six statewide offices and dominate the Legislature. Not only that, but its presidential candidate whumped his opponent but good in Vermont just a few weeks ago.

Yup, it’s the Democratic Party. The party of FDR, HST, JFK, LBJ, and HHH. Not one of whom would have stood by and allowed cuts in legal assistance for the poor, or weaker enforcement of human rights violations, or spending less on services for sick children without saying—no, without proclaiming—‘Wait a minute! There must be some way we can find some money here’

That Democratic Party lives, just not here. We know that because just next door, in New York, Gov. David Patterson is an actual Democrat with budget problems as severe as Vermont’s, with a $15 billion deficit looming for next year. Like Vermont’s Republican Gov. Jim Douglas, Patterson has proposed severe budget cuts. But he would deal with more than 25 percent of his projected shortfall with $4 billion worth of tax and fee increases.

Whether Vermont should follow that course is a subject over which reasonable people may differ. But if any of those reasonable people were Democrats, you’d think that a few of them would be taking that side of the debate.

Debate, however, seems to be something Vermont Democrats avoid, even when most of the evidence is on their side, or would be if they had a side.

For instance, in explaining why no tax hikes should be considered, Neale F. Lunderville, Douglas’s Secretary of Administration, asserted that “economists widely agree that tax increase during challenging economic times serve only to slow recovery.”

Well, sort of. What economists more “widely agree” on is that while tax increases are the second worse thing to do in a downturn, they are not as bad as cutting the budget and laying people off .

Just as Vermont is doing, without a peep from a leading Democrat.

There are economists who disagree with the general consensus, and who think raising taxes is worse than cutting spending. They could be right. But they are not Democrats. They are the most conservative Republicans. Even the center-right economists tend to agree with Democrats on this matter.

Among Democrats, only former State Rep. Paul Cillo, now head of Public Assets Institute, the liberal think tank he started after he left the Legislature, has dared to suggest that the state consider selective tax increases on upper-income earners. So have two writers on the Progressive Party’s “Prog Blog,” Burlington Mayor Bib Kiss and public policy analyst Doug Hoffer. But they aren’t Democrats.

(Well, OK, Treasurer Jeb Spaulding has proposed higher fuel taxes to finance road and bridge repairs. But that’s more of a user fee than a tax).

It’s true that on social issues Vermont effectively has two center-left parties, with few leading Republicans spending much time worrying about abortions or embryonic stem cell research or trying to roll back the state’s Civil Unions law. But when it comes to the fundamentals of governing—the role of the state in guiding the economy and providing basic social services, Vermont’s leading Democrats have converted; they are now Republicans.

Perhaps they are just being prudent. Any suggestion of tax hikes is politically risky. But nobody has taken a poll to see whether most Vermonters would consider some selective revenue hikes or borrowing to soften the impact of budget cuts. They accepted that path when Republican Gov. Richard Snelling chose it in 1991.

Even with the political risk, the behavior of the state’s Democrats leaves us with this question: If the Democratic Party will not stand up for poor, sick children, what’s the point of having a Democratic Party?—Jon Margolis

Most adroitly, Gov. Jim Douglas turned the screws on Vermont’s school boards—and on the voters who accept or reject school budgets—the other day.

“I think Vermonters have to ask themselves if it’s fair to have eight percent reductions in some critical state services when the caseload is increasing, while at the same time we’re going to have a 4.6 percent increase on average in local school spending at a time when we’re going to have 1,400 fewer kids to educate next year,” Douglas said. “We need to have an honest discussion about our priorities.”

An honest discussion he will lead? Perish the thought. “I don’t want to be that direct,” he said.

Or responsible, as it is sometimes known. But responsible and adroit are often not the same thing.

A really responsible governor who wanted his state’s schools to spend less would say something like, “and here’s what I propose to cut,” or perhaps “here is the process I am putting in place to decide what to cut,” or at least, “here is the commission I’m going to appoint to advise us on what to cut.”

But a politician who acts responsibly risks…well, being held responsible. Any specific plan to cut school spending would be opposed by one faction or another: Teachers, administrators, school board members, parents, ideologues of the left or right. Or maybe all of the above.

Governors don’t like to get those folks mad at them. Far better to say, “the schools ought to spend less,” and leave it to others to figure out how.

From a politicians’ perspective, this has two advantages: (1) If anything is done, the politician is less likely to get blamed than whoever actually came up with the unpopular (to some factions) specific proposal; (2) If nothing is done, the politician can claim he or she tried to get something done, but was thwarted by “special interests.”

But Douglas should not be condemned. First of all, most ofthe other 49 governors would do the same. Besides, Douglas is taking the lead in proposing those other budget cuts he talked about. On Monday, the governor and key legislators announced agreement on almost $20 million in cuts in mental health services, environmental programs, and college scholarships, not to mention shutting down rest areas on the Interstate highways. All of that will be unpopular.

But not comparable to the political peril of messing with the public schools. And anyway, the Democrats who dominate the legislature share whatever blame the Republican governor gets for these cuts in the state budget. They cover each other’s backside.

Or course, the other reason Douglas should not be condemned is that he might be right, On the face of it, he has a strong case. Thanks to the recession, the state has to cut programs that help an increasing number of low-income people while the schools teach fewer children every year. Why should the public schools keep spending more to teach fewer while other government agencies have to spend less to serve more?

John Nelson of the State School Boards Association says the comparison is invalid.

“It doesn’t quite work that way.” Nelson said. “You can lose ten or 11 kids, maybe spread out over five grades. Does that mean you’re going to be able to cut a teacher?”

Besides, Nelson said, schools and school financing run under “an entirely different process” than the ones that prevail in state government.

“By that I mean that the process of developing and approving school budgets happens locally on the part of people who are going to pay the bill.”

Well, yes and no. In many ways local control of public schools has been attenuated. State (and, increasingly, federal) requirements help determine what is taught, and effectively, if not officially, how it is taught. Teacher salaries are negotiated with a union organized on a statewide level.

Furthermore, the statewide property tax and its income sensitivity provision, which holds down most people’s property tax, mean that local taxpayers may not save all that much from a cut in the local school budget.

“Our tax burden is more driven by the statewide tax rate, so only a small portion is based on our local spending,” said Tax Commissioner Tom Pelham. “There’s no incentive to control cost.”

Nelson, not surprisingly, does not agree.

“I can’t see any evidence that people vote yes (on the school budget) even though they think it’s too much money because , ‘I have incomesensitivity so what do I care?’ I never heard anybody say that , or heard that board members argue that to their voters.”

Who’s right? Who knows? It’s all conjecture, and will remain so unless some economics graduate student tries to collect and analyze real data.

What is not conjecture is that most Vermonters think their schools are worth it. Last year only 12 of the 263 school districts voted down their budgets at town meeting, according to figures provided by Darren Allen of the teachers union. Sometimes voters forced school boards to cut programs. Sometimes they forced them to put back programs the board had proposed cutting.

It isn’t that Vermont schools aren’t expensive. By any objective standard, they are. Thanks simply to the lay of the land, they will probably continue to be expensive if they are going to continue to be good, which, by those same objective standards (test scores, for what they are worth, which is something) they also are.

That doesn’t mean there is no way to save money on the schools. But as John Nelson said, “ it’s not as though people aren’t looking for it.” Even a re-elected and politically adroit Jim Douglas could have trouble convincing Vermonters to slash their school budgets. Perhaps that explains why he doesn’t want to be “that direct.”—Jon Margolis

SCANDAL SWEEPS VERMONT

TOP OFFICIAL DEFIES THE LAW

SNEAKY POLITICS SUSPECTED

OK, so it’s hardly Blagojevichian in scope or power. But we do have, right here in squeaky-clean Vermont, a senior state official who has…well, broken the law

With malice aforethought? Well, with forethought,  meaning he knew what he was doing. The malice part is debatable.

So rare is such behavior here that our major metropolitan dailies seemed not to recognize it. They handled it as if it were a policy dispute.

It is, and one in which the alleged perpetrator could have the stronger argument. But it’s more than that. It’s a political ploy, and so far, it’s working.

The “crime” is part of an intertwined legal-political-fiscal muddle too convoluted to explain-or absorb-in one sitting. Today, let’s just deal with the basics and the politics. The policy and the money parts can wait.

The alleged perp is Tax Commissioner Tom Pelham, who has no known priors. As required by law, on December 1, pelham wrote to the leaders of the Legislature reporting on how much money public schools are likely to spend next year, and how much the statewide school property tax is expected to raise for the Education Fund. What he concluded was that “the Education Fund in fiscal 2010 at current tax rates will generate an operating surplus of $20.5 million.”

Translating into the English, this means the statewide property tax (along with money from other sources that goes into the Education Fund) is going to raise more than the schools are planning to spend.

In that case, according to law (Title 32, Chapter 135, Section 5402b), the Tax Commissioner “shall recommend…a reduction… in the statewide education tax rates.”

He didn’t.

“Given the extraordinary fiscal choices before us, a recommendation from me regarding 2010 tax rates may be extraneous or even harmful to the flexibility you and the Governor need to craft an overall fiscal course for the state,” Pelham explained in his letter.

And in an interview, he said, “it’s worth leaving the issue of the tax rate ambiguous because there is no certainty in these tumultuous fiscal waters.”

Could be. But put this in context. Pelham is the appointee and  ally of Gov. Jim Douglas, especially when it comes to cutting property taxes. And here he is refusing to recommend a cut in property taxes even where the law requires him to recommend a cut in property taxes.

Granted it’s only a recommendation. Pelham has no power to set the tax rate. But just imagine what Republicans would say if a Democrat passed up the chance to propose lower property taxes.

No, don’t bother. No need to imagine. Go back almost four years, to February, 2005. Then as now the Education Fund was projected to be in surplus for the coming year. Douglas wanted to cut the tax rate by more than enough to bring it into balance. The Democrats said no, inspiring then Republican State Chairman Jim Barnett to issue a statement accusing the Democrats of trying to “increase property taxes.”

So are Democrats now taking similar advantage of this inconsistency on the part of the Douglas Administration?

Apparently not.

“Because these are such difficult financial times, (Pelham) doesn’t want to make promises to the schools that he may not be able to keep,” said Senate Finance Committee Chairman Ann E. Cummings of Montpelier. Agreeing with Pelham that this is a “different year,” she declined to take political advantage of Pelham’s letter.

“We’re going to make an effort to do this in a bipartisan manner, which we can’t do if we start out throwing partisan darts at the governor,” she said.

We have here three possibilities: (1) Vermont Democrats (at least as compared to Vermont Republicans) are too responsible about governing to take cheap shots; (2) Vermont Democrats  (at least as compared to Vermont Republicans) are wimps with no taste for combat; (3) Both.

Just because the Democrats aren’t complaining doesn’t mean nobody is. In a joint statement, Vermont League of Cities and Towns and the School Boards Association called on Pelham to propose a tax rate based on the new numbers, a move they say could save taxpayers $18 million next year.

Without such a recommendation, said John Nelson of the School Boards Association, local school districts won’t be able to present their proposed tax rates to voters at least 30 days before town meeting day, as the law requires.

More strangeness. Just as Pelham could be expected to propose a low property tax rate, the school boards might like the increased revenue from the higher rate. So-you’d think-would the teachers union, the Vermont National education Association. But it attacked Pelham, too.

Less strange when we add a little more context, specifically that the Douglas Administration has some thoughts of filching from the Education Fund surplus to repair roads and bridges. Transportation Secretary David Dill came right out and said so.

That way the governor and his minions-with, quite possibly, the cooperation of the Democratic-controlled Legislature-can effectively raise taxes (certainly by Jim Bartlett’s definition), and still say to the voters, ‘What? Raise taxes? We din’t raise no stinkin’ taxes.’

If you think this is convoluted, you ain’t seen nothin’ yet. Because neither Douglas nor Pelham tried very hard last week to hide the rest of their political agenda here. They might not want to cut the school property tax rate just yet.  But they want to persuade, cajole, or embarrass the schools into spending less.

After all, they say, if just about every other government agency has to cut back, why shouldn’t the schools?

A valid question, though as with all comparisons, the appropriateness  of this one is open to debate.

To be explored on another occasion, “maybe not tomorrow,” in the immortal words of Richard Blaine, “but soon.”—Jon Margolis