Another year looms, and with it another session of the State Legislature. Because it’s another year of recession, it’s another year of not enough revenue to pay for all the scheduled spending, so it will be another year of debate over how much to cut, and where, and maybe the state should look for a little more revenue.

That’s “higher taxes” in English.

A year, in other words, rather like last year.

But remember what the guy said about how you can’t step into the same river twice (same river bed, maybe, but different water; the guy was Heraclitus [535-475 BCE]), and in all likelihood this year’s budget will not quite be déjà vu all over again. Expect a new factor.

It’s a likely flap over the Rainy Day Fund, the state’s savings account. Though there were rumblings from some liberals last year about possibly dipping into the savings, the proposals never rose above a whisper.

This year, the talk is likely to be louder. To begin with, the legislative leaders have – for now – ruled out new or higher taxes, eliminating – for now – the most obvious alternative to deep spending cuts.

That makes the Rainy Day Fund a more attractive alternative for those on the political left, who can be expected to push it harder.

Most likely to no avail, and not just because the spending cut advocates of Gov. Jim Douglas’s Administration are dead-set against using the Rainy Day money. So are the relevant committee chairs of the Legislature, even though they are Democrats and (by and large) liberals.

“I don’t think that’s prudent,” said Rep. Martha Heath of Westford, the chair of the House Appropriations Committee.

Neither does Rep. Michael Obuchowski of Bellows Falls, chairman of both the House ways and Means Committee and the Joint Fiscal Committee. Obuchowski said “Rainy Day” money was designed to be used for “unforeseen circumstances” that occur during a fiscal year after the budget has been adopted, not to make up for revenue shortfalls in preparing the annual budget

(Heath’s Senate counterpart, Sen. Ann Cummings, Democrat of Montpelier, took the same position, according to a story in the Barre-Montpellier Times-Argus last September)

“Rainy Day Fund” is something of a misnomer, actually, because there are three of them – one for the General Fund, another for the Education Fund, and still another for the Transportation Fund. They are, in a sense, the state’s forced savings accounts. By law, according to Maria Belliveau of the Legislature’s Joint Fiscal Office, five percent of the previous fiscal year’s appropriation for the General and Transportation Funds, and a slightly more complex formula for the Education Fund, is put aside in the Rainy Day Funds.

Sort of like a non-voluntary Christmas Club.

Together, the funds hold more than $100 million, a little more than the projected shortfall for Fiscal Year 2011, which starts July 1.

So, say some interested parties, why not use the money, or at least some of it? Isn’t that better than laying off another few score state workers, or cutting health care services for poor children, or not repairing potholes in the roads? Not to mention better than raising taxes. Other states have dipped into their versions of a Rainy Day Fund. Why shouldn’t Vermont?

That’s the message likely to be heard starting next month from some advocates of generous social service programs. For instance, the organization known as One Vermont, a coalition of health, education, and neighborhood groups and supporters, calls (on its web site) for a “balanced approach to addressing Vermont’s budget shortfall,” which would include “the use of new revenues, rainy day funds, federal funds, and possible debt.”

Using similar language, the liberal think tank Public Assets Institute calls for “the balanced approach—which includes restoring lost revenue and using rainy day funds in addition to cuts,” because it “recognizes that all Vermonters both use public services and pay taxes.”

One, though so far only one, of the five Democratic candidates for governor, State Sen. Doug Racine of Richmond, has also endorse the “balanced approach” concept, using both temporary tax increases and the Rainy Day money to avoid deep spending cuts.

That’s the argument, and on its face, it appears to have some merit. If this money is for a “Rainy Day,” today would seem to qualify. Fiscally speaking, the state, like the rest of the country, is suffering the heaviest downpour since the Great Deluge of the 1930s.

Furthermore, other states have dipped deeply into their comparable savings accounts (only Arkansas, Kansas, and Montana don’t have some version of a Rainy Day Fund). According to a report last summer by Stateline.org, at least “11 states committed upwards of $1.5 billion from their rainy day funds for the 2010 budget cycle,” and more were seriously considering it.

Many of those states are more conservative than Vermont, and some of them, such as Minnesota and North Carolina, virtually depleted their reserve funds to avoid deeper spending cuts or tax increases.

But Vermont seems unlikely to follow suit because of an apparent political irony: Vermont Democrats may be relatively liberal, but they are also Vermonters, as reluctant as their Republican predecessors to dip into capital or deplete their saving accounts.

Continuing with the irony, these liberals are like the conservatives of the past, but not like those of the present, at least on the national level, where most conservatives have embraced former Vice President Dick Cheney’s contention that “Reagan proved deficits don’t matter.”

During the decade now in its final two days, conservatives in Washington voted in deep tax cuts without corresponding spending cuts, and created, with the Medicare prescription drug bill, a totally unfunded new entitlement program.

Both Heath and Obuchowski said they would be willing to consider dipping into Rainy Day money if, after the Fiscal Year 2011 budget is adopted, the economy improved and revenues seemed likely to rise. In that case, they said, knowing the funds could be repaid quickly, Rainy Day funds could be used as what would effectively be an up-front loan to shore up important programs.

That happens anyway. The Rainy Day Funds don’t just sit there. Various state funds borrow from them to finance programs, then repay them as tax revenue comes in. Otherwise, state funds might have to borrow in the commercial market, and pay interest.

Obuchowski and Heath both expressed guarded optimism that the state might succeed in its effort to “do more with less,” as Obuchowski put it. The Legislature has granted a $200,000 contract to a Minnesota-based consulting firm for advice on how to scale down state government without reducing the quality of state services.

Obuchowski said that though Legislative leaders were very reluctant to increase taxes, they might be open to selective fee increases to increase revenue. Even then, though, he acknowledged, there would probably have to be “some reduction in services.”

And remember, on the assumption that almost nobody would read in anyway, there will be no post Friday. A happy, healthy, and prosperous 2010 to one and all.

Oh, dear. Yet another reason to worry about Vermont: It’s barely growing.

In the year ending last July 1, the state’s population had grown by a mere 711 people, according to the latest estimates from the Census Bureau. Worse (or so it seems), that meager growth came about only because births outnumbered deaths, not because people moved into the state. In fact, 554 more Vermonters moved out than newcomers moved in.

Come to think of it, the births didn’t outnumber the deaths by much. Compared to folks in most other states, Vermonters aren’t having many babies.

What are we doing wrong?

Well, to start with, maybe taking stories like this too seriously.

Or at least by taking them as entirely bad news. A stable population does present certain problems. But it also presents opportunities, a possibility unmentioned in the media coverage of the Census Bureau’s announcement last week.

No, there is no suggestion here that the journalists and/or their bosses were in any way unethical, lazy, or ignorant. To begin with, the reporters doing the stories may simply have been rushed; what with all the layoffs, there aren’t enough of them to do the job right. At worst, they followed the conventional – and somewhat provincial – wisdom: Bigger is better, meaning not getting bigger is worse; also whatever happens here doesn’t happen anywhere else, or if it does we don’t care.

Thus both the Burlington Free Press story by Matt Sutkoski and the Associated Press story that ran in the Barre-Montpelier Times-Argus noted that three states actually lost population last year, but mentioned only Vermont’s net domestic in-out-migration loss, either last year or over the course of the decade, as though it illustrated an unusual situation.

(Actually, over the decade, 3.877 more people moved into Vermont than out of it. It was just net domestic migration – people moving to and from another state – that fell, by 1,124. Immigrants from other countries made up the difference)

But the Census Bureau data show that more Americans moved out of than into 13 other states, including California, over the last decade, and 20 had more domestic out-migration than in-migration in the year ending July 1.

In fact, in many states, including such recently fast-growing places as Nevada and Florida, the total net out-migration – whether to another state or another country – was far greater than Vermont’s, even proportionately to their larger populations. What’s happening here does not appear to be all that unusual.

Nor baffling, By not growing in population, Vermont is very much ike the people and places with whom and with which it is comparable. Those people are American-born non-Hispanic whites, and there are not going to be more of them – anywhere –in the future than there are now.

According to another recently-released Census Bureau report, were it not for immigration (referring here only to immigration from other countries), the population of the United States would decline by 2050. Being far from the centers of immigration (mostly Latin America) and not too inviting to those immigrants (largely because of the weather) Vermont is likely to remain dominated by boring white Anglos, precisely the kind of folks who don’t do much reproducing.

Worse (from the perspective of those who think population growth is necessary), Vermont is disproportionately full of relatively affluent, relatively well-educated boring white Anglos. People like that aren’t reproducing enough to replace themselves all over the world. There’s little reason to suppose that the Vermonters among them are about to act much differently.

Meaning they might as well get used to living in a state with a stable population. It looks as though it’s here to stay.

As the conventional, established, reaction to the news indicated, a non-growing population raises some potential problems. At the Free Press, reporter Sutkoski quite sensibly contacted a conventional, established, business consultant, Richard Heaps of Northern Economic Consulting, Inc, who provided the conventional, established, analysis.

“Conventional, established,” here is description, not insult. Much of what Heaps said should not be dismissed. Slow population growth means slow growth in the labor force, he noted, which in turn “means it’s tougher to expand a business in Vermont than it would be otherwise,” so some businesses might expand elsewhere.

So they might. On the other hand, with a smaller labor force, a state wouldn’t need that many job openings to maintain full employment. A small, select, fully employed work force would seem to be the hallmark of a prosperous state, unless one assumes that bigger is always richer.

But were that the case, a big, heavy, bicycle would cost more than a very light one. It uses more material and probably requires more workers to build it. As everyone knows, though, the opposite is the case: the lightweight bike costs much more, its value enhanced by the intelligence that figured out how to make it so light.

What was missing from the coverage was some reaction from less conventional experts who might have pointed out the possible advantages of a stable population, or at least the reasons why it need not be inconsistent with greater prosperity. Because only a holiday and the weekend have passed since those stories appeared, no such expert will be quoted here, either. For future reference, though, one might try the folks at Worldwatch Institute, or economist Herman Daly. Their outlook need not be accepted as revealed truth; it might be part of the conversation.

Because the earth is finite. Human inventiveness can expand the limits imposed by that finitude, and it has. But it can only do so up to a point. The contention that the point is approaching or has been reached is not easily dismissed.

Meaning that the country, city, or state that can show the world how to get richer and happier without getting much more populous could get very rich indeed.

(NOTE: Yes, if you thought you remembered that last Monday’s post indicated that this one would deal with state tax matters, you remembered correctly. Come back Wednesday.

And to repeat: No post this Friday morning. Enjoy your hangovers.)

But first, two items of news, the first one related to Monday’s post (scroll down) about how Vermont’s budget woes are similar to almost every other state’s.

So, it turns out, are its Unemployment Insurance Fund woes, according to a story in yesterday’s Washington Post. The insurance programs in 39 other states are roughly as broke as the one here, largely because “state programs were on average funded at only one-third the level they should have been, according to generally accepted funding guidelines,” in the view of one expert.

As with the budget crunch, this news does not render Vermont’s problem inconsequential or let our policy-makers off the hook. It does seem to mean that they were no more irresponsible than their counterparts in most other states.

The second item is a study concluding that at least 3,000 Vermonters – and probably 6,000 – escaped poverty, and the poverty of some 37,000 others was diminished, thanks to the American Recovery and Reinvestment Act (ARRA).

Take that conclusion with a smidgen of salt. It comes from the Center on Budget and Policy Priorities, a liberal organization that wants to find good things to say about ARRA. But the Center has a reputation of playing it straight with numbers, and its methodology is there for all to see on its web site.

Now to the serious business of the day, which is only sort of a Vermont matter, but enough of one to justify examining it here, what with the prominent role played in recent days by former Gov. Howard Dean.

We’re talking health care, specifically the quarrel on the left side of the political spectrum over whether to support the much-compromised bill now (apparently) about to pass the U.S.Senate. It’s a worthy subject to discuss here because most Vermonters are at least mildly on that side of the spectrum. But they are not the only ones who might benefit from the conversation; there are lessons here for conservatives, too.

For those who have not been paying attention, Dean, the fiscally conservative governor of the nineties who has transformed himself into a lefter-than-thou agitator of the aughts, was for a while (he began to backtrack Sunday) a leader of the “bill-killer” faction on the left which judges the Senate bill worse than no change at all and urges its defeat, followed by the emergence of a better alternative next year.

As regular readers should know, it is the policy of this web site not to support or oppose legislation. From a liberal, a conservative, or any other perspective, good reasons to oppose any bill are easy to find.

But there are certain rules of political science and human behavior that should be taken into account. The first of these is that every public policy question should be answered through the prism of the Henny Youngman Hypothesis.

Derived from the Great Man’s second most famous line (after “Take my wife. Please!”), his response to the question, “How’s your wife?” The answer being, “compared to what?”

A good laugh in the nightclub, but perhaps a better lesson for the policy analyst. Because the way things actually work, at least in American government and politics, is that there are always two choices. In a free society, there can never be fewer than two. But in this free society, there are never more.

In every case, one choice is the status quo (the wife, in Youngmanian terms). The other choice is…the other choice. The “what” to which the status quo must be compared.

And what is that “what”?

Simple. It is whatever has emerged from the political/legislative/public relations process – the meat-grinder as some would put it – to challenge the status quo. That’s it. That’s the only other choice.

But wait a minute, comes the voice from Stage Left. What about a third choice? Where is the better “what,” the alternative to the status quo that would be even more different from the status quo than is this “what” that’s before us?

It does not exist. It never did. It never will.

The above is observation, not celebration. Now, and often in the past, advocates of greater change have complained that the “what,” the alternative that emerged from the meat-grinder, emerged thanks to chicanery, skullduggery, corruption, and decadence.

Could be. Doesn’t matter. What has emerged has emerged. What has not did not, and therefore does not exist. There are only two choices: the status quo, or the other thing.

That’s what James Madison and Thomas Jefferson knew in 1789 when many of their followers wanted to defeat the proposed new Constitution that had been sent to the states for ratification, and arrange for another convention, which would report out a better constitution.

No, said Madison (supported by Jefferson’s letters from Paris, which he wrote while pausing from his flirtations with a married woman), that’s not the way it works. The only choices are this proposed Constitution or the Articles of Confederation, which latter were not working very well. Let’s ratify this and then improve it, they said.

Which is what happened.

As to the opposite policy – waiting for a better “what” – that’s been tried, too, though not as successfully. In 1974, Sen. Edward Kennedy and top officials of President Richard Nixon’s Administration were close to agreement on a national health insurance system somewhat more sweeping than the one now before Congress.

Not good enough for liberals, led by officials of the AFL-CIO. They thought they’d get a better bill by waiting until after the 1974 elections gave them a “veto-proof” Congress. They’re still waiting.

(For details, check pages 217-219 of Edward M. Kennedy: A Biography, by Adam Clymer [William Morrow, 1999]. In a column in thedeailybeast.com Clymer convincingly argues that Kennedy would vote for this bill. The Senator’s widow, Reggie Kennedy, concurs in a column in Sunday’s Washington Post).

Yes, there can be a good reason to oppose the current health care bill: the conclusion that the system it would create is worse than the status quo. But that is a conclusion more easily reached by a conservative than by a liberal. According to most analyses (see, for example, this one) the major beneficiaries of the bill would be those in the low and lower-middle income brackets.

(And not the health insurance companies? Well, yeah, them, too.).

And remember, the sensible person will not casually dismiss the wisdom of Henny Youngman, not only in matters of political theory, but specifically on the subject of health care. Very few observations of the medical profession are more insightful than the account of the man who, when his psychiatrist told him he was crazy, insisted on a second opinion.

“Okay,” said the psychiatrist (according to Henny), “you’re ugly too.”