But first, some correction and amplification:

Until about 1:15 PM Friday, readers of Friday’s post may have understood that the State Senate was toying with the idea of diverting $6.89, otherwise known as six dollars and eighty-nine cents, from one fund to another.

Presumably most readers of this web site are alert, more alert in this case than is, at least sometimes, the writer of this web site, and understood that what the meant was $6.89 million.

But what’s few zeros among friends? And thanks to the readers who noted the omission.

Also, Sen. Ann Cummings is chair of the Senate Finance committee, not, as Friday’s post said (again, until corrected), the Appropriations Committee. Susan Bartlett is Appropes chair.

Something else was absent from Friday’s post because it was not clear on Thursday, at least not to the News Guy, and apparently not to many legislators. That $10 million to be raised by considering some capital assets – expensive houses, stocks and bonds, etc. – when applying the “income sensitivity” provision on the statewide school property tax is not slated to go into the Education Fund.

Instead, for the first time, money from the school property tax would go into the General Fund.

Like any policy change, this one might be defensible, or even wise. But it does stretch if not violate the understanding that the school property tax would be used to support the schools, not the rest of state government. It’s only $10 million, but when it comes to taxes, experience shows that the first exception is rarely the last.

Now, to today’s main order of business, also inspired by readers who have communicated by email, old-fashioned phone calls, and even older-fashioned personal conversations (you may remember them; the kind where the conversers are actually in the same place at the same time).

The question: why, right after the entire United State Government adopts a comprehensive change in the health care financing system, is the Vermont Legislature passing a bill to study comprehensive change in the state’s health care system?

Good question, because it can be answered with one word: politics.

That’s a description, not a condemnation. Politics, the method by which free people govern themselves, is not a pejorative. It’s a reality.

The political reality against which lawmakers have based their political decision to pass S.88 http://www.leg.state.vt.us/docs/2010/bills/Senate/S-088.pdf (in separate House and Senate versions that have yet to be resolved) is that Vermont is home to a politically significant  minority of voters who are convinced of the superiority of a ‘single-payer’ health care financing system—basically Medicare for everyone.

No, that was an understatement. These folks are not merely convinced of the superiority of a single payer system; they are committed to such a system with a fervor approaching that of a religious zealot’s  devotion to his faith, with comparable intolerance toward dissent.

This too is description not (except for the intolerance part) condemnation. Clearly, there is a case to be made for a single-payer system. It is how most civilized (prosperous, democratic) countries finance health care. In those countries, everyone is covered, they live longer, healthier lives than Americans, and it’s all done for a lot less money per person.

The focus here today. Though, is not on the policy, but on the politics, the first requirement of which is, in the words of  Richard J. Daley to “know how to count,” raising the question of how big is this constituency of single-payer enthusiasts.

Not very. Nobody has polled on the matter, but we are almost surely talking about less than 10 percent of the adult Vermont population, though probably more than five percent. For purposes of discussion, then, let’s say seven percent, or about 20,000 voters.

Ah, but it’s a strategically positioned seven percent. Just about every one of them identifies with either the Democratic or the Progressive Parties. Furthermore, just about every man (and woman)-jack of them will vote. Unless the Progressive Party puts up its own candidate for governor, most of them will vote in the Democratic primary in August. In what is likely to be a low-turnout election, this faction will make far more than seven percent. It could come close to a majority.

Obviously, then, two outcomes Democrats – and especially Democratic candidates for governor — want to avoid are: (1) Displeasing these primary voters and (2) Annoying the Progressives so much that they decide to find a gubernatorial candidate of their own, who would siphon off more votes from the Democratic contender than from Republican, Lt. Gov. Brian Dubie. Months ago the Progs declared that Democratic support for a single-payer health care system was among their sina qua nons for staying out of the race.

So it should be no surprise that Sen. Doug Racine, one of the five Democrats running for governor, introduced the bill to engage a consultant to study health care reform, with specific directions to look into the single-payer option. No surprise either that few Democrats opposed it.

There is no suggestion here of insincerity or cynicism on the part of Racine or the other Democrats. Racine has long been a single-payer proponent. He no doubt thinks it would benefit Vermont, and he could be right.

(Or not. If there is a strong case for the entire nation to adopt a single-payer system, there is an equally strong case for a single state to avoid it, for reasons to be discussed in another post soon).

Nor is the earnestness of other Democrats and Progressives in the Legislature open to doubt. Judging from a couple of overheard conversations outside the second floor cafeteria in the Statehouse the other day, some of them are so solemn and intense about the subject that they may have lost touch with reality.

But sincerity and political self-interest are not mutually exclusive, and there seems little doubt that whatever else they may be doing, the Democrats are pandering to one of their core constituencies. Absent that intense minority of single-payer enthusiasts, this bill might never have come before the Legislature.

Again, this is observation, not condemnation. All political factions pander to constituencies. Gov. Jim Douglas, for instance,, has of late been pandering to the home builders and the all-terrain vehicle riders. Politicians not only have to pander, but up to a point they should. It’s part of democracy.

The point at which they should not pander, of course, is reached when the interest of the pandered-to constituency is actually contrary to the public interest. But that does not seem to be the case here. The worst that can be said about this consultant study is that it will spend $250,000 that may not have to be spent. As unnecessary expenditure, this is small potatoes, and for a function likely to be more productive than the comparable expenditure on the pointless pornography-detecting software the Douglas Administration is in the process of installing on state computer systems.

Besides, the process might do some good. The consulting firm is likely to look at the possibility of replacing the fee-for-service method of paying doctors. Many health care economists consider fee-for-service second only to the high price of prescription drugs as an explanation for why health care is so much more expensive in the U.S. than elsewhere.

But the consultant report will not pave the way for Vermont to adopt a single-payer health care system. That’s because Vermont, on its own, is not going to adopt such a system, not now, and possibly not ever. Federal law forbids it until at least 2017, and while Congress could theoretically grant the state a waiver from the prohibition, the prudent Vermonter would be advised neither to hold his/her breath nor to bet next month’s mortgage payment on that outcome.

The real – if not, it should be stressed, the intended — purpose of this legislation is not to change Vermont’s health care system. It is to send a signal to a small but potent constituency. It seems to have worked.

The News Guy is going to (sort of) violate his usual policy today to (sort of) take a position on a bill before the Legislature.

As regular readers know, what the computer nerds call the default position of this site is to inform and to analyze, not to advocate or oppose. There is no shortage of advocates and opponents, hence no need to add to their number.

Besides, to the reporter, casting the same jaundiced eye on advocates and opponents is what comes naturally; joining either side does not.

Worse, in this case, the joining, however conditional, leaves the News Guy vulnerable to accusations of acting out of self-interest. The accusation would not entirely without foundation. The case about to be made here is being made out of the conviction that it is in the interest of the general public. But there is no doubt that it is in the interest of the news business and its practitioners, all of whom have a vested interest in public information being…well, public. That’s why some of them – including the publisher of the Rutland Herald and Barre/Montpelier Times Argus and the editorial page of the Burlington Free-Press — have come out in opposition to H 331, which is likely to get final approval from the Vermont House of Representatives Tuesday.

This post is going to stop just short of outright opposition. The bill, which would allow big-money contributions to the State College system and the University of Vermont to remain anonymous, is complex. It purports to have protections against the most likely abuses. Corporations would not be allowed make anonymous donations, not would individuals doing business with the colleges or UVM.

But just who would decide whether a donor was doing such business seems absent from the legislation, as does how and through what agency the donation would be either returned or revealed.

It is probably true that the colleges and UVM would raise a little less money if all donations of $10,000 or more were a matter of public record. Believe it or not, some folks don’t want their generosity known. A Free Press article last month quoted UVM spokesman Enrique Corredera explaining, “some do so out of humility. Some wish to avoid unwanted solicitation for donations. And, increasingly, donors wish to maintain anonymity to protect the privacy and personal safety of themselves and their families.”

Well, no doubt all that happens. But you know what else happens? A lot more than any of that other stuff?

People hide what they’re doing because they have something to hide. They keep their names from the public because they don’t want the public to know what they are doing. And they don’t want the public to know what they’re doing because they think the public will disapprove. The public might think that the big-money donors are being at least as selfish as generous; that they have an angle; that some of those gifts come with a price.

The public will so think because it is true, often enough if not usually. Any time rich and powerful people (although the rule may also apply to poor and weak people) are allowed to act in secret, some of them will act in their own interest, not the public’s.

Before the lawmakers vote Tuesday, they might take a look at the impacts of anonymous donations at the University of Oregon and the University of Louisville.

……..

The Oregon story is easily available at the News Guy’s occasional collaborator, the news web site VT digger, in a story by Donald M. Kreis about the new $200 million basketball arena and nearby 40,000-square-foot tutoring center for athletes on the campus in Eugene.

There’s no anonymity about the Knight Arena, named for Phil Knight, the head of the Nike shoe empire, and a big contributor to the university. But University officials are not revealing the cost of the other building, the Jaqua Academic Center for Student Athletes, or who is financing it.

“When donors call the shots…outside the normal requirements of public scrutiny, Kreis warned, athletic boosterism can too often become (a university’s) driving strategic priority.”
The University of Louisville is the alma mater of Sen. Mitch McConnell, the Kentucky Republican who is the Senate Minority Leader, and is now home to the McConnell Center for Political Leadership.

Among the Center’s contributors, whose names were kept secret at first, was at least one company that benefitted from “earmarks” McConnell shepherded through Congress, and others with close ties to the senator. As revealed by the web site of Citizens for Responsibility and Ethics in Washington, When the Louisville Courier-Journal sued to get the names of the donors, the Kentucky Supreme Court allowed the University to maintain the anonymity of those who had already contributed, but not of future donors, who, the court noted “may not simply wish to conceal their identities, but rather may wish to conceal the true purposes of their donation.”

Because the secrecy of corporate donations would not be protected by the Vermont bill, the situations are hardly identical. But that doesn’t mean there won’t be those who “wish to conceal the true purposes of their donation.”

It isn’t even necessary to do business with a university to corrupt it. Consider the possibility that the wealthy head of a pharmaceutical or biomedical company makes a secret donation to UVM to finance a health research center. Having put up the money, he has some say in who runs and staffs the center. The director and the researchers will know who buttered their bread, even if the public does not.

What this health care mogul might have bought himself is a study that concludes that the new product his company is about to take to market is a safe and efficacious cure for fallen arches, lower back pain and unrequited love, when a panel of unbiased doctors might have found it as helpful as soda pop. Neither the donor nor his company would have done a shred of business with the University.

Whoever doubts such a thing can happen is invited to Google “medical research fraud,” and prepare for several hours of fascinating reading. And health research is one of the “spires of excellence” on which UVM is planning to concentrate as it rearranges itself for the future.

Members of the House ought take these dangers into consideration. And they ought not comfort themselves by the assurance nothing like that can happen here.

Absent public access and open records, it can happen anywhere

The most important things that happened on Town Meeting Day were the things that did not happen.

Actually, not much happened. With the exception of that vote about how Burlington votes (tune in Monday for an examination of the Burlington brouhahas), the voters of Vermont last week endorsed: (1) The status quo; (2) the love of money (part of the status quo); and (3) their public schools, even if those schools cost some of that money they love.

So Mayor Mary Hooper of Montpelier presided over an administration that got bilked out of 400 grand. She gets re-elected anyway. So Coventry Town Clerk Cynthia Diaz has been charged with income tax evasion. Leave that to the feds, said the voters of Coventry, re-electing Diaz by a 3-1 margin.

Roughly the same margin by which voters in neighboring Lowell endorsed a wind power project in their town, either because they are committed to renewable energy or because the wind company will lower their tax bills, or both.

But peanuts compared with the almost 5-1 margin by which voters in Island Pond approved of selling the state airport in town to make way for a pellet plant that could provide more than 30 jobs. Both the Lowell and the Island pond votes are advisory, and do not officially decide either issue.

But the main thing that did not happen was a “taxpayers revolt” against school spending. Au contraire, as they say just north of here, despite the Great Recession, despite objections from no less than Gov. Jim Douglas that the current school financing system was “broken” and “twisted,” despite the tax commissioner’s official advice to raise the property tax rate and warnings that more tax hikes are in store, the voters overwhelmingly supported the school budgets.

According to the Wednesday afternoon count by the Vermont Superintendents Association, 228 budgets were approved as submitted, four passed after reductions from the town meeting floor, three were  postponed, and only 14 were defeated.

It was the smallest number of rejections since 2004.

Furthermore, most of the approvals were by large margins, while several of the rejections were by razor-thin majorities.

Always beware of over-interpretation. The results do not mean that voters are indifferent to their tax bills, or to the cost of public education. One reason the budgets were approved was that they didn’t go up much, if at all. Though final figures are not in, Brad James, the Education Finance Manager for the Education Department said that, “as of 23-Feb, we had received 261 proposed budgets out of roughly 280.” Based on those districts, James said, “overall budget increase for the State was up (one half of one percent).”

Furthermore, said James (via email), “education spending, which is the lion’s share of the Education Fund and is the figure that drives tax rates for individual districts, is down (by one tenth of one percent).”

In other words, all those warnings from Douglas, Education Commissioner Armando Vilaseca, and others had an impact. So did the Recession. As a result, said John Nelson of the State School Boards Association, local boards made a major effort “to keep budgets in line.”

Board members knew that “people in their communities weren’t getting raises and were being laid off,” Nelson said, so understood that spending would have to be restrained “ if they were going to get support for budgets.”

But also beware under-interpretation. The budget votes prove that the current school finance system is not “broken.” It is not perfect. But no school finance system is, not in any state. Vermont’s present system – Act 60 of 1997 as amended by Act 68 in 2003 – works. The schools function. They are, according to the (possibly flawed) standards by which Americans judge their schools, rather good.

They are also rather expensive. But obviously they are not too expensive. According to whom? According to the people who pay for them. If those people thought the schools were too expensive, many more budgets would have been rejected.

In a sense, the effectiveness of the criticism from Douglas et al only prove that the system works. Those criticisms are part of the system. The complaints of politicians (including their hyperbole) are part of any school finance system. Rhetoric, however overblown, neither can nor should be eliminated from any public policy process.

Less certain, but potentially more significant is the possibility that this year’s hold-the-line school budgets signal the start of a long-term spending moderation resulting from declining enrollment.

For years, one theme of the school spending critics has been that costs kept going up, and the number of teachers and teachers aides kept rising, even as the number of pupils fell by more than 10 percent in the last decade or so.

On the surface, not an unreasonable objection. Below the surface, matters get more complicated. A kindergarten-through-sixth grade school with 100 students, evenly distributed among its seven grades, has about 14 kids per class. If a few years later it has only 90 students, still evenly distributed, it can’t get rid of a teacher by combining classes unless educators (and parents) are willing to accept 24-pupil classes, which most educators consider much too big, especially in the lower grades.

So cutting staff in response to falling enrollment – without sacrificing quality – takes time. As Jeff Francis of the Superintendent’s Association said, “you don’t ever decrease capacity at the same rate that you increase it.”

But as enrollment continues to decline, more schools may be seeing an opportunity to reduce staff. There has been a small decline in the number of teachers over the last few years. A few very small schools have closed their doors entirely. There is more talk, encouraged by Commissioner Vilaseca,  of consolidation of schools, districts, and supervisory unions, highlighted on Town Meeting Day by the decision to merge four Addison County districts into one.

All small steps, and perhaps reversible. Brad James at the Education Department said he thought the poor economy “moved ahead the time when some boards planned on reducing staff due to declining enrollments,” while acknowledging that this was “merely a supposition.”

But John Nelson of the School Boards Association said he thought the falling school population was “beginning to kick in,” and that this year’s budget “reflected that there is a response from the school boards.”

Even the teachers union – the Vermont-NEA – acknowledged that there might be fewer teachers in the state’s schools a few years from now. Darren Allen, the union’s spokesman, said that while obviously the NEA did not want to lose members, “if there aren’t the kids to teach, then there aren’t the kids to teach.”

It would take at least another year or two of little or no school spending increases to determine whether this year’s moderation was a fluke,\ or the start of a long-term trend. But if it is not a fluke, it is a political tectonic plate shift. Public schools are the state’s biggest expense. The steady increase in school spending has been a contentious issue both in the Legislature and for local school boards. If that increase really abates as long as school enrollment drops (which won’t be forever), pressure on officials and policy-makers would substantially ease.

Not that schools won’t continue to be a political issue. They will still spend a lot of money. Some of the cuts the boards have made arguably lower the quality of education, so when the economy improves, educators may well seek more funds, perhaps arousing opposition. And some Vermonters don’t like Act 60 because it does what it was designed to do – make school taxes and (to a lesser extent) school spending, more equitable among richer and poorer districts.

For at least another year, though, the politicians who try to argue that Vermont’s public education sky is falling don’t have much of an argument. This week, the sky stayed right up there where it belongs.