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.

The Greek slave Pedagogue

Grammar Note: On Vermont Public Radio Friday, Sen. Phil Scott, a Republican from Montpelier and an aspirant to the lieutenant governorship, described something as “a phenomena.”

Scott was thereby guilty of what might be called the criterion phenomenon, the inexplicable compulsion to call a single phenomenon or criterion two of them.

But let us not confine our pedagogic purity to the politicians. To the contrary, we will also meticulously monitor members of the media (as we assiduously arrange the alliteration). A few hours earlier, VPR’s Mitch Wertlieb, helping the quarterly and loathsome fundraising drive had imagined “$5,000 laying on the ground.”

Possible, had the $5,000 undergone metamorphosis into human form and commenced placing objects upon the earth. Or alternatively, transformed itself into two human beings, and….oh, no. This is a family web site.

More likely the five grand was (at least in the Wertliebian imagination) lying on the ground.

If it’s any comfort to either man, on the radio the next day, Steven Chu, the secretary of Energy and, more pertinently in this case, a Nobel prize winner, talked of a competition “between (his younger brother) and I.”

This is the “between I” problem, the origin of which could be similar to that of the criterion phenomenon For decades, teachers scolded kids who said “Johnny and me are going to town,” or some variant thereof, convincing millions that it is always correct to say “(whoever) and I” even when “me” is right and “I” is wrong.

(Anyone who at this point actually said to him/her self, “no, ‘I am wrong,’” should be thoroughly ashamed, if not summarily executed.)

Political Note: Back in October, the News Guy, putting on his political prognosticator hat, suggested that State Sen. Doug Racine of Richmond had emerged, however tentatively, as the front-runner among the five Democrats running for their party’s nomination for governor.

Very tentatively indeed, as it turns out. Looking at the field today, it looks as though Senate President Peter Shumlin of Putney has become the first among equals.

Considering that the primary is at least 28 weeks away (the date may yet be changed), that no one seems to have taken an actual poll, and that most people who will vote in the primary are so far paying scant attention to the campaign, Shumlin’s hold on this position is just as tentative as Racine’s was.

Besides, in a way it was no fair. Shumlin had outside help. From the Vermont Yankee nuclear power plant.

It’s not likely that Vermont Yankee or its owner, the Entergy company of Louisiana, planned things that that way. Shumlin has been one of the plant’s persistent critics, meaning the best thing it could do for him was to do just about everything wrong, calling attention to the plant’s possible safety problems and its management’s competence and dependability, or lack thereof.

Precisely what it has done in the last several weeks, almost as if the Shumlin campaign had been secretly orchestrating Entergy’s actions, or (for those who believe in such) put a hex on the company.

But Shumlin didn’t just sit there as this gift was proffered to him. He knew what to do with it. No smug I-told-you-so wise cracks. No (apparent) gloating. He’s been calm, forceful, consistent in the way he’s handled himself behind the various podiums from which he’s addressed the issue.

Of course all the candidates have been standing behind podiums. But thanks to the Vermont Yankee tritium leaks and misstatements, there have been lots of television cameras and reporters in front of those podiums while Shumlin spoke. It’s been hard for the other Democrats to get much ink or air time of late.

Speaking of which, has anybody noticed that Lt.Gov. Brian Dubie, who faces no primary for the Republican nomination, has gotten a bit of air time because Gov. Jim Douglas keeps inviting him to every podium to face the cameras even though there is no point at all to Dubie’s presence?

Well, not counting to have him face the cameras.

Since Dubie has said nothing newsworthy, he hasn’t gotten much attention. Still, he’s been pictured up there next to the other officials who actually have power to make policy decisions.

Not Dubie’s fault. The lieutenant governor just doesn’t have much in the way of power to make policy decisions.

Tax Note: Well, on the very morning of the News Guy’s last post (scroll down), the one pointing out that there was no actual evidence that Vermont’s relatively progressive income tax structure has produced a measurable exodus of wealthy folks, the Burlington Free Press’s lead story in the local section bore the headline “Tax Migration Feared.”

What? Had somebody come up with actual evidence that your humble agent had somehow missed?

In a word, no. A tax accountant said some of his clients had asked him about the tax benefits of moving elsewhere. This is actual evidence of nothing. The closest thing to evidence that the Senate Economic Development Committee heard at a Burlington session was the claim of real estate developer Ernie Pomerleau that he has no plans to move out, but knows three dozen people who have.

A nice, round figure, three dozen. Nobody seems to have asked Pomerleau for their names. But let’s stipulate that Pomerleau is an honorable fellow and has actually talked to 36 wealthy Vermonters thinking about blowing the pop stand because of last year’s repeal of the state tax preference on capital gains.

But just where will they go? Only eighteen other states (according to the Legislature’s Joint Fiscal Office) offer tax breaks on capital gains, and most of them apply only to some gains. The only states that had the kind of broad preference Vermont just repealed are Arkansas, North Dakota, South Carolina, and Wisconsin.

Somehow, a mass exodus of wealthy Vermonters to North Dakota does not seem likely.

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As everybody knows, Vermont has a bad business climate.

Everybody knows it because everybody’s been told it early and often. Politicians, led by none other than Gov. Jim Douglas, regularly bemoan the hostility visited upon businesspersons and entrepreneurs. The business leaders themselves rarely miss a chance to proclaim that were only Vermont’s regulations weaker and its taxes lower, especially on the wealthy (meaning, often, them) they would employ far more workers. Even more rarely do most newspapers and TV stations fail to report those contentions, or to cite “studies” asserting that Vermont’s economy is stifled – if not strangled – by state policies.

It’s almost unanimous.

Oh, except for the actual data.

They (the data) say Vermont is one of the more affluent states, with an economy that grows (and, these days, shrinks) roughly in concert with the rest of the country and/or the region. They say that the state’s economy has its problems, but so do all the others states, and raise the question of why, if Vermont’s business climate is so bad, business in Vermont (until the Recession) isn’t.

Now comes a new report indicating that the business climate couldn’t be that bad because (again until the Recession) Vermont’s economy was quite healthy, another way of saying that business was good.

Better, according to several measurements, than in most other states, including those where taxes are lower and regulations looser.

For instance, according to the report, The Vermont Job Gap Study, Phase 10, Part 1, from 1998 to 2007 Vermont’s rate of job growth was the highest in New England, the 17^th highest in the country, and higher than five of the nine states which have no personal income tax, including neighboring New Hampshire.

During those same years, the study shows, the per capita Gross State Product, grew (in inflation adjusted terms) faster in Vermont than in 45 other states.

“If Vermont was ‘anti-business,’” the report said, “we would not see this result.”

Not that everything is economic peaches-and-cream here, the study acknowledges. Vermont lost manufacturing jobs during those years. But so did 43 other states, 35 of them at a faster rate.

For at least two reasons, this study should be viewed with some skepticism. The first reason is that all studies should be so viewed, in accordance with The General Law of Studies: Every study reaches the conclusion its studier wished to conclude before he/she obtained his/her first datum.

The second reason has to do with its pedigree. The study was written by Doug Hoffer, the Burlington-based policy analyst whose politics are decidedly left of center, on behalf of the Peace and Justice Center, whose politics might be to the left of Hoffer.

In addition, Hoffer used economic statistics from something known as the National Establishment Time Series, not from the standard U.S. Government sources, the Census Bureau or the Bureau of Labor Statistics.

But it isn’t as though the NETS is some kind of Marxist cabal. It’s associated with the Dun & Bradstreet financial services empire, putting it smack dab in the Wall Street mainstream. Firms that subscribe to it base some of their business decisions on its information.

Hoffer said the NETS statistics are better for assessing a state’s economy. Their samples are much larger, he said. In addition, BLS employment figurers are based on payroll surveys, which omit many single practitioners, who are quite common in Vermont.

(For instance, the News Guy probably would not be considered an employed person by the BLS, but might be by NETS. Which appraisal is more accurate will be left to others).

There is no indication that Hoffer cherry-picked either his numbers or the dates he used to make Vermont look better. Not much happened in Vermont between 1998 and 2007 that did not happen in the rest of the country. And his findings are consistent with those of other studies, including (see below) some undertaken by those on the other side of the political spectrum.

So the data – the actual, empirically testable evidence – leads to the conclusion that a business can thrive and prosper in Vermont about as well as in most other states. This is not to say that there are no problems facing businesses in the state, some of them worse here than elsewhere. For many firms, Vermont is far from raw materials and big markets. Some companies have trouble finding enough qualified workers. The state is small, rural, and atypical, all in an economic climate that confers advantages on metropolitan areas, dense population centers, and standardization.

But what about the argument from politicians and some business leaders that Vermont does have a poor business climate? It has to be based on something.

It is. But it is not based on data. Take a look at the presentations made last year to the Blue Ribbon Tax Structure Commission by the Lake Champlain Regional Chamber of Commerce and the Greater Burlington Industrial Corporation.

They are not insubstantial. They are full of facts, suggestions, anecdotes, proposals, and assessments, some of which are undeniably correct and some of which are debatable. But they make no statistical case that Vermont’s economy is weaker than any other state’s.

Then there are several business-sponsored studies reporting that many business executives in the state (and a few outside it) find Vermont “unfriendly” to business. But with one exception, these are not based on data either, but on the impressions of the business executives surveyed.

Some of their specific complaints are no doubt legitimate. But any survey of business people, or lawyers, or teachers, or (let’s not omit) journalists is going to elicit complaints, because (a) ours is a culture of victimization whose real motto is “woe is me and mine;” (b) under the “squeaky wheel gets the grease” rule, they’d be fools not to complain.

Besides, some of these surveys are weird. Take the one by the very conservative American Legislative Exchange Council which put Vermont next-to-last for pro-business policies between 1997 and 2007 (similar to Hoffer’s time period). But in those years, the study had to concede, personal income per capita grew by 61.2 percent in Vermont, the seventh highest in the country.

Most residents of most states would love to have such a poor business climate.

In fairness, many Vermont business leaders do not complain about state policy. Among the business organizations here is the liberal Vermont Businesses for Social Responsibility. Not every business leader always agrees with the lobbyists from the Chamber, the Business Roundtable, and the GBIC. Nor do those organizations contend that the state’s business climate is all that terrible.

“This can become a sort of self-fulfilling prophecy,” said Tom Torti, head of the Lake Champlain Regional Chamber. “You play with fire when you say things are always bad.”

And Seth Bowden, the Director of Business Development for the GBIC, said his organization is “not trying to make a case that we have a bad business environment. Every state has got its pluses and minuses.” Bowden even said Vermont may have been wise in “trying to control growth in particular ways,” though he added that “sometimes that doesn’t work out for some of the businesses.”

It isn’t that neither man had complaints about the state’s economic policy. Not surprisingly, those complaints had to do with taxes, and here the business community is not entirely without statistical evidence. Though even the Tax Foundation has given up arguing that Vermonters shoulder the highest state and local tax burden in the country, there is no doubt that taxes here are higher and more progressive than in most other states.

There is substantial doubt, though, that the current tax structure is bad for business, especially when there is so much evidence that business isn’t bad, or wasn’t before the Recession, and is still not as bad as in many other states.

The tax angle, however, deserves a separate discussion. Tune in Friday.