Gov. Jim Douglas does not deliver his annual budget address until Thursday afternoon, but behind the numbers ,his political strategy is already clear.

Call it the modified, limited Grover Norquist. Douglas is trying to “starve the beast.”

Norquist, one of Washington’s most influential (and contentious) conservative operatives, did not coin that phrase., or the policy it illustrates, which conservatives have followed since the Reagan Administration.  But Norquist, the head of Americans for Tax Reform, is the one who made it famous as short-hand for the strategy of cutting government spending by simply making sure the government has less money to spend.

In Norquist’s view, almost all of government is “the beast,” deserving starvation, or at least malnutrition, to the point where it can’t do much. Gov. Douglas, not nearly as far to the political right as Norquist, is being more selective. He’s just targeting one slice of government-elementary and secondary education. And he doesn’t really want to starve it; just put it on a strict diet.

That’s the strategy behind Douglas’s plan to spend $63 million less on schools in the next fiscal year. Or, to put it more precisely, to give the schools $63 million less in money that comes from statewide “broad-based” taxes-income and sales taxes and the like.

That’s the political-fiscal reality behind the government jargon of altering how much money is spent from which of the state’s various “funds,” as Douglas proposed the other day. Ignoring the official gobbledygook, the important distinction is that money in the “General Fund” comes mostly from the “broad-based” taxes while money in the “Education Fund” comes mostly from the statewide Education Property Tax.

But-and this is the important “but”-the Education Fund also gets an infusion every year from the General Fund-a projected $40 million next year specifically for the teachers retirement system, plus another $298 million. What Douglas wants to do is cut the second figure to $275 million and place the entire burden of contributing to the retirement plan onto the Education Fund.

The result: More school spending comes from the property tax, less from the more broadly based taxes. And more pressure on the schools to cut costs.

Schools would still be able to spend more, but they’d have to get all the extra money from local property taxes, with the approval of local property taxpayers.

Even without the current recession, that approval would be hard to get. Considering the unpopularity of property taxes, Douglas’s proposal almost makes it seem that he’s trying to instigate a taxpayers’ revolt against the public schools.

He is, as demonstrated by another of his suggestions-lowering the “income sensitivity” of the statewide education property tax from $90,000 a year back to the $75,000-a-year level of just a few years ago. Douglas and his Tax Commissioner Tom Pelham, have made no secret of their opinion that the higher limit shields too many taxpayers from the full effect of the statewide property tax. Protected from big tax hikes, these property owner/voters are less likely to pressure their local school boards to hold down spending.

The likelihood that the Legislature-or any legislative body in the English speaking world-would effectively raise the taxes on upper-middle income voters is tiny. Many of these people are adept at calling their legislators and finding (and contributing to) primary candidates to oppose them.

But with his new plan to reduce the amount transferred from the General Fund to the Education Fund, he may not need to change the income sensitivity provision to accomplish his goal of slimming down the public school establishment.

The connection between the Douglas strategy and the Norquist slogan is limited, but unmistakable. For decades before the 1980s, conservatives complained that government spent too much money. The response from liberals, moderates, and even some moderate conservatives was: “Ok, what do you want to cut, and how?”

Conservatives answered that question, but never very convincingly. Not until Ronald Reagan became President did they find an alternative: Just cut taxes, forcing government agencies to reduce spending.

Douglas is following the same path. He could offer suggestions on how schools could cut costs. He could put in place a process-a commission, say, or a series of meetings with school officials, legislators, outside experts and the like-to come up with a plan for saving money without lowering the quality of education.

But he does not seem interested in either course. Instead he is mounting a major effort simply to cut the amount of money the schools get from broad-based taxes, almost daring them to try to make up the difference from their local property taxpayers. This week, his office is sending letters to school boards urging them to spend no more per pupil next year than this year.

On the federal level, the Reagan-Norquist strategy didn’t work all that well. Government spending as a percentage of Gross Domestic Product is no lower than it was in 1981, as more borrowing offset lower taxes.

But that doesn’t mean Douglas won’t succeed. By law, Vermont can borrow, but states don’t have a Central Bank or control of their currency; their borrowing capacity is limited. Spending less or taxing more are the real alternatives.

Besides, he has at least one politically compelling argument, one that differentiates him from the Reagan-Norquist conservatives. Douglas says he wants to keep $63 million in the general fund so it will be available to spend on programs that help the sick and the poor. If that money continues to be funneled into the Education Fund, he claims social programs will have to be cut back, harming the most vulnerable Vermonters.

Among other advantages for him, this argument nicely divides his liberal opponents. Advocates of more (or at least not less) spending on social programs are gearing up to fight proposed cuts. The better job they do convincing voters these funds are necessary for health care, childrens programs and help for the destitute, the stronger becomes Douglas’s case for keeping some of the money out of the Education Fund.

Furthermore, on the face of it, there is a case to be made for financing teacher retirement from the Education Fund. It is, after all,  an education expense. And asking entities which collectively spend some $1.4 billion to make do with $63 million less may strike many Vermonters as reasonable.

On the other hand, all these “Funds,” state and federal, are artificial constructs designed for political expediency, and often “raided” for political convenience. And many school districts are already cutting their budgets in response to the governor’s campaign.

Cutting budgets, of course, while not easy, is simple. Eliminate a class here, a teacher there. It’s cutting budgets without degrading quality that is complicated. There is a danger in starving the beast. Unless done carefully, it could malnourish the brood stock.

All of which will be examined tomorrow.

Tags: Jim Douglas, Tom Pelham

This entry was posted on Wednesday, January 21st, 2009 at 6:00 am and is filed under Politics & Elections, Schools, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.