OK, who won?

Now that the palavering, posturing, and pontificating of the 2010 session of the Legislature is over, it’s time for at least a preliminary evaluation as to who did and did not come out ahead.

Not just by the measurement of raw politics, either. This assessment will also taka a look at whether the day-to-day lives of regular folks were affected by what the lawmakers and Gov. Jim Douglas wrought these last four-and-a-half months.

The short – and possibly welcome – answer is: not too much. A large majority of Vermont citizens who are neither rich nor poor will note little if any change in their bank accounts, their job security, their children’s education, their retirement benefits, their recreations, or their passions because of any legislation passed and signed into law this year.

Welcome news indeed to those who remember the old phrase about how “no man’s life, liberty or property are safe while the Legislature is in session.”

But there were exceptions. No one should be shocked by this news, but in general, the very wealthy came out ahead, while the poor and near-poor did not, especially the poor and near-poor who are ill or otherwise in need of social services.

And some 7,700 middle and upper middle-income households will face higher property taxes, quite a bit higher in some cases.

The results do not mean that impoverished Vermonters are going to be begging in the streets, their open sores exposed to the elements. Legislative sessions, especially as they wind down are: (1) dramatic; and (2) insular. The drama takes place in an enclosed space in which the same relatively small number of people – legislators, lobbyists, reporters, administration officials — constantly interact with one another.

What happens then is that all disputes become magnified and the disagreements are assumed to be more polarizing than they really are. Had Douglas gotten all the spending cuts he wanted – and he did not – the state’s social services would not have evaporated, no more than business investment would have dried up had the Democrats blocked all those tax reductions.

The last dispute resolved, for instance, was over whether the capital gains tax would be cut by $1.5 million or $3.2 million. Not an inconsequential sum, but a tiny fraction of a $3.77 billion budget.

But let’s get to the raw politics, because it’s easy and it’s fun.

Douglas won.

Not everything, but a lot. For a lame duck governor, he showed that he still has a fair amount of clout. He did it by being stalwart (or stubborn, depending on one’s political preferences), betting that the Democratic leaders wouldn’t risk a repeat of last year’s budget veto and subsequent veto override vote.

Last year, they won that vote. This year, they might not have won it in the House of Representatives. And even if they had won it, they feared it might play into Republican political hands, allowing Lt. Gov. Brian Dubie to paint them as big spenders who raise taxes.

Which he’s going to do anyway, but a budget confrontation might have strengthened his case.

Under some circumstances, Douglas’s strategy might have been risky for Dubie and the Republicans, giving Democrats the chance to portray them as friends of the ultra-rich but indifferent toward the needy.

But those circumstances would exist only if a leading Democrat started making that argument a few weeks ago. There are five Democrat running for governor, but none of them stepped forward to make that case. That left Douglas and his allies free to set the parameters of the discussion.

That Douglas “won” does not really mean that the Democrats “lost.” In the final bargaining, they gave up more points to him than he to them. But first of all, this isn’t really a game. Besides, they held firm on education financing. There will be no mandatory school district consolidation, nor a required change in the student-teacher ratio.

In addition, both sides could claim “victory” in that they passed a budget despite starting the year facing more than a $150 million projected deficit. They did so in a collegial manner, and they could claim that the budget was “balanced.”

It might be.

Celebrating the agreement and his success, Douglas said that “while other states are cutting programs and raising taxes in response to the fiscal crisis, Vermont, I am proud to say, is moving in a different direction.”

Sounds good. Except that what he and the Legislature did this year was cut programs and raise taxes. They didn’t eliminate programs or raise the key income, sales, or property tax rates. But they raised some people’s taxes (while reducing others) and effectively reduced the quantity – and almost surely the quality – of many public services.

By how much? Impossible to say, because the “challenges for change” concept grants the Administration broad powers to cut spending. One of Douglas’s victories occurred when the Democrats gave up on their proposal to allow the state to dip into its “Rainy Day Fund” if the “Challenges” process did not save enough money.

It won’t (for reasons to be explored in a post coming soon). The result will be more cuts in services for the poor, the sick, the mentally ill. It was not a liberal Democrat, but Republican Rep. Anne Donahue of Northfield who said (in Thursday’s Times-Argus), the lawmakers are “pretending that we are restructuring services when in fact we will be cutting services.”

The higher taxes will be the result of some tinkering the Legislature did with the formulas for deciding who is eligible for how much “income sensitivity” in determining their statewide school property tax bills. The tinkering means that more people will benefit less from income sensitivity.

According to figures from the Legislature’s Joint Fiscal Office, some 7,700 households will pay an average of $662 more a year in property taxes, a total of more than $5 million.

The hardest-hit will be 423 households earning between $85,000 and $95,000 a year. Their property taxes will rise an average of $1,639 each. But some households with incomes of $40,000 or even less will pay a few hundred dollars more a year.

The money will go into the Education Fund, holding down the statewide school property tax rate. The beneficiaries here are households with incomes too high to qualify for any income sensitivity, and who pay solely on the basis of the value of their property.

Upper-income taxpayers will also reap most of the benefits from the partial restoration of a capital gains tax break. Under the new law, someone with, say, a $10,000 capital gain from the sale of business assets with a Vermont connection would pay taxes on only $6,000. Douglas wanted the exclusion to apply to all capital gains including stocks, bonds, and homes.

In the end, he accepted a partial victory, and the Democrats agreed, in the hope that lower taxes on Vermont-related capital gains would provide an incentive for more business investment which in turn would lead to more jobs.

The evidence for this assumption – or hope –is…is…well, it may not exist, a mystery worthy of detailed examination next week.

“Everything is resolvable at the end. Unless it isn’t.”

This time, it seems, it isn’t.

The words came from Shap Smith, heretofore known not as a Buddhist philosopher but merely as the Speaker of the Vermont House of Representatives

But it was that kind of day at the Statehouse Tuesday, a day of policy and politics; a day of hope and worry; a day, one might say, of now and Zen.

Occasional spurts of activity were followed by long periods of waiting around. The talk in the corridors was sometimes theoretical, sometimes practical. Optimism clashed with pessimism.

Oh, and Democrats clashed with Republicans.

Politely, to be sure. Everyone from Republican Gov. Jim Douglas to Democratic Senate President Peter Shumlin made sure to tell reporters that their discussions were courteous and friendly.

But by the time Smith uttered his mystical mantra, at about 4 PM, they had not resulted in agreement between Douglas and the Legislative leaders on the Fiscal Year 2011 state budget, nor on the taxes Douglas wants lowered. Without those tax cuts and more budget reductions, the Governor has implied, he might veto the budget bill as he did last year.

Nor was there any agreement by mid-evening, and Smith had made clear that with or without a deal with Douglas, the lawmakers would vote on a budget this week. Hence the possibility that Democrats would pass the budget they prefer, taking the chance that Douglas will veto it.

That’s what he did last year, only to have his veto over-ridden. This year, both sides said they wanted to work together, and at least they have behaved more civilly toward one another. In fact, negotiations continued into the night, both sides clinging to the hope that an agreement would be announced Wednesday morning.

Later in the night, though, negotiations broke down without agreement. It’s not quite the end. In theory, talks could resume Wednesday morning. In theory, everything remains “resolvable.” But the “isn’t” outcome seems more likely, as does a veto and a possible veto override session next month.

All day, in fact, there was conjecture, not all of it by Democrats, that Douglas actually wants to veto the budget bill to provide a political boost to Lt. Gov. Brian Dubie’s campaign for governor. According to this theory, a veto would dramatize the GOP argument that without a Republican in the governor’s office, Democrats would just keep spending more money and raising more taxes.

The fact that in its two-year life this Democratic-controlled legislature actually lowered income taxes – albeit minimally – on a large majority of Vermont taxpayers seems not to diminish the potential force of this argument. In modern America, myth and image outweigh mere fact.

The conjecture about Douglas’s political strategy was, of course,  surmise. But it gained some currency by the fact that all day long (actually, for the past several days), the Democrats kept giving ground to the Governor.

Who kept taking it. And asking for more.

By early afternoon, the Democrats had made so many concessions that one Republican lawmaker crowed, “the Democrats are caving on all the taxes,” and some liberal Democrats were grousing about their own leaders.

One of those Democrats said…well, his precise words are too indelicate for this web site. Suffice to say that he suggested that his party’s leaders were acting as though they were the Governor’s concubines.

But some of those Democratic concessions might have been more symbolic than substantive Take the capital gains tax dispute. Last year, over Douglas’s objections, the Democrats reversed a capital gains preference enacted in 2002. That change is expected to raise some $10 million in revenue in the coming fiscal year.

Smith said he thought a compromise could be reached by restoring the preference, but only on capital gains from investments in companies based in Vermont. Anyone who knew much revenue would be lost by such an amendment (Smith indicated he did) wasn’t revealing it. But probably not much. Wealthy Vermonters (and most capital gains taxes are paid by the wealthy) no doubt invest in diverse portfolios on the advice of financial consultants whose job is to make their clients richer, not to play in-state favorites. One of the great things about capitalism is that it is heartless, with devotion to neither person nor place, but only to money.

Nor would the Democrats be giving up much if they repealed the higher estate taxes they enacted last year. In a few years, the federal estate tax, the terms of which Douglas wants the state’s version to follow, might actually take in more money from wealthy estates (the only kind that are taxed) than Vermont’s. So if the Democrats can find a way to delay the revenue loss for a year or so, they might be willing to compromise.

And there seemed little doubt that the Democrats eagerly – if not desperately – want to compromise, while Douglas and his advisors appeared  willing to accept another veto confrontation. This could be because Smith isn’t sure he has the 100 votes needed to over-ride a veto. (Shumlin has a bigger majority in the Senate, and should have no problem). Perhaps significantly, the Speaker never claimed to have commitments from 100 representatives.

On the other hand, as long as today’s topic is political conjecture (not to mention meditation), here’s another possibility. Remember, Shap Smith knows how to play this game, too, as he proved last year when his House overrode two Douglas vetoes. If he has a problem this year, it would seem to come from a handful of his less liberal members. Continuing to give way on these liberal positions (the two taxes), only to have the Governor continue to rebuff him, might be just what he needs to shore up those votes for the veto override.

Again, conjecture, but, again, perhaps given some currency by another development. Most of those less liberal Democrats are from rural areas, where many influential voters are big landowners who oppose the changes to the Current Use system called for in a bill which has passed both houses, but in different versions.

Smith has been in no hurry to bring an amended bill back to the House floor. He could be holding it as a possible bargaining chip, dropping one or more of its most controversial provisions to placate those rural Democrats.

Log-rolling to please the forest industry. Something Zen there.

Around this time last year, the Democratic leaders of the Legislature outfoxed Gov. Jim Douglas. Using their big majorities, they passed a budget that cut spending (but not as much as Douglas wanted) and raised taxes (by more than he wanted, which was not at all).

He vetoed the budget. The Legislature overrode his veto, by a big margin in the Senate, by just enough in the House. Big win for House Speaker Shap Smith of Morrisville and Senate President Peter Shumlin of Putney.

Fade out. Fade back in to now. Douglas is outfoxing the Ds.

Maybe not for long. This is a play with several acts, and before it’s over, Shumlin and Smith could be singing a happy finale while the Gov, a la Tosca, leaps to his (political) demise off the top of the Golden Dome.

For the moment, though, Douglas is playing the part of the leading man (if not exactly a matinee idol) while the Democrats make like a slapstick comedy troupe. Friday morning, Shumlin and Smith said they were confident about ending the session by Saturday as they and their committee chairs neared agreement on taxes, school consolidation, and the “Challenges for Change” process. They were striding toward both adjournment and success.

Then Douglas pulled the rug out from under them.

He didn’t like what they had agreed on, he said, even though they had stripped out one small tax increase he opposed. While he didn’t exactly threaten another budget veto, he…well, he sort of threatened another budget veto.

The timing was interesting. Douglas didn’t express a single policy position he had not expressed before. From the beginning of the year, for instance,  he had called on the lawmakers to repeal the increases in the capital gains and estate taxes they passed over his veto last year. But until Friday, he had not hinted that he might veto the budget over this issue.

Now he did, using a more confrontational tone, perhaps because he no longer  had to be as accommodating. Earlier in the week, he and the Democratic leaders had agreed on a plan to shore up the state’s Unemployment Insurance fund. It was a compromise, but a compromise notably closer to what the Governor and the business community wanted than to what the Democrats and organized labor wanted.

So now it was no more Mr. Nice Guy?

No, that would be going farther than the evidence supports. So far, both sides are playing Mr. Nice Guy because it is in their interest. If Douglas seems to be strutting and bullying, he risks uniting the Democrats against him. To keep the support of some of their wavering members, the Democratic leaders have to appear to be willing to negotiate and compromise. That makes it easier for them to paint Douglas and the Republicans as the obstinate side in this dispute.

Still, while nobody was making predictions, Douglas seemed to be operating on the assumption that this time the Demos don’t have the 100 House votes they’d need to override a budget veto. (The Senate, with its 23-to-7 Democratic majority, would almost certainly override).

And for the moment at least, the Governor seemed to be right. Otherwise, the Democrats might not have agreed to drop the full implementation of the state’s share of a federal deduction for manufacturers, and then also give up on ending the sales-tax free status of dietary supplements. Democratic leaders of the House were walking around with sheets of paper listing the names of the Democratic members who might not support overriding the veto. These members, it can be assumed, were being pleased, prodded, placated, and pled with by those leaders.

But also by Douglas and his associates.

To override, the Democrats would have to get the votes of all 93 members of their caucus, all six Progressives, and at least one of the three independents. They can probably count on one of the independents, Rep. Paul Poirier of Barre, but at this point they are not sure about all the Progressives.

On straight policy grounds, the Progressives would be considered certain to vote with the Democrats. But Democratic leaders are wondering these days whether some of the Progs have political or personal agendas that might impel them to vote with Douglas, as much as they disagree with almost everything he does.

The Dems could give up on the depreciation and dietary supplement taxes because they wouldn’t produce that much revenue. But the bigger tax cuts the Governor wants in the estate and capital gains levies would be harder for the Democratic leaders to accept. Those taxes bring in some $21 million a year, and cutting that revenue would require more budget cuts than the ones already made under both the regular budget process and the “Challenges for Change” enterprise, which is supposed to make government more efficient, but which also requires some straight-out spending reductions.

So if you hear hints that Legislative leaders are thinking about even scaling back those taxes, you can assume they’re having trouble getting enough commitments to override.

But then it would also be a mistake to underestimate the extent to which all the statement pro and con are theatrical. This end-of-session positioning – not just in Montpelier, but also in Albany, Austin, Sacramento, Cheyenne, or the big one down in D.C. – is also posturing. It is, to use the term of Notre Dame political scientist Robert Schmuhl, stagecraft as well as statecraft, an artificial production in which the script calls for all performers to talk tough until they arrive at a harmonious compromise.

Or don’t.

Because no one should be surprised that Douglas and his associates are pushing their agenda as hard as they can. This is Douglas’s last budget, and therefore his last chance to advance his basic policy outlook: less government spending in general, less education spending in particular, lower taxes on business and upper-income earners.

Nor should anyone be surprised if, as many Democrats suppose, some of the Governor’s associates are pushing that agenda even harder than he is. They can’t be confident that Lt. Gov. Brian Dubie will hold the governor’s office for the Republicans.

For instance, in a detailed, 13-page letter to the Legislature on May 3, Finance and Management Commissioner James Reardon (pirated here from the valuable VT Digger web site; it seems not to be on the state government’s site)) claimed that the Legislature’s budget was based on “an unstable foundation of higher taxes and deferred spending decisions which threaten the long- term viability of the State’s economic engine.”

Referring to the tax increases adopted last year, Reardon wrote that “businesses have been clear that these taxes are hindering growth and the necessary reinvestment in our economy essential for its growth. Rolling back these taxes is a critical first step to getting Vermont on the path back to fiscal health.”

The reality that there is at this point no evidence that Vermont’s growth has been hindered by anything at all except for the nationwide Recession is irrelevant here. Reardon’s letter was a political document, part of the end-of-session theatrics, not a dispassionate fiscal report.

What seems not to have been part of the discussion is the possible broader political impact of this squabble, and here the Republicans might face worse consequences than the Democrats. In addition to insisting on repeal of those taxes, Douglas also wants the Legislature to require school districts to consolidate, as opposed to merely suggesting and providing financial incentives for consolidation, as the Democrats propose. There may be broad agreement that Vermont’s 280 school districts are too many. But imposing consolidation by state law violates the “local control” so central to the state’s self-image (even if it may not really exist any more, a subject for another day). And spending less on schools or on the mentally handicapped in order to cut taxes on wealthy individuals is always risky politics.

Media Note: This web site occasionally critiques Vermont’s major news organizations such as the Free Press or Channel 3 because they’re important and because they’re big boys; they can take it. It has not bothered with St. Johnsbury’s Caledonian-Record because it is neither and because critiquing it could be a full-time job.

But some entries are too ridiculous to ignore. Such was the Cal-Rec’s lead story on Saturday: “Angels Say Clyde River Hotel Houses Spirits.”

No, reporter Robin Smith did not claim to be quoting literal angels, just the owners of East Coast Angels Paranormal Investigations, a Connecticut-based outfit to whom the owners of Island Pond’s Clyde River Hotel seem to have paid American money (though only expenses) after hearing strange noises in the 144-year-old building.

There’s a good story in there somewhere, and the reporter did note that perhaps the owners are talking openly about their haunted hotel because they could use the publicity. But the minimum requirement here is at least a smidgen of skepticism that  anything ever really haunts houses (or hotels), or that the kind of “spirits” the East Coast Angels folks said they discovered actually exist. There was no such smidgen in the story.

Note to the Cal-Rec: Next time you quote a fellow bragging about his degree in “demonology,” you might point out that demonology is not a recognized academic discipline.

For a greater understanding of this much-discussed “Challenges for Change” legislation passed by the House yesterday, consider the following objects (or perhaps concepts, or metaphors): the buckets, the silos, the function analysis, the Hail Mary pass.

The buckets were on the tables in the rooms where met the House “committees of jurisdiction,” which is Legislative jargon for the committees that deal with substantive stuff (natural resources, health care, education) as opposed to the functioning of government (appropriations, ways and means).

No, of course there were no actual buckets on the table. These were imaginary buckets, into which Legislative leaders urged committee members to place (imaginarily) the various proposals from the Douglas Administration. One bucket for the ideas the committee would accept, one for those it would reject, yet another for those in the “maybe” category.

Sure, it was a gimmick. But it seems to have worked. In a little more than two weeks, those committees went through the budget of almost every state agency, coordinated them with the “Challenge for Change” report from a consulting firm, and came up with a comprehensive bill designed to make state government work more efficiently, providing “more for less.”

Will it work? Nobody knows. It might not Even some lawmakers have their doubts, and worry that the end result will be little more than old-fashioned budget cuts which will reduce services for the poor, the sick, the elderly.

But “nobody knows” also means that the “Challenges” plan might work, at least to some extent. At any rate, what was evident in Montpelier yesterday – what has been evident there for the last two weeks – is that most legislators think it can work. Otherwise they wouldn’t have spent all that time and effort filling those “buckets.”

And fill them they did. The end result may be in doubt. The process was not. The lawmakers took their task seriously. They spent hours in long, boring discussions about “more effective delivery plans,” about “redesigning structure to improve outcomes,” about getting more people to file their income taxes electronically.

Perhaps because of the boredom,  reporters largely ignored the committee meetings. Maybe that’s why there seemed to be little posturing, political pontificating, or partisan wrangling. Speaker Shap Smith may have been self-serving when he said yesterday that the House had acted with “tri-partisan collaboration,” but he wasn’t inaccurate.

There were no actual silos in the Statehouse either. These are “funding silos,” and in a sense they are the problem the whole “Challenges for Change” project was designed to solve. Over the years, various programs – and the dollars to run them – have been put in different agencies even if the programs have the same goal.

Just to take one example, protecting the state’s water quality is handled by both the Agency of Agriculture, Food and Markets and the Agency of Natural Resources. Each has its own water quality “funding silo,” and while officials from the two departments co-operate, they don’t seemed to have eliminated duplication.

Legislators had hoped that the Administration, in making its proposals for implementing the “Challenge” bill, would try to combine or merge some of these “silos,” and at least some of the lawmakers were disappointed by the results.

“I had anticipated some creative responses,” said Sen. Virginia Lyons, the Williston Democrat who chairs the Committee on Natural Resources and Energy. “I haven’t seen that.”

Engineering her own creative response, Lyons invited Tanya Marshall of the Archives and Records Administration, a division of the Secretary of State’s Office, to appear before her committee Wednesday. Marshall has information relating to the silo situation, though she doesn’t use that term. She talks about function analysis.

“We take the whole, large, complex aspect of state government and break it down into simple components,” she said. “We track legislation, we track the agencies, we track the government functions over time and map them so we link the relationships.”

So, she said, if two agencies are duplicating each other’s efforts, “we’ll be able to understand how they’re connected and can help them achieve efficiencies.”

What Marshall’s office has is essentially a record of almost every function performed by most state agencies for years. A careful analysis of those records could, at least in theory, reveal where agencies were getting in each other’s way and replicating each other’s work.

Does that mean that instead of paying a consulting firm $286,000 for the “Challenges for Change” report, the Legislature and the Administration could have gotten the same results cheaper by calling Tanya Marshall?

Not really, she said, because some agencies don’t provide all their records; it’s voluntary on their part. But, she added, the analysis her office does often reveals “significant overlaps (in which) agencies working in their own environment don’t necessarily know where there are overlaps.”

Even though some subdivisions of the Agencies of Transportation and Nature Resources do not turn over all their records, Marshall said it was likely that there was some duplication in the process of approving permits for construction developments.

Whereupon we segue to the final metaphor – the Hail Mary pass.

As noted at the end of Wednesday’s post (scroll down) while most politicians talked about using the “Challenges” idea to “do more with less,” Gov. Jim Douglas wanted to use it to have the state government “do less with less.” He also had goals that went beyond the “Challenges” report, and he saw the report as a vehicle for accomplishing some of those goals.

So he attached part of his own agenda to the report.

No governor would do otherwise. Politicians (and everyone else) take opportunities when they see them, and Douglas saw the opportunity to accomplish two of his long-time goals: bringing down school spending and easing the permitting process for developers.

It was not only an opportunity; it was surely his last because he’s leaving office at the end of the year. With little to lose, he threw the long ball.

It was not a complete pass. His proposal to give the Education Department the power to consolidate the state’s 280 school districts to 50 or fewer went nowhere at all. His suggestion that most new construction projects be cleared under a “permit by rule,” which is essentially self-regulation, didn’t fare much better. The House Committee on Natural Resources and Energy did agree to allow that kind of permitting in two specific circumstances, and for one of them, even John Groveman of the Vermont Natural Resource Council said the consequences would be “benign.”

Groveman was less sanguine about the other one, allowing “permit by rule” for some projects in which industrial pollutants might endanger groundwater. But Rep. Tony Klein of East. Montpelier, the committee chairman with a strong environmental record, said the change was minor and posed no danger to water quality.

The changes, then, appear to be largely symbolic. But then so is the entire, seemingly unending squabble over “permit reform.” Sen. Lyons said she was “not sure there’s a permitting problem at all.”

There isn’t. It’s a tribal-psychological issue worth exploring another day.

In the matter of this “Challenges for Change” business, let’s first of all deal with the obvious question:

Is it an innovative, visionary concept that can truly “reinvent government,” enabling it to perform its necessary services at a lower price?

Or is it a fraud, a boondoggle in which almost $300,000 (yours) was spent to produce a document full of hackneyed prose designed to paper over an Executive Branch power-grab and the demolition of state services to the needy and helpless?

And here is the answer: Yes.

If that answer suggests that this is a complex subject, it suggests correctly. So complex that it will be examined here in two parts, today and Friday (for now; quite possibly there will be more next week).

The bi-polar quality of the “Challenges” dispute was summed up yesterday by a veteran statehouse operative who said, “the Democrats hate it because they think it gives the (Douglas) Administration too much power. The Republicans hate it because they think it doesn’t give the Administration enough power. If everybody hates it, maybe it’s a pretty good plan.”

Maybe. And maybe, like so many topics of partisan and ideological contention, it will end up neither doing as much good as its advocates claim nor as much harm as its opponents fear.

A little context: Though Democrats (and their non-governmental liberal constituencies) seem more opposed to the “Challenges” approach than the Republicans, the whole thing was mostly a Democratic idea. It was Democratic leaders of the Legislature who hired Public Strategies Group, the Minnesota-based consulting firm whose mission, according to its web site is to “transform government.”

PSG didn’t come on board until this year, but the idea, according to several lawmakers in both parties, was hatched last year, not long after the Democrats defeated Republican Gov. Jim Douglas in the Great Budget Battle of 2009. Last spring, ending weeks of rancorous partisan confrontation, the Legislature over-rode Douglas’s veto of the budget bill – something that had never before happened in Vermont – and imposed their own budget, which combined spending cuts with the tax increases Douglas bitterly opposed.

Even though they won, the Democratic leaders didn’t want a repeat performance this year. First, few people take pleasure in confrontation. Second, the Democrats couldn’t be certain they’d win again. Finally, they didn’t want to raise taxes again because (a) politicians rarely want to raise taxes; and (b) this is an election year, and one of the Legislative leaders, Sen. Peter Shumlin, is running for governor, portraying himself as a “fiscal conservative” who believes “Vermonters are taxed to the max.”

(Not all Democrats agree. Hold this thought for a few paragraphs).

Facing a $150 million deficit, the Legislature had to look into almost any plan to save money. This one, promising to allow the state to “do more with less”, seemed ideal to the Democrats. They could cut the budget without gutting state services. It seemed too good to be true.

As usual when anything seems too good to be true, it was.

The report says it will allow the Legislature to “deliver desired outcomes for $38 million less in general funds,” but it doesn’t really say how.

Or, to be both fairer and more precise, it sort of says how. At one point, for instance, it asserts that the Department of Liquor Control will produce “additional revenue for the general fund through increased sales” (partly through, “a gift card program generating $50,000 in new revenue the first year.”

Oh it will, will it?

As if it were a deity issuing  cosmic edicts, the “Challenges for Change” report declares that certain outcomes will be reached, asserting, for instance, that because of its recommendations, “Phosphorus in Lake Champlain is decreased.”

By magic? For the past decade or so the state has spent tens of millions of dollars to decrease phosphorous in Lake Champlain, which keeps increasing.

Or take the Administration’s  explanation of how it plans to save $1.3 million from the Reach Up (what used to be called welfare) program. At a meeting yesterday of the Senate Health and Welfare Committee, an Administration official said the money would be saved by removing recipients from the welfare rolls because they’d get jobs. “because they’re entering employment.”

Sen. Doug Racine, the committee chairman, was not convinced. There is, he noted, a recession, and assuming that hundreds of Reach Up recipients would find jobs “seems counter-intuitive to me.”

Racine (refer here to the italicized sentence above) is one Democrat who is not enthusiastic about the “Challenges for Change” plans. He is also another Democrat who is running for governor, and it will be interesting to see how this plays out when the Senate takes up the Legislation, possibly next week. Racine might try to lead a fight against adopting the plan, hoping to paint Shumlin as too willing to compromise with Douglas.

Whatever else it ends up doing, the “Challenge” policy is all but certain to  reduce school spending, weaken– maybe a little, maybe not such a little – the social safety net, and tinker with environmental regulation. Opposing such outcomes is likely to appeal to Democratic primary voters.

But the “Challenges report also offered some realistic money-saving suggestions. In a way, hiring a consultant is like hiring an editor; it’s ‘another pair of eyes’ to look over your work. An outsider can more easily take a look at a process or procedure and point out another way to do it, perhaps a way to achieve the same ends for less money. “Doing more with less.”

It’s true that some of the suggestions are just plain common sense, raising the question of why they had not been thought of before. It needed a $286,000 consulting fee to figure out about booze gift certificates? But the whole idea of judging state services by their outcomes instead of by their inputs (time and people-hours) has some potential to save money without degrading the quality of the lives of those who need help.

Besides here’s the other part of the context: This is a done deal, or at least it is as done a deal as legislative bodies get. At a House Democratic caucus yesterday, there were plenty of complaints that the lawmakers “delegated our authority” on budget cuts to an Administration that “doesn’t share our values.”

But in February, both houses passed the bill adopting the general outlines – and the projected $38 million in savings –by huge margins, with only three House Republicans and one Senate Democrat in opposition.

In doing so, the lawmakers “booked” that $38 million. The “savings” (such as they are) are in the Fiscal Year 2011 budget. If the Legislature doesn’t adopt the “Challenges” bill, it will have to find the $38 million some other way because there’s still that $150 million deficit.

Except that actually it’s more like a $160 million deficit. Oh, and the “Challenges” bill won’t save $38 million this coming Fiscal Year. It will save more like $20 million.  The rest will be saved by…well, that’s not certain, but here’s a good bet. It will be saved by doing less with less.

Which is just fine with some folks.  On the January day when the “Challenges” plan was unveiled, the consultants from Minnesota came visiting, and Douglas and the Democrats presented a united front of collegiality and good cheer, that “do more with less” phrase was mouthed over and over.

But toward the end of the afternoon, after a small ceremony in the Governor’s ceremonial office, one man responded by saying, “I don’t want to do more with less. I want to do less with less.”

He said it quietly, and he was standing along one side of the room, with no one right next to him, so it’s possible no one paid him any mind.

A bit strange, when you think about it, because the person who said that was, as it happens, none other than James H. Douglas. He had plans.

“I have given my two weeks notice,” after four years hosting the call-in show, Beaudry said in a telephone interview Sunday evening. Though he said there was still some chance he would decide against running, he described himself as “super-strongly considering it, and doing all the things necessary” to prepare.

That included, he said, laying the groundwork for raising money and hiring staff for a campaign to defeat Rep. Peter Welch, the heavily favored Democrat who will seek a third term in November.

First, Beaudry would have to win a primary against Keith Stern of Springfield, but even Stern’s campaign manager conceded that Beaudry might be the favorite.

“Because Paul is well known he’s going to have some financial support we don’t have,” said Andrew Glover, “and unfortunately money wins the election.”

To counter Beaudry’s name-recognition and financial advantage, Glover said, the Stern campaign would argue that Beaudry is too “ultra-conservative” to have any chance against Welch.

“Keith can get the swing voters, Glover said. “Paul can’t.”

Beaudry, who is 47 and lives in Swanton would almost certainly be the most conservative Republican statewide candidate in years. But that doesn’t mean he couldn’t win the primary. In Vermont, as elsewhere in the Northeast, moderates have drifted away from the Republican fold, some affiliating with the Democrats, others redefining themselves as independents. As a result, a larger proportion of the GOP primary electorate is well to the right of center.

Beaudry said he would run as a “staunch conservative” to balance Vermont’s “bunch of liberals down there” who only want to “spend and spend and spend.”

Beaudry has been a firm supporter of the Vermont Yankee nuclear power plant. He has also devoted several programs to attacking the proposed Wild and Scenic designation of parts of the Missisquoi and all of the Trout River, calling it a “big government land grab.”

The radio program will apparently go on with another host. Beaudry said the owners of True North Radio, whom he would not identify, were already working with a potential substitute for him on the program. Ken Squier, the President and CEO of WDEV, who said he heard of Beaudry’s plans just the other day, also said the program would continue Like some other shows on WDEV, the station itself does not produce True North Radio, but simply sells it air time.

NEXT, A BIT OF PEDANTRY: On Vermont Public Radio’s Vermont Edition last week, Ken Page, the executive director the Vermont Principals’ Association, had some incisive comments about the school and school financing situation.

He also said – not once, not twice, but thrice – that there were “less students” in Vermont public schools these days.

Okay, we all know what he meant: there aren’t as many students as there were a few years ago. But it’s reasonable to expect a senior educator say what he means in proper English. Otherwise, why expect the kids to use proper English?

There are fewer students than there used to be.

That’s not hard, is it?

And it isn’t just pedantry, either. There are no doubt several reasons why English-speaking men and women have made contributions disproportionate to their numbers in science and literature. But surely one of them is the language itself. Its vast and ever-expanding vocabulary gives English-speakers the power to express themselves with more precision and nuance than perhaps any other language.

Maintaining the distinction between ‘less’ and ‘fewer’ is important because maintaining distinctions keeps one in the habit of…maintaining distinctions. And that’s key to precision and nuance.

FINALLY, AN UPDATE: For those who may not have noticed, Gov. Jim Douglas did what the News Guy predicted he would do (see Broken Date, March 26)  and did not veto the bill moving the date of this year’s primary from September 14 to August 24.

No, he didn’t sign the bill http://www.leg.state.vt.us/docs/2010/bills/Passed/S-117.pdf (S. 117), either. He just announced last week that he would let it become law without his signature. That way he gets to express his displeasure with the new law without doing anything to stop it.

Doing anything to stop a bill that had overwhelming support of the Democratic majorities in both houses might have upset “the general collegiality of the (Legislative) session so far,” the Governor said.

He  didn’t say, but probably knew, that refusing to move the date could put the state out of compliance with federal law, risking a voting rights suit from the U.S. Department of Justice and other messy complications.

He did repeat his earlier contention that turnout would probably be lower in August, and that it was not “in the best interest of our representative democracy to have a summer primary.”

He’s right, even if September 14 is still in the summer, scientifically speaking; the autumnal equinox doesn’t occur until September 22 at 11:09 PM. But socially speaking summer ends on Labor Day, September 6 this year. Before then, lots of people are still away on vacation, and even though absentee voting isn’t that complicated, the turnout for an August primary is likely to be dismal.

So why was there no discussion about moving future primaries (too late for this year) to the spring? A majority of states have their primaries before mid-June, when the summer gets under way. Another six states vote earlier in August, and three other states – Alaska, Arizona, and Florida – will be voting the same day as Vermont. The old argument against spring primaries was that they made the election campaigns too long. But these days the campaigns are long anyway.  May or early June is a convenient time for the voting public and would give the winning candidates enough time to organize their general election campaigns.

Uttendorf, Salzburg, Austria

NOTE: To Stowe Reporter readers who had been told today’s post would be about some interesting new health studies: that can wait until Monday. The following should not.

Let’s stipulate at the outset that the folks at the Burton Snowboard company know their business, and if they say they can make snowboards cheaper in Austria than in Vermont, then by gum, they probably can.

Aside from that, the entire discussion about Burton’s decision to move its manufacturing operations from Chittenden County to Uttendorf, Salzburg State, Austria, has been drivel.

Political drivel and economic drivel, all driven (or perhaps drivelled?) by the same pre- or mis-conceptions.

All described by news media who acted the part of clueless doofuses who believed everything they were told, and even a few things they were not.

To begin, with, the story was grossly overblown. The move will cost 43 jobs. That’s 43 of more than 335,000 employed Vermonters, or slightly more than one hundredth of one percent of all workers. Neither the pontificating politicians nor the credulous correspondents even know whether they’re particularly good jobs because Burton isn’t saying how much the production workers earn.

Yes, Burton is an “iconic” (could we possibly retire that word?) Vermont company; if snowboarding wasn’t exactly born in the state, it at least came of age here.

But…the company isn’t moving. Its headquarters and almost all its non-production operations are staying right in Burlington, and even, it seems, expanding. Yet WCAX-TV (Channel 3) opened its Wednesday evening broadcast asking whether Burton’s move raised the question: “Is Vermont business-friendly?”

Well, it’s the default position question, isn’t it? So everybody, starting with Gov. Jim Douglas and his minions, jumped on it with the conventional assumptions.

Which were only about 180  degrees off.

The conventional assumptions are that when a business moves anything out of Vermont, it must be because Vermont is “anti-business.” It taxes the rich. It imposes mandates on companies. It coddles the workers.

Compared with Austria?

Hello, everybody. Austria is in Central Europe. It has many attractions: a highly skilled and industrious work force, Alps, Vienna, schnitzel. But it is decidedly not a place to go to save money. Like the rest of Central (and Western) Europe, Austria is prosperous and expensive.

Not as expensive as Germany, Sweden, or France. But it’s not as if Burton was moving some work to Nicaragua, or South Carolina, where the social safety net is weaker. In Austria, it’s stronger.

You’d-a-thunk someone would have noticed that and raised some questions.

Does anybody still raise questions?

The Governor, to his credit, was somewhat restrained, recognizing that manufacturing is in trouble all over America. Still, he had to throw in that Vermont has “some costs that are particularly troubling to manufacturers,” including taxes and health care.

Others jumped on the bandwagon, apparently (and, as it turned out, accurately) confident that no one would question their premises. David Mace, the spokesman for the Agency of Commerce, told the Rutland Herald that Burton’s move showed that the state has to reduce taxes and  “burdensome regulations.” Tayt Brooks, Commissioner of the Department of Housing, Economic and Community Development, said he hoped the Burton move “serves as a wake-up call to the Legislature…I mean we have bills…mandating paid sick leave…that really send a wrong message to businesses out there in the state.”

In other words, if Vermont adopts mandated paid sick leave (which it will not, at least not now), more businesses might move some of their operations to…well, obviously to Austria.

Where they have mandated sick leave, paid for by the employer at first, then by the Social Security system, said Wolfgang Renezeder of the Austrian Embassy in Washington.

(Note to Vermont reporters: Almost every country has an embassy in Washington. They are all in the phone book. Almost every one has a press attaché, most of them probably as helpful and courteous as Wolfgang Renezeder. Also, for information about economic conditions in other countries, there’s this thing called the Internet…)

Usually, when a business (or even a person) moves (or, as in this case, kind of moves) elsewhere, the immediate response is to argue that Vermont has to become more like the elsewhere.

Let’s examine that. To become more like Austria, Vermont needs:

(1)  Higher taxes;

(2)  stronger labor unions, probably meaning higher wages;

(3)  Five weeks of paid vacation for almost everyone, said Renezeder, because “unions play a very important role in our economy and we do have very strong social rights;”

(4)   An energy system that gets almost two thirds of its electricity from hydropower, wind, solar, and biomass, and none at all from nuclear reactors, which are against the law for generating electricity.

(Austria had a nuclear power plant once but shut it down   after a nationwide referendum back in the 1970s.)

Does anybody else get the feeling that the above does not describe Utopia as defined by Jim Douglas and associates?

None of which means it won’t be good business for Burton to consolidate its production in Austria. It isn’t unheard of for European countries (like American states) to offer subsidies, incentives, or bribes as they are sometimes known, to convince businesspeople to expand.

Burton officials did not respond to a request for explanation, and a call to the home of CEO Laruent Potdevin was not returned.

So we’re into conjecture here. The population density of Salzburg State, where Burton’s plant is located in the city of Uttendorf, is smaller than Chittenden County’s, meaning land prices might be lower.  But probably not much lower; it’s a ski resort area. Property taxes could be lower, too, because in general European countries have minimal local taxes.

But that elaborate Social Security system, the one that finances health care, pensions, and sick pay, costs employers up to 21.9 percent of each worker’s salary (and up to 18.2 percent from the worker), far higher than U.S. payroll taxes. Renezeder said the tax is progressive, “the more you earn, the more you pay,” unlike the flat rate in the U.S.

It’s always possible that Burton has worked out some kind of tax preference deal. But considering that, in the aggregate. Austrians pay one third more of their Gross Domestic Product in taxes than do Americans (this according to the Organization of Economic Cooperation and Development) it’s hard to see how any person or business could move from here to there and not have a higher tax bill.

Or, probably, a higher wage bill. Even if Burton’s Austrian employees are not unionized, most other production workers in the area probably are, which would keep wages on the high side.

From the company’s perspective, though, the workers might be worth it. Some of those Austrian taxes support an elaborate and apparently effective network of vocational schools. It’s a four-year course,  Renezeder said, and the graduates emerge “very qualified, very productive.”

If that’s true, there may be a lesson for Vermont here: Improve vocational education. But unless Vermont wants to transform itself into America’s leading social democracy/welfare state, that’s the only lesson.

Except maybe that reporters should ask questions.

The State Senate’s Transportation Committee held a public hearing this week about “cell phone use while driving,” during which the committee members tried as hard as possible to avoid the subject.

Well, the first two speakers, Sharon Racusin of Norwich and Carol Rose, the executive director of the Vermont Safety Education Center, actually addressed the (supposed) topic of the day. Not only that, they (and, as it turned only they) buttressed their arguments in favor of banning cell-hone use by drivers with actual data.

The senators, by and large, were not interested in data. They seemed more receptive to the final speaker, a businessman who, out of kindness,  will not be identified here, who started off by saying, “I don’t believe the statistics.”

It would be unfair to conclude that the senators didn’t believe the statistics, only that they weren’t about to be dominated by them.

The statistics leave little doubt that a driver using a cell phone is far more likely to cause an accident, possibly injuring or killing himself and others, than a driver not using a cell phone. Allowing those statistics to dominate, then, might persuade a senator to support at least a partial ban on cell phone use, as is the law in 29 other states.

But the senators don’t want to pass such a law. Otherwise they would not have spent so much of their time asking questions about the dangers of text-messaging while behind the wheel. That’s what they want to ban by law.

In fact, the Senate has already done its part, passing S 280 last week by a 25-0 margin. Now, say the senators, it’s up to the House.

Not so fast, says the House, where most members want to go farther, also banning hand-held cell phone use and changing the seat belt law to “primary enforcement,” so that police officers could enforce it even if they had not stopped a driver for another offense.

“Highway safety really needs a comprehensive approach,” said Rep. Maxine Grad, a Fairfax Democrat who is the sponsor of the more far-reaching House bill. “We’re talking about public health and safety.”

So while the hearing itself produced almost no useful information, its very lack of substance illustrated what it was trying to hide:

–A House-Senate game of chicken;

–The bi-partisan, bi-ideological inclination of Vermonters (and not just elected officials) to prefer personal observation, anecdotes, and even gossip, where it is convenient,  to empirically testable data, as if, “I don’t believe the statistics” were the state’s motto;

–The apparently widespread if unspoken Vermont assumption that the right to be left alone in your car is comparable to the right to be left alone at home.

“It goes back to the fight (in the 1980s) over the child restraint law,” said Carol Rose of the Safety Education Center. “A kneejerk reaction of ‘don’t tell me what to do in my car.’ Or ‘I don’t want big brother telling me what to do with my kids.’”

Among those who seems to share that outlook is Gov. Jim Douglas, who in the past, according to Tom Williams of the American Automobile Association, has mentioned “personal freedom” concerns in relation to regulating what drivers may do in their cars. Just last week, Douglas worried that banning cell phones could put the state on a “slippery slope,” presumably toward outlawing coffee drinking, eating, and other common driver activities.

From a strictly legal perspective, the personal freedom concern does not exist. There is no right to drive a car on public roads. Were there a right to drive, no one would need a license. The state does not issue permits granting freedom of speech or protection against unreasonable search and seizure. Those are rights.

Permission to drive is a privilege granted by the state, which created the highway system, maintains it, repairs it, and patrols it. So the state has the authority – and arguably the responsibility — to impose any reasonable rules and regulations for using that system.

But legal/constitutional reality does not always trump culture, and apparently some Vermonters connect their automobile with their personal freedom.

Not a completely irrational connection. Especially in rural areas – which is where the car/freedom link seems strongest (seat-belt use is far lower, for instance) – a car expands one’s mobility and options, which are not unrelated to freedom. Besides, people impose their personalities onto their cars (or select the car that fits their personality). So the ‘don’t tell me what to do in my car’ attitude is understandable,  if unsupportable in law or logic.

At any rate, it seems to be carrying the day in the Senate. So does not paying attention to data, asking for little of it, and instead bringing up personal impressions.

“I find that the most (diverting activities) when I’m driving are changing the CD and dealing with hot coffee or tea,” said Senate President (and Democratic gubernatorial hopeful) Peter Shumlin of Putney.

When the senators did resort to actual evidence, they did so selectively. Sen. Phil Scott, the Montpelier Republican (seeking his party’s nomination for lieutenant governor) pointed to a study by Virginia Tech indicating that eating, changing CDs, or putting on make-up are more distracting than using a hand-held cell phone.

It was, implicitly, Douglas’s slippery slope argument, and Scott was reciting the statistics accurately. What he ignored was evidence that it is the use of electronic devices, including cell phones, which have “increased exponentially in recent years” in the words of Despina Stavrinos, a researcher at the UAB University Transportation Center, describing research prepared for the U.S. Transportation Department.

Using a cell phone, according to government data, impairs a driver as much as being drunk under Vermont law.

To be sure, the folks on the other side of this debate aren’t always guided by data, either. Rep. Grad’s bill (H 493) would ban only hand-held phones. But the government data indicate that the hands-free cell phones are no safer than the hand-held. That’s why, according to Tom Williams the Northern New England Regional Manager for the American Automobile Association, his organization does not favor the cell phone ban.

But as Grad said, a ban on hands-free calling would be harder to enforce. A cop who sees a driver with a phone to her ear has evidence. If he just sees her moving her lips, she can always claim (having of course turned off the phone as soon as she saw the bubble-gum machine behind her) that she was singing along with the radio or her I-pod.

Even if there is no right to drive there might be legitimate civil liberties concerns about changing from secondary to primary seat belt enforcement. That gives the individual cop a lot of leeway to, for instance, stop a car to check for seat-belt use just because he didn’t like the political point of view expressed by the car’s bumper stickers.

Ironically, one possible alternative came from the businessman who didn’t believe in statistics. Instead of banning cell phone use, he suggested, why not increase the penalties for drivers who cause accidents because they were on the phone? That might serve as an effective deterrent.

As it happens, though, no such bill has been introduced.

Oh, and speaking of data, here’s some about Vermont from the National Highway Traffic Safety Administration. If the state went to primary coverage of its seat belt law, compliance would rise – and the number of accidents would decline — enough to save insurance companies $1,316, 000, and the state treasury $498,152.

That may not be a conclusive argument on behalf of primary enforcement. But it is powerful evidence that when drivers assert their individuality by not wearing seat belts, or by talking on the phone, they cost the rest of us money. Driving is a collective, not an individual, activity.

Forenote: There will be an extra News Guy posting tomorrow, Thursday (as well as the usual Friday posting), along with an announcement about some new developments at the web site which we trust will be received favorably.

Actually, it might be more accurate to consider today’s post the “extra” one. Tomorrow’s will have more news; what follows is a bit of musing on Vermont and consistency.

Back in the day, Sen. Russell Long, the Louisiana Democrat who chaired the Senate Finance Committee for a century or so, used to sum up the average person’s attitude toward taxation as follows: “Don’t tax you, don’t tax me, tax that fellow behind the tree.”

Bad poetry, but good political analysis.

As Vermonters are now learning (and proving), the same phenomenon applies to spending. From Gov. Jim Douglas on down, the attitude of the body politic is: “Cut the other guy to the bone, but leave my favorite program alone.”

Poetry no better. Perspicacity identical.

Exhibit A comes right from the top. For years, Vermont farmers and woodland owners have gotten a tax break thanks to the “current use” tax assessment. Nobody opposes this policy in principle; it’s kept thousands of acres open and green by removing an incentive for landowners to sell to developers.

But it’s also expensive.

According to whom?

According to the Douglas Administration, whose tax commissioner, Richard Westman, just a few weeks ago identified the Current Use policy as one reason everybody else’s property taxes keep rising.

As it happens, over the last year or so, the various “stakeholders” of Current Use – farmers, foresters, environmentalists, local officials – have been meeting to try to figure out a way to get a little more money for the state treasury without seriously diminishing the advantage to landowners.

And they succeeded. Or at least most of them thought they did, and they presented the Legislature with a plan that would bring in another $1.6 million in revenue.

Oh, no, said the Douglas Administration, represented in this case by Agency of Natural Resources Secretary Jonathan Wood. Yeah, we need money. We’re $150 million in the hole. But we don’t want money from these landowners because…well, because it’s a good program, Wood said.

Yeah, but they’re all good programs. Maybe what he really meant was—These are our friends.

Then there was the Governor’s major power play to get a special Legislative Board to approve spending several more million dollars for one of his pet programs even as he insists on cutting almost everything else. This was the cap-raising of the Vermont Economic Growth Incentive . (See VEGI Burgher,” the January 13 post)

Assume for the sake of discussion that this, too, is a valuable program. But it never seemed to have occurred to Douglas to apply the same standards to it that he wants imposed on other agencies—spend less than you have in your budget this year because we all have to tighten our belts.

Do not suppose, though, that this “cut everybody but me” attitude is limited to Douglas and his fellow Republicans. At a Democratic fund-raiser a couple of weeks ago, former Gov. Howard Dean scolded lawmakers who might be willing to consider reducing the budget of the Vermont Housing and Conservation Board.

“We need that program,” Dean said. “It is the perfect public-private partnership.”

It may be, and like Current Use, it has been useful as a conservation mechanism. But it couldn’t survive a year or two with a little less money?

The liberals are somewhat less inconsistent than the conservatives here, because some of them openly call for some targeted and temporary tax increases to help the state over its $150 million budget shortfall. But everybody agrees that programs will have to be cut.

Just not their favorites.

OK, some folks are willing to take less. State workers took a three percent pay cut. Yes, they did it under pressure and to avoid more layoffs, so it wasn’t just an act of noble sacrifice. But it was a sacrifice, as was the five percent pay cut taken by their bosses, the “exempt” state workers who earn more than $60,000 a year. The Stowe teachers agreed to give up the 5.5 percent pay hike they had negotiated for this year.

But these seem to be the exceptions. The default position for Vermont advocates left and right remains a firm and forthright conviction to cut spending. On everybody else’s programs.

Aftnote: Because the News Guy rarely misses an opportunity to ridicule or insult the Burlington Free Press when it deserves ridicule or insult, it’s only fair that the paper’s triumphs be recognized. Last Sunday alone it had three pieces of first-rate journalism: Sam Hemingway’s lead story about tritium contamination at nuclear plants nationwide, Nancy Remsen’s story about the potential impacts of state budget cuts, Candace Page’s fascinating account of niche marketing agriculture in Vermont.

Does Vermont coddle the Middle Class?

Gov. Jim Douglas thinks so, and he may have a point.

No, the governor didn’t use those words. But take a look at his budget message of last Tuesday and some of his other recent proposals.

“Maintaining coverage for the greatest number of people will mean scaling back benefits for some,” he said in his speech to the Legislature.

At that point, he was talking about health benefits. But the same theme echoed throughout the speech: In order to protect the services and subsidies that go to the poor, Vermont would have to cut back on those services and subsidies for the not-so-poor.

And while some of those not-so-poor are very low income, many are not. In both tax and social policy, Vermont provides benefits to thousands of people whose earnings are close to – or higher than –the middle of the income spectrum.

For instance, a family of four can get health care assistance in Vermont if its total income is under $68,400. That’s way above the poverty line for a family of four ($21,834 in 2008). It’s even higher than the median household income in the state (about $66,000) before the Recession started.

Then again, it’s less than the median income in Vermont for a family of four. That’s was $71,382 a couple of years ago, one of the highest in the country. Still, by any reasonable definition, a family of four living on $68,000 a year is neither poor nor low income. It’s right there in the middle.

Meaning, at least according to conventional assumptions, it ought to be able to support itself. After all, this is America, the richest country in the world and the one that created mass affluence. Shouldn’t moderately affluent people pay their own bills?

Nor is health care the only example. A large family – two parents and six children – can get state help winterizing its home if its income is higher than $74,000. In all, Douglass said, “nearly one-third of our population receives services from the State… Since the beginning of the decade, overall spending for human services has more than doubled – a growth rate of three-and-a-half times inflation.”

Conventional assumptions, to be sure, ought to be challenged from time to time. As it happens, most Americans no longer live better than their counterparts in many other countries, partly because those counterparts don’t have to pay separately for health care at all. And in this country, health care has gotten so expensive that it could pose a heavy burden even on the moderately affluent.

Still, the case made by Douglas and other economic conservatives is not frivolous. If nothing else, they are asking a legitimate question: In a culture that values (or at least claims to) self-reliance, where should the line be drawn between personal and social responsibility?

Despite the claims of some of his liberal critics, Douglas remains a moderate, not one of those ultra-conservative Republicans who believe – as Newt Gingrich proclaimed in 1995 as he prepared to become Speaker of the U.S. House of Representatives – that government ought to do little more than defend the country and print money. Douglas proposed expanding several state programs in his speech, and did not call for abolishing any.

But he does want to save money, mostly by cutting services to middle-income and even some affluent people and by raising their taxes.

Again, he didn’t put it precisely that way. No sane politician is going to say, “I want to raise the taxes of middle-income and upper-middle-income homeowners.”

But that would be the result of Douglas’s plan to alter the “income sensitivity” provisions of the statewide school property tax. Instead of all households with income under $90,000 protected from paying more than 1.8 percent of their incomes on that tax, those earning between $60,000 and $75,000 could pay as much as 2.25 percent; for households between $75,00 and $90,000, the limit would rise to 3.5 percent.

Of course that might not be a tax increase if local school districts froze their budgets, as Douglas proposed. But they don’t seem likely to follow his advice. Either way, families who earn $90,000 a year, even big families, are in the top 20 percent of all earners. By any definition they are affluent. Why do their property taxes need to be subsidized?

Democrats claim that income sensitivity is not a subsidy, but a method of linking taxes to each taxpayer’s “ability to pay.” It may be that, but it is also a subsidy; whatever the homeowner saves on property taxes because of income sensitivity is made up for by funds from other taxes, mostly the income tax.

And that tax, in turn, is disproportionately paid by upper-income earners. When economic conservatives, including Douglas, complain that Vermont is a high-tax state, what they really object to is that it’s a high-tax state for high earners. Lower and middle-income Vermonters – even those up near the $90,000 range – pay little if any more in state and local taxes than do their counterparts in many other states, especially in the Northeast. But because the state tax structure is relatively progressive, the wealthy pay a bit more. Among other things, they are subsidizing, through income sensitivity, the affluent as well as the poor.

Unless income sensitivity is altered, then, there might be renewed pressure to raise taxes on the very wealthy to help make up for what the merely affluent don’t pay in property taxes. Douglas adamantly opposes any such tax increase. In fact, he wants last year’s small hike in taxes on the wealthy rolled back.

This debate, then, is, among others things, a class conflict. Not the traditional version in which the workers with their pitchforks storm the banks. Not even the more recent brand in which the bankers with their lobbyists and their pseudo-think tanks storm the government and the media.

This class conflict is more nuanced, more interesting, and perhaps necessary. It’s all about precisely who qualifies as “middle class,” who in that middle class deserves tax breaks and government services, and who will pay for them. A healthy debate as long as it does not degenerate into a situation in which everybody is trying to protect his/her own government benefits and tax breaks at the expense of everyone else.

It would be irresponsible to leave this discussion without noting that some of Douglas’s proposed budget cuts would hurt the very poor. For instance, he noted that Vermont’s Medicaid system allows an “unlimited number of emergency room visits” by recipients. “Capping ER visits that do not result in hospitalization at 12 per year will bring Vermont more in line with peer states – saving money to preserve this benefit for everyone in the system,” he said.

No doubt it would. Not only that, but it’s a good bet that some of those emergency room visits, being unlimited and free, aren’t really necessary. But those unlimited visits also probably help explain why Vermont is regularly designated the healthiest state in the union. The most obvious consequence of reducing health care services for the poor is that the poor will become less healthy.