In his last State of the State address, Gov,. Jim Douglas demonstrated once again that he is tenacious, determined, single-minded, and bold.

And maybe a little clueless?

It was a fairly long (5,917-word, 50-minute) speech to the Legislature, clear if not eloquent in composition, crisply delivered, politely received.

And familiar.

In fact, if some in the audience thought they had heard similar sentiments similarly expressed not all that long ago, they were right. Similar statements had been similarly expressed a year and a day ago in the same place by the same speaker, in his fourth inaugural address.

Leading some to wonder why, early in the speech, Douglas warned his listeners not to “choose to recycle old ideas and hope for a different outcome.”

In this case, the governor recycled some of his old ideas, including several that he’d proposed last year. He didn’t get them then. If he’s hoping for a different outcome this time, he would seem to be ignoring his own advice.

After all, little has changed. It’s the same Legislature that ignored most of his proposals last year and over-rode his veto twice. If anything, the lawmakers are more confident than they were a year ago, especially because one thing that has changed is that Douglas decided not to run for re-election.

In other words, he’s a lame duck. He keeps insisting that he isn’t, though he is, or at least that it has not weakened him politically, which would be a first in the history of the country, if not the world.

So why did he make the same controversial (and probably doomed) proposals again?

Because he really believes in them. Because he’s tenacious and bold. Because he thinks this time he might prevail.

Or because he’s clueless.

As he did last year, Douglas urged the Legislature to set a cap on local school spending. It didn’t. As he did last year (though in slightly less blunt language) he called the school finance system “broken,” implying that the lawmakers should replace it. As was true last year, he didn’t specify what the replacement would look like, leaving that to the lawmakers. Perhaps because most legislators don’t agree that the system (Acts 60 and 68) is “broken,” they came up with no replacement last year. They won’t this year, either.

But Douglas did not stop at recycling his old ideas that were not adopted. No, bulling right ahead with little hope of success, he came up with some new ideas that are almost certainly not to be adopted, as follows:

–Repeal – or at least pledge to repeal in the near future — the capital gains and estate tax increases adopted last year;

–Require teachers to pay 20 percent of their health insurance premiums;

–Trim the “income sensitivity” provision of the statewide education property tax so that middle-income homeowners pay more and the wealthy pay less. (of course, he didn’t word it quite that bluntly, but that’s the gist of his proposal);

–And while this was more a suggestion than a specific proposition, Douglas made clear he thought it would be a good idea if all the teachers emulated state workers and took an immediate three percent pay cut.

(Not an outlandish idea, but unrealistic. The state employees agreed to the cut in their new, statewide, contract. Teachers contracts are district-by-district, and they do not all expire at once).

It was hardly necessary to wait until the speech was over to figure out that Douglas was not convincing the legislators. Six times the audience in the House Chamber interrupted the speech with applause. But except for the early support for his tribute to Vermonters fighting (or soon to be) overseas, almost all the clapping came from the balcony, full of old friends and administration officials.

Down on the floor, where the lawmakers sat, few applauded except for the stalwart but decidedly outnumbered Republican contingent—50 of 150 House members, seven of 30 senators, and not all of them firm Douglas allies.

Perhaps because they know they have the votes and Douglas doesn’t, the Democratic Legislative leaders were relatively restrained in their post-speech comments. Snate President (and Democratic governor hopeful) Peter Shumlin and House Speaker Shap Smith both said they were willing to discuss the governor’s ideas. Sen. Susan Bartlett of Morrisville, another candidate for governor, called the speech a “pragmatic first step” in this year’s legislative process. Sen. Doug Racine of Richmond, yet another gubernatorial hopeful, said he agreed with Douglas that the state is in a “tough” fiscal bind.

Then, bit by bit, they began to say what they really thought. Douglas’s proposed tax cuts would “reduce Vermont revenue by roughly $28 million,” Shumlin said. Bartlett said that Douglas “wants to have his cake and eat it, too,” because he didn’t call for repealing the income tax cuts adopted last year, only the capital gains and estate tax increases.

Racine said the speech sounded like “a list of the things he promised to do seven years ago and failed to do,” such as extending broadband Internet service statewide and cleaning up Lake Champlain. And Sen. Mark MacDonald, a Williamstown Democrat, said Douglas’s proposed changes in the income sensitivity mechanism would “raise the property taxes of working Vermonters and cut them for out-of-staters,” some of whom own large tracts of land. Income sensitivity used to hold down the tax bills of 80 percent of Vermonters, MacDonald said. It is now down to 70 percent, and Douglas wants to reduce it further.

Despite these dismissals, a few of Douglas’s proposals might actually get adopted, though probably with some alterations. Regardless of party, almost everybody in state government agrees that public education in Vermont is expensive, in large part because there are, as Shap Smith put it, “legitimate questions about the pupil-teacher ratios.”

They are very low, 11-to-1 statewide, Douglas said, and he proposed “a mechanism to fill only one vacancy for every two retirements.”

A politically sophisticated plan, because it doesn’t require firing anyone, and because raising the ratio to 13 to 1, as he suggested, hardly degrades the quality of education. Perhaps not a realistic plan, though. It’s based on statewide numbers, but teachers neither teach their classes nor retire statewide. They do it school by school, where the numbers may not always add up (or subtract down) precisely the right way to allow reducing faculty without letting some classes get too big.

Still, here’s one area – quite possibly one of the few– where the legislators might build on (or off) one of Douglas’s proposals.

Gov. Douglas. Speaker Smith half hidden behind his right shoulder

And the lawmakers returnedeth to Montpelier, where layeth down the lion with the lamb. Nor did the Democrats unsheathe their rhetoric against the Republican governor, who in turn utterethed not the words, “irresponsible spending.” But stoodeth they side by side, as brethren that dwelt together in unity.

All right, all right! Enough of that! Let’s heed the advice of veteran Democratic Rep. Michael Obuchowski: “Don’t be too cynical.” What began in Montpelier yesterday was both sincere and bipartisan. Democrats and Republicans from both houses, legislative leaders and Gov. Jim Douglas’s top aides (not to mention Douglas himself), who….

Oh, you mean the same guys who just several months ago stopped barely short of questioning each other’s parental legitimacy? The same guys who still hold diametrically opposing views on how the state should be governed? We’re supposed to believe this era of good feeling will last?

…are really trying something new, an innovative approach . This time, state officials are not acting on their own. The Legislature is spending $200,000 for the services of Public Strategies Group, a Minnesota-based consulting firm which is….

Waitaminit, Waitaminit! We’re supposed to take seriously a firm that could write the sentence, “To achieve this client centric approach, the State will seek to redesign the delivery system through the more effective and efficient alignment of financial and staff resources across public sector programming, such as economic benefits, social services, health and human service programs”? It’ll cost us more to translate that into English than we’ll save by following their recommendations.

…providing advice on how to “do more with less,” as several legislators said, for instance…

More with less? Don’t be ridiculous. When the inputs are smaller, so are the outputs. Any time a politician brags about a “win-win” solution, somebody loses.

…having a “unified and systematized…human service intake” system, so that Vermonters who needed social services could enter the system through “one doorway,” rather than having to visit several different agency offices. Similarly, according to the Public Strategies Group report, “streamlining” the process of granting permits to developers could “increase compliance with state regulations while spending 3% less in (Fiscal Years 2011 and 2012).”

Not those old saws again. This “one-stop shopping” plan for both social services and development permitting has been around forever. Furthermore, almost nobody is against it. Douglas and the Legislature could have put all that into effect years ago without the advice of some clowns from Minneapolis.

The consultants came up with some other ideas. For instance, they suggested the state could save money if it would “empower families to support aging Vermonters and individuals with disabilities. Vermont is spending almost $69 million from its General Fund for these services, and “aging demographics and reduced public resources may be requiring Vermont to reconsider its expectations about whom it can afford to serve.”

In English, that means don’t do as much for some doddering old geezers and disabled folks of all ages. That’s doing less with less. They admit it.

If there is a central guiding principle behind the Public Strategies Group’s recommendations it is that the state should not pay for services as much as it should pay for the results of those services. In effect, the PSG’s report says, Vermont and other states use something comparable to the health care system’s widely criticized “fee for service” method, “paying providers ‘hit by hit’ rather than…paying for outcomes.”

Instead of paying for the work being done, the consultants said, the state should pay for the results obtained/

As an example, PSG’s Babak Armajani told members of the Joint Legislative Government Accountability Committee, instead of paying for “a night of bed-space” for a caretaker to tend a sick child all night, the state could “actually purchase the (desired) outcome,” of a healthy child.

Excuse me! In this case the desired outcome is what the state is paying for. The service itself – a sick child not alone in the night but watched over by a health care professional – is the desired outcome. That’s often true with sick children or physically and/or mentally disabled people of any age. They have to be taken care of. The taking care of them is the outcome. It’s expensive.

(Armajani later acknowledged that he might have chosen the wrong example. Instead, he said, think of a social service agency hired by the state to deal with troubled children. Instead of paying it according to how many nights a child stays in its facility, pay it for quickly placing an abandoned child in a good home).

The Joint Committee adopted the 42-page report from the consultants and the committee’s own five-person “steering team” of three legislators and two Douglas Administration officials. The report envisions possibly saving $38 million in Fiscal Year 2011, which begins July 1, without major cuts in state services.

Yeah. That’s a lousy 38 million bucks of a projected $150 million budget shortfall. Let’s see. If this pocket calculator is correct, that still leaves $112 million of money to be raised or programs to be reduced or eliminated.

Meaning that the big-wigs are still facing the choice of raising somebody’s taxes or cutting services to people who really need them. Not that it would actually come down to ‘crippled children left out in the cold.’ But it might be close.

And how about considering the possibility that this report and this display of harmony is a way of: (a)diverting attention from the real choices (and possibly the real disputes) confronting them; and (b) laying the groundwork for making the case that they tried as hard as they could to avoid having to consider raising taxes or slashing services. The possibility, in other words, that all this was less bipartisan harmony than bipartisan political theater.

Afterwards, Douglas and House Speaker Shap Smith and Senate President (and candidate for governor) Peter Shumlin, the Democratic leaders who orchestrated last year’s first-ever legislative over-ride of a governor’s budget bill veto, stood together and pledged to work together to solve the state’s budget problem without last year’s rancor.

When Shumlin said, “Do not doubt our resolve. We will get this done,” he said it forcefully enough to raise doubts in even the harshest cynic.

Okay, Okay. Maybe they mean it. And this consultant stuff doesn’t hurt. It’s like having a good editor go over your copy. There’s nothing wrong with hiring someone to take a fresh look at the old ways you’ve been going about your business. If not taken to extremes, efficiency can be useful.

It’s just that whenever you hear politicians talk this way, you should remember the immortal words of Sammy Cahn and Jule Styne.

Who?

The guys who wrote the music and lyrics to, “It seems I’ve heard that song before”

Pay attention because today’s post is going to provide exclusive answers to one of the great unresolved questions bedeviling the people of this fair state: Why Is Vermont’s State Government Facing a Budget Shortfall?

Ready for the answer? Brace yourself for shock. Make sure you’re seated and have not just partaken of a large meal (though recent imbibement of a cocktail or two might not hurt).

OK, here it is: Because Vermont is Part of the United States of America.

Almost all of which is in deep recession, even if it has been declared officially over. The unemployed and under-employed don’t pay much in the way of taxes. The newly foreclosed don’t buy much. The businesses who used to sell to them aren’t expanding.

Not here in Vermont. But hardly anywhere else, either. Most state economies are in worse shape, and most of their governments are facing worse budget shortfalls.

This does not mean Vermont has no budget problem. It does seem to mean that though state policy-makers may have made some mistakes in the past that rendered the state more vulnerable to the ravages of recession, they didn’t make any more – and possible not as many – as their counterparts elsewhere.

In a report titled, Beyond California: States in Fiscal Peril, The Pew Center on the States counts nine other states facing deep budget crises in addition that big one on the left coast.

Vermont is not among them. In fact, Vermont was rated among the fiscally less troubled states.

Even more pessimistically, a report from the Kaiser Family Foundation finds that only two states – Montana and North Dakota – are not “facing budget shortfalls.”

From the statistics alone, it was impossible to determine the source of the good fortune of these two states, though it’s reasonable to suspect that it has some connection with the coal, oil, and natural gas underneath them. Under the circumstances, all the rest of us help pay their taxes every time we start our cars or turn on a light. If only maple syrup were a necessity instead of a mere delight, Vermont’s budget might be easily balanced.

(Objection One: Isn’t there a lot of oil under California? Yes, but California is so huge, its economy so diverse, that the petroleum revenue adds up to a paltry percentage).

(Objection Two: Isn’t it sad to deride a delight, which in a sane world would be treasured more than a “mere” necessity? Yes).

Both the Pew and the Kaiser studies show why Vermont is not as hard-pressed as some other states. The root cause of the problem in all states is the Recession, which stemmed from what the Pew study called “the bursting of the housing bubble.” That’s why, the study noted, three of the nine states in almost as much trouble as California are its neighbors – Arizona, Nevada, and Oregon – into which some of the California housing boom (and unsustainable lending practices) spilled.

For several reasons, the bubble in Vermont never expanded as recklessly as it did in some states, so the “burst” was less damaging. Vermont’s foreclosure rate is the lowest in the country.

Why? Well, tighter regulations may be one factor; mortgage prepayment penalties are illegal here, for instance. But the figures indicate that the state’s economy generally sat on a relatively strong foundation. The report by the Kaiser Family Foundation shows that since the Recession began, Vermont’s unemployment rate has gone up less than the nation’s as a whole (1.6 percentage points compared to 3.6).

It even seems possible, reluctant though we may all be to find anything good to say about political office-holders, that Vermont’s leaders were more responsible – or at least less irresponsible – than their counterparts elsewhere.

“Virtually every state had to make tough decisions this year about where to cut and how to raise additional revenues,” the Pew report said. “But in some states, lawmakers punted the responsibility,” refusing to cut spending or raise taxes. Vermont did both. It may not have been pretty to watch or pleasing to any political faction, but as a result the state has a smaller budget shortfall than most others.

The Pew report gives Vermont a “score” of 13 (lower is better), tied with Virginia, and better than all but nine other states. The Kaiser Family Foundation report also finds that only ten states have less serious budget problems than Vermont.

(Most, though, not all, ten are the same in the two studies, which were taken at different times and used somewhat different criteria. Their basic conclusions, though, seem consistent).

Still, Vermont has a rather substantial looming budget deficit which is likely to dominate the Legislative session beginning next month. The exact size of the extent to which likely revenues for Fiscal Year 2011 (starting next July 1) will fall short of projected expenses is unclear, but should add up to roughly $100 million.

That’s a lot of money, and the early indications are that the Legislature is going to “find” it by cutting spending. Both legislative leaders, Senate President Peter Shumlin of Putney and House Speaker Shap Smith of Morristown, have come out against any new or higher taxes. Considering that they’re both Democrats, the party less resistant to raising taxes, it’s unlikely that taxes will go up.

Unlikely but not certain. There is at least one dissenter, State Sen. Doug Racine of Richmond (check the December 7 post here), who favors a temporary tax increase to avoid deep cuts in social programs. And wait until the advocates of those social programs get television news footage showing the impoverished, disabled children whose lives would be further impoverished by some of the cuts that would no doubt be proposed.

People don’t want to pay taxes. Neither do they want to abandon needy children. That Vermont may have to abandon fewer of them than most other states is not likely to make the decision much easier.

(Note: This is obviously the first of several examinations of the state’s budget situation; Wednesday’s post will be on a different topic, but we’ll return to this one next Monday

What happened to Friday? As indicated earlier, on the assumption that almost no one will be reading this kind of stuff on Christmas and New Years Days, there will be no new postings the next two Fridays.)