Speaker Smith

Do you suppose Shap Smith has the votes?

The Speaker of the House needs 100 of them – that would be 99 of his fellow-Democrats, Progressives, and independents (and possibly a Republican defector if needed?), plus himself, to over-ride Gov. Jim Douglas’s veto of the Fiscal Year 2010 budget and tax package.

“He’s got a hundred and two,” said a state official who tends to know what’s going on in the Legislature.

Could be. Though predicting what any legislative body is going to do two weeks hence is a fool’s errand (the Legislature will reconvene June 2), there are several signs that Smith may have commitments from at least 99 other House members.

The way Smith and Senate President Pro Tem Peter Shumlin have been talking the last few days betrays a bit of confidence, if not quite cockiness, that they can enact their budget over the Governor’s objections. Shumlin’s Senate has such a huge Democratic majority that the override is hardly in doubt. The House vote will be closer, but even Douglas, in announcing last week that he would veto the budget bill, conceded that it might well be over-ridden.

Thereby raising the question of why he’s going to risk the humiliation. It’s only been a month since he suffered the first over-ride of his governorship – and only the seventh in the history of the state – when both houses enacted same-sex marriage despite his veto. Politicians don’t like humiliating defeats. The possibility of two in a row might convince the average governor to make a deal, or even to let this bill become law without signing it.

But Douglas opted to fight, and in his letter to Shumlin and Smith he explained both the principle and the politics of his decision. The principle, from his perspective, is that “if my only choice is between allowing your fiscal 2010 budget to become law or a veto, I must choose veto. I cannot abandon Vermonters’ long-term economic security for short-lived political accord.”

In other words, he thinks that the Democratic spending and tax package is very bad public policy. But he also indicated he thinks it’s very bad politics, which will hurt them and help him before the next election.

“If this budget becomes law over my veto…I am prepared to accept that outcome. But understand that what you reap is what you sow; the adverse effects of your tax and spending choices will ripple through the Vermont economy for years to come and those consequences will be your sole responsibility.”

Allowing for the usual overwrought political rhetoric, the Governor has a point. How long or how deeply the Legislature’s budget/tax package “will ripple through the Vermont economy” is open to debate. But however the ripples flow, it is the Democrats who will be responsible for them.

For the moment, at least, the Democrats seem unconcerned. That’s because they’re convinced that Douglas is wrong on both the policy and politics. They think their budget is good policy that will help the state and therefore help them politically.

Who’s right? Who knows? Budgets, taxes, and economies are complicated, and hard to predict. No, make that impossible to predict. If this Democratic budget/tax package becomes law, it could perk up the state’s economy. Or it could tamp it down.

Or – and this comes close to being a prediction – it could do neither of the above, at least not to an extent that would be countable, much less verifiable. The package is simply not that  far-reaching. It raises taxes on some people, but not by much. It reduces taxes for more people, but not by much. It cuts spending on many programs, especially in health care and other human services,  enough to degrade the quality of life of the beneficiaries of those programs, but probably not enough to have an economic impact.

Don’t expect either side to allow these mere realities to inhibit their rhetoric. And remember this about budget and tax debates: The competing claims by politicians on both sides can be factually accurate even if they seem to be mutually exclusive.

Thus Douglas claims the Democratic plan raises taxes and increases spending. It does. The Democrats claim their budget reduces taxes and cuts spending. It does.

A budget can both cut and increase spending when some spending formulas are reduced and some programs cut back, but the total dollar amount spent goes up. In this case, the budget calls for spending five percent less than the state is spending this fiscal year from its own sources and from the usual aid it gets from the Federal Government. But then came the Stimulus, or American recovery and Reinvestment Act to be formal. Throw that money into the mix, and the FY2010 budget is higher than this year’s by roughly 3.5 percent.

Obviously, whether one describes this as fiscal responsibility or, as Douglas did, “unsustainable,” depends more on political position than on dispassionate analysis of the evidence.

The same is true of taxes. As Smith wrote in yesterday’s Burlington Free Press, taxes on most people who earn less than $250,00 a year will probably go down. Well, if they earn less than $250,00 a year, don’t smoke or drink (at least not much) and don’t get their television reception via satellite. But when Douglas says that taxes are going up, he’s right, too. Everybody’s income tax rates will go down, but taxpayers will no longer be able to deduct their state income tax payments from their state taxable income, and more capital gains income will become taxable. Add it all up and the state will collect more from its citizens next year under this Democratic plan.

The burden of the (slightly) higher taxes will fall on the wealthy. Their tax rates would go down, too, but they take the biggest state income tax deductions (though they’ll then get a bigger federal income tax deduction), and they tend to have lots of capital gains income. Heavy smokers and drinkers will pay more, too. Almost everyone else will pay less, possibly leading them to increase consumption and therefore help the state’s economy. The wealthy whose tax bills go up are more likely to reduce their savings than their consumption, so that won’t hurt the economy.

But suppose they move out of the state. Douglas did not mention this in his letter to Shumlin and Smith but in the past he and his associates have worried that Vermont’s relatively progressive income tax system inspires some wealthy taxpayers to move elsewhere, taking their job-creating capital with them.

No doubt some might. Just yesterday came word that billionaire Thomas Golisano is leaving New York, which is raising taxes on the wealthy, and moving to Florida, which has no personal income tax (though its economy is in much worse shape than either New York’s or Vermont’s).

But even for a billionaire, Golisano is rather an eccentric fellow who has thrice run for governor as an independent, financing his own campaigns that he had no hope of winning, accomplishing little except the enrichment of some lucky political consultants. By and large, the evidence does not indicate that many rich people move from one state to another because of taxes.

If the economics of the tax and budget dispute are murky, the politics is not. Another veto override would be a political disaster for the Governor. In and of itself, it would not be fatal. Governors have recovered from similar setbacks. But it would weaken him severely. And there is little reason to believe that the results of the Democratic package would be some kind of statewide economic disaster that would be evident by next election day.

That’s why it’s still possible that the detailed budget plan he said he would announce tomorrow might just be more conciliatory than he has indicated. So far, Douglas has talked tough. He even told the Democratic leaders that he doubted they’d like his proposal. He’s come across like a guy spoiling for a fight.

But it’s a fight he really can’t afford to lose. Facing the loss, he could just decide a little more negotiation wouldn’t be such a bad idea after all.

Today’s exercise was supposed to be about something else altogether. But let’s get real. Yesterday was a historic day in this state, and the event must be noted.

Furthermore, the politics of it have to be discussed. On the assumption that they won’t be elsewhere – at least not very much, political journalism being something of a lost art in hereabouts-they will be here.

Obviously, the big political loser is Gov. Jim Douglas. The Legislature overrode his veto. It had never done that before. It had not overridden any governor’s veto since 1990, when it overrode one of Gov. Madeleine Kunin’s.

Douglas should get a little credit here. By and large, he handled this same-sex marriage issue without losing his cool or his dignity. He said he was against it, but he didn’t revile the proposal or attack its supporters . Nor, apparently, did he lobby the six Republican House members who voted for same sex marriage and then voted to override his veto. Had he done so, he might have won.

But he also might have won had he not announced on March 25 that he would veto the bill. The pre-emptive strike seemed to make sense at the time. The conventional wisdom (shared here, it must be acknowledged) was that it was enough to scuttle the bill, which was unlikely to attract the 100 House votes needed to override the veto. The 95 votes that passed the bill last week only validated that judgment. Why would a lawmaker who voted against a bill then vote to override a governor’s veto of it?

Maybe because by announcing his plan to veto before the vote was taken, the governor made himself the issue.

Not, in this case, himself instead of the legislation; but himself in addition to it.

Douglas remains reasonably popular among the electorate, but less so among the Democratic majorities in the Legislature. There’s no big mystery here. He keeps beating them. They want to beat him back. That had to motivate the handful of Democrats who voted against the bill last week but for the override yesterday. None of them said in so many words that they voted to override so they could stick it to the Gov. They didn’t have to.

If Douglas is the big loser, Senate President Pro Tem Peter Shumlin and (especially) House Speaker Shap Smith are the big winners. Shumlin, with that immense Democratic majority in the Senate, had the easier time of it. Smith had to charm and cajole to the very end, and on an issue that’s hard to sell via standard political rhetoric or appeals to party loyalty.

Vermont legislative leaders don’t have much clout. In bigger states, the House Speaker can threaten to move a member out of his or her fancy office or remove members from their legislative staffs. Here, lawmakers have no offices and no staffs. The leader can hint that the members’ pet bills will have a better chance of passage if said member cooperates on this vote. But it’s a little late for that this year; most of the committee work is done. Smith probably had to round up those last votes by pure persuasion, or perhaps by asking for a personal favor.

Either way, he looks awfully good this morning.

Speaking of the morning, and the cold, sober light it often shines on the residue of last evening’s joys, here’s a small reality check for the celebrators: gays and lesbians in Vermont do not have full marriage equality, and won’t when the law takes effect September 1.

That’s because one line in Douglas’s veto message is correct: “Regardless of whether the term marriage is applied, federal benefits will still be denied to same sex couples in Vermont.”

Most states won’t recognize Vermont’s same-sex marriages, either. Real marriage equality will have to await nationwide marriage equality.

With one caveat, the governor was also correct when he pointed out that  Vermont’s civil union law “afforded the same rights, and benefits of marriage to same sex couples.”  When it comes to the specific, material, financial, legal privileges of marriage – buying and inheriting property, adopting children, caring for the sick, etc. – the news law provides nothing the old one did not. The new equality is “only” personal, emotional, psychological.

Hence the caveat. In marriages, those are pretty big “onlies.”

Inevitably in the aftermath of the vote, advocates on both sides warned that some of their opponents would be wiped out in the next election. Perhaps they will. Democrats are bound to lose a few seats of their huge majorities anyway; turnout will be smaller in 2010 with no presidential election; lots of last year’s Obamaniacs who voted for Democratic legislators will stay home a year from November.

But the betting here is that, with one possible exception,  the political impact will be mild. November, 2010 is a long time from now. There will be other issues over which voters will get into one tizzie or other. Legislators, contrary to what one may have read, are not fools, at least when it comes to knowing what their constituents want. No doubt a few of the lawmakers knowingly took a risk in voting as they did. But politicians usually know how to stay in office, sometimes if they know little else. That probably applies to the Vermont Legislature.

The possible exception is the governor, and not only because, for the first time, he appeared weak. By vetoing the bill, he pleased part of his conservative base. But in this liberal state, he wins by transcending his base. A whole lot of folks who voted for him last November also voted for Barack Obama. The Democratic ticket next year will be led by Sen. Patrick Leahy, widely expected to whump whoever is foolish enough (or egomaniacal enough) to run against him.

Will some of those Democratic-leaning independents who voted Obama-Douglas in 2008, many of whom think gay marriage is just fine, vote for Leahy and the Democratic candidate for governor in 2010, in part over this issue?

Check back in 18 months.

Peter Freyne. Photo by Andrew Sawtell

Shap Smith came out swinging, and maybe not just at Gov. Jim Douglas.

Minutes into his tenure as Speaker of the Vermont House of Representatives on the Legislature’s opening day yesterday, the Morrisville Democrat  put forward a plan-and perhaps himself-as the alternative to Douglas and his economic policies, proposing a “$150 million bond-based economic recovery package to keep Vermonters working now and into the future.”

Behind which seemed to be two messages to different target audiences. To the voters, the message was: ‘I’m Franklin D. Roosevelt;  Douglas is Herbert Hoover.’

To the leaders of his own party, including the four or five thinking about running for governor next year, the message was: ‘I am Jim Douglas’s policy adversary right now. He has a plan. I have a plan. No one else has a plan.”

Bold, but risky. Politically, it’s better to be FDR than Hoover, but Smith leaves himself open to the standard Republican “tax and spend liberal” mantra, and whatever his flaws, Jim Douglas is a superb political counter-puncher.

Maybe that explains why Smith, who has the reputation of being a centrist Democrat, never mentioned Roosevelt or any Democrat. Instead, he said his plan was patterned on what Republican Gov. Richard Snelling did during a similar (if less drastic) economic downturn in 1991.

But the economic theory behind Snelling’s plan (which succeeded) was similar to the one that inspired those early New Deal programs (which also succeeed) : spend money to put people to work so they spend money to buy stuff, which will put more people to work. That’s the theory behind Smith’s plan, too.

So “tax and spend,” as Republicans prefer to call it, is not inaccurate. Smith’s “bond-based”  plan requires some kind of revenue enhancement-that would be a tax increase in English-to raise the money to pay off the bonds. Having taxed, he would then spend, on a “public works job program” that would, he said, put Vermonters to work fixing highways, shoring up bridges, improving parks, modernizing sanitation systems, and the like.

As to where the revenue would come from, Smith said one possibility was the gasoline tax hike recently proposed by Treasurer Jeb Spaulding. But the new Speaker said he was not “wedded” to that choice.

Douglas had little comment. Asked about Smith’s idea, the governor merely repeated his long-term (eternal?) opposition to any new taxes. Perhaps he’ll have more to say when in his Inaugural speech today.

For two reasons, a detailed examination the Smith plan-its workability, its political risk and potential-will have to await another day. One reason is that he provided relatively few details. But the bigger reason is that it would be impossible for anyone in the news dodge in this state not to pause now to remember Peter Freyne, who died in Burlington early this morning, far too young at 59.

This isn’t personal. I hardly knew Freyne. We had a few telephone conversations and several email exchanges, but met only once, at the press conference where Jim Jeffords announced his departure from the Republican Party. Nor was he my kind of journalist. Freyne was opinionated, partisan, and self-promoting. Like most mainstream reporters, I preferred playing it straight and staying in the background. Peter had a shtick-the  nicknames he bestowed on Vermont politicians, the  stories about the folks he met biking to and from work, the tidbits in his column about how he drank too much (until he quit altogether). I just wrote the news.

But he was a real reporter, a real News Guy, obviously high praise from the proprietor of this web site. Unlike a lot of columnists who take sides, Peter didn’t ease up on the politicians whose views he shared. If one of the liberal Democrats he preferred were acting the fool, or caught in performing ethically questionable acts, Freyne would turn on him or her with the same ferocity he’d use on the most right-wing Republican.

He may have been the best reporter in the state. He worked the phones tirelessly. He cultivated sources among the second and third-level staffers who often tell reporters what the senior officials won’t. He knew how to rummage through public records to get information that the politicians don’t announce at their press conferences.

Several years ago, one of the Republican leaders of the Legislature was holding up approval of an increase in the cigarette tax. Considering the popularity of the idea, his obstinacy  seemed unusual. It was Peter who found out and revealed that the legislator owned a convenience store just this side of the New York State line, a store that attracted cross-border customers as long as the cigarettes were  substantially cheaper on the Vermont side.

Until he retired from Seven Days last year (and, I suspect, until he died yesterday) he never lost sight of a reporter’s real obligation-to ride herd on the powerful, and never to take their word for anything.  Maybe because he’d been a Chicagoan, he was true to the rule proclaimed by Arnold Dornfield, the legendary City News Bureau editor: “If your mother says she loves you, check it out.”

Peter’s gone, but we News Guys (of either gender) who report and write the news here can still honor him by doing the job the right way.