Mike Smith: Scott's courage of doing less to do more

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Mike Smith: Scott's courage of doing less to do more

Mon, 01/29/2018 - 8:54am -- tim

by Mike Smith Governor Phil Scott said in his budget speech that “it’s not bold to spend more than Vermonters can afford, or to experiment with policies our economy cannot sustain.” Often politicians tout new initiatives as bold. And often they come with a hefty price tag. By hewing to a path of fiscal restraint and frugality rather than spending more money on new proposals, Scott is trying to redefine the concept of political courage. He is also deviating from what voters typically hear from politicians in Montpelier.

Phil Scott, State of the State address, January 4, 2018. VBM photo.

Scott is saying to Vermonters that you can rely on me to be bold enough to say “no” to increases in spending when others are not.

Of course this opens up Scott to criticism that his approach to governing is unimaginative, limited and “ho-hum,” with no progressive vision or grand initiatives that will have a positive impact on Vermonters.

But Scott is making the political calculation that most Vermonters have three expectations of the state budget:

1. spend less, rather that more;

2. provide relief from taxes; and

3. introduce initiatives that expand the state’s economy.

Scott’s budget keeps state spending growth at just 2.36 percent. He has pledged no increases in taxes and fees, including the statewide property tax. He eliminates the state income tax on Social Security for low- and moderate-income Vermonters. And, he’s proposed a new approach to entice people to move to Vermont.

The governor has every reason to believe that this is what many Vermonters want to hear. Certainly in the last election voters were looking for a change in direction from the previous administration and Scott found a potent message with his affordability agenda. The message is so powerful that even Democrats are now talking about affordability, although they define it differently.

But Scott’s message also resonates because of something else that is going on in Vermont and that’s the concept of two Vermonts: Chittenden County and the rest of the state. Vermonters recognize that Chittenden County is the economic engine of the state and its economic success must be protected.

But, what’s startling to many is the size of the economic gap between Chittenden County and every other county in Vermont. Succinctly, 13 Vermont counties are still struggling to regain jobs and real estate values lost in the Great Recession while Chittenden County is experiencing robust growth in both of those areas, according to the most recent state economic revenue forecast. And most of Vermont’s job growth is in lower wage jobs.

There’s still much economic angst in our state, even in Chittenden County, and Scott recognizes that fact.

But there is also danger for the governor in his budget. The education fund is projected to have an $80 million deficit next fiscal year and yet Scott’s budget proposes no concrete solutions to resolve the gap. Without a solution, statewide property taxes will go up 7 percent. Scott has said he will not support any increase in taxes. Right now “ideas” from the administration are floating around the Legislature. The education fund deficit looms as local school boards finish their budgets and has yet to be addressed by lawmakers or the governor.

Perhaps stung by criticism that he was too heavy-handed in presenting education cost-cutting plans to the Legislature last year, this year the governor seems to be trying a different approach by allowing lawmakers to discover their own solutions. The hope is that the Scott administration and legislators will work on an agreement without the rancor and acrimony of the last legislation session.

But this approach has downsides. First, this strategy only works if the Legislature accepts the premise that there will be no increase in the statewide property tax. So far, legislative leaders have made no such pledge, although it would be difficult to advocate for property tax increases, especially in an election year.

Secondly, part of being bold is finding solutions to complex problems. Scott needs to be careful not to let this uncertainty over deficit solutions to linger for too long. Otherwise, Vermonters will become increasingly concerned over the lack of a plan.

The budget speech probably won’t be the last time that the governor will attempt to redefine boldness. It’s a concept that likely will re-emerge in talking point during future debates with the Legislature and perhaps even on the campaign trail this fall. If finessed just right, Scott’s brand of boldness will be another politically potent message.

Mike Smith is a regular columnist for vermontbiz.com, Vermont Business Magazine and VTDigger. He hosts the radio program “Open Mike with Mike Smith” on WDEV 550 AM and 96.1, 96.5, 98.3 and 101.9 FM and is a political analyst for WCAX-TV and WVMT radio. He was the secretary of administration and secretary of human services under former Governor Jim Douglas.