(01/03) In November, Delaware’s former Governor Pete Dupont attended a conference in South Burlington and spoke about the fiscal crisis facing him when he was first elected in 1980. He said it was more severe than Vermont’s current crisis and through good management and responsible fiscal policy, Delaware is stronger today.
Dupont implemented a series of tax and spending cuts to achieve his objective. In fact, in his 8 years in office, his budget was level funded and that forced innovation in the delivery of state services. He also implemented a series of deregulation steps that spurred job growth and increased state revenue to fund further tax cuts. The Governor concluded by saying a “good social program is a job.”
With the threat of more economic woes before us, going to Montpelier this year is equivalent to a kid going into a toy store with no money. However, there is some good news in that everyone is talking about working on an agenda to make government more efficient and effective, create quality jobs, improve our business climate and reduce taxes, all of which will make Vermont stronger.
Since 1990, Vermont’s total state spending skyrocketed from $1.1B to over $2.37B when you consider all revenue sources. To be fair, you have to account for population growth and inflation since more people means more demands on government services. However, when you factor in both population and inflation, you still have excessive spending of $559 million.
Critics would argue that $559M is only $905 per person but that’s $3,623 per family of four and that’s a big deal. Though most is paid by federal taxes, Vermont is more dependant on federal support than most states to fund a government bureaucracy which is also bigger on a proportional basis than most states. We can’t afford that level of spending.
By implementing a conservative fiscal strategy, Vermont can get its spending under control, restore its reserves, become leaner, more effective and allow business to be globally competitive. A few good reforms will give us dramatic comparative advantage that will generate a dynamic economy, high paying jobs and greater opportunity for all Vermonters like what happened in Delaware under Governor Dupont’s leadership.
Where do we start? We could adopt Dupont’s fiscal policy to level fund state spending but it takes a great deal of discipline and courage to implement that plan. However, Colorado’s fiscal policy could be more acceptable to Vermonters. A constitutional amendment limits growth to the inflation rate plus a percent change in population from the prior year. For example, if Vermont’s population increased 1% and inflation in the previous year was 3%, the increase in total spending would be limited to 4%.
Governor Dean’s administration limited state spending to an index based on gross state domestic product growth which averaged around 4% a year. However, when you look at total spending using federal and special revenue, it averaged 6% a year.
Vermont should also begin the process to modernize state government by using information systems and data base management that’s compatible between agencies and, where needed, to be interactive with constituents. This will improve the delivery of services in a timely basis and stimulate more e-commerce in Vermont
Governor Reagan once said, “I believe that the government is the problem, not the answer.” We should look at all our government services, functions, programs and related activities to insure that appropriate levels and quality of service are rendered in the most cost efficient manner. The analysis should determine if it’s a core responsibility of government. If it is, then one of the following should apply 1) privatize the activity in whole or in part; 2) eliminate the activity; 3) retain it in its current form; or 4) modify the activity, but retain it in state government.
Some bureaucrats operate under the premise that if you can’t tax it, you regulate it. That’s why all unnecessary government regulations should be eliminated. In doing so, Vermont’s business climate will be strengthened and that’s an important business site location factor since capital and equipment can easily be transferable across state, national and international borders.
Governor Dupont indicated tough fiscal times create an opportunity to eliminate waste and improve efficiencies, something that isn’t a priority in government when there’s an abundance of cash. Vermont should use this downturn as an opportunity to make its delivery of services better and more affordable to taxpayers.
Thank you for your calls and notes. I can be reached at 658-3975 (home), 1-800-322-5616 or 228-2228 (State House) and via e-mail.
South Burlington