Budget Address from Governor Douglas Part 2

[Chris Santee]

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According to recent studies, Vermont ranks first in the country for the number of non-profit organizations per capita.  This speaks well to our civic-minded culture, always ready to start a new effort to make positive change in our state. 

Many of these non-profit groups derive a significant portion of their revenue from tax dollars through state support.  At a time when we are making difficult choices within state government, it is essential to evaluate these providers to ensure they harmonize with our values and mission.

In reviewing the multitude of state grants, it is clear that many state-supported non-profits have similar, albeit not identical, goals and objectives.  For instance, there are a number of housing organizations in Vermont with similar missions that might find efficiencies through consolidation.  While mergers might not be attractive at first glance, the prospect of severely curtailed public support might make such efforts worth pursuing.  Furthermore, a review of salaries for non-profit executives reveals some with robust compensation packages well in excess of state or municipal employees managing like-sized or larger organizations. 

While the state can neither mandate consolidation between private groups nor dictate salary decisions, I ask state-funded organizations to consider such steps in the face of a protracted economic downturn.  While the reductions in the fiscal 2009 and 2010 budgets to grantees are difficult – yet still manageable – I will be looking closely at these organizations for future savings.

As a first step to share the sacrifice and encourage efficiencies, my budget proposes a 4% reduction for nearly all human service grants to achieve approximately $2 million in general fund savings.  These reductions will include programs that I have championed during my tenure. 

Further, I propose an $8.3 million property transfer tax reduction to the Vermont Housing and Conservation Board.  This proposal freezes $4.3 million in land conservation efforts for one year, while replacing the additional $4 million with federal Neighborhood Stabilization Program funds to keep affordable housing efforts on track.  When given the choice between deeper cuts to human services and temporary reductions in land conservation programs, I believe the choice is obvious.

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With so much focus on the bottom line – on crafting a compassionate budget that protects the fiscal integrity of our state – we cannot lose sight of the urgent need to grow our economy.  This afternoon, I entered this chamber with the chairs of the Senate and House economic development committees to symbolize our shared understanding that a growing economy directly impacts our bottom line – now and in the future.  New businesses, new industries and new opportunities for Vermonters expand our tax base and contribute to our ability to meet the needs of our people. 

To that end, investments in our roads, bridges, transit and rail are not only investments in the short-term employment of Vermonters, but also in the long-term potential of our economy.  That is why I recommend we increase our transportation construction budget by supplementing federal recovery funds with increased state bonding for a total of $200 million in new transportation projects over the next few years. 

By switching to an every-other-year inspection on cars, motorcycles, and trailers and adding an infrastructure investment fee to registrations as part of our triennial fee review, we can support up to $100 million in a state revenue bond – and hold Vermonters harmless from unnecessary cost increases.  When coupled with increased federal recovery money, this has the potential to create up to 4,000 jobs. 

While it is important to move quickly, from a practical perspective, we must first know the level of federal support before moving to extend state borrowing.  If federal assistance exceeds contractor capacity, we would wait to issue state bonds until such time as they could reasonably be put to use.  I look forward to working with Speaker Smith on his proposal and with this assembly’s transportation leaders to advance this important endeavor.

In addition to the supplemental investment in transportation, my budget recommends continued support of the Road to Affordability – a realignment of our transportation priorities to preserve and improve our existing infrastructure, ensuring that these assets do not deteriorate to the point where they require major reconstruction at substantial costs.  These principles will guide our decision making as we increase our transportation investment.

The Agency of Transportation budget includes a 34% increase for preventive maintenance activities.  This constitutes a 240% increase in this critical area since fiscal 2007.  In addition, the base transportation budget includes $68 million for construction of 45 interstate, state, and town highway bridges, as well as dozens of culverts.

Furthermore, as we look to expand bonding and increase transportation spending, we must hasten efforts to redirect transportation revenue for its rightful purpose.  Since taking office, I have steadily reduced the diversion of transportation funds by nearly $9 million.  This year we will further reduce that transfer by an additional $4.5 million – a significant step toward ending the raid.

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As we create jobs by strengthening our transportation infrastructure, we must harness the innovative spirit of Vermonters to create new economic opportunities.  That is why I have introduced an Economic Growth Plan to help position our state to be on the first wave of recovery.

This budget supports plans to redevelop existing buildings for affordable housing and businesses, as well as to encourage innovation and creativity with incentives for cutting edge inventions and research.  We will also continue to strengthen our signature green brand and encourage the development of more renewable energy sources, as well as reform our permitting process to uphold our cherished environmental standards and allow our state to grow and thrive.

We must build on what is so great about Vermont with initiatives that will help spur job growth and opportunities for those struggling to get by.  I welcome new ideas and proposals from all corners and look forward to working with the Legislature in a collaborative effort to get our economy back on track.

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By increasing our commitment to lifelong learning, we will invest in the economic independence of Vermonters and build a more flexible workforce.  Employment statistics are unambiguous: those who graduate from an institution of higher learning have a lower unemployment rate.  That is why I propose a 20% increase in general fund support for higher education.

At the other end of the spectrum, I propose increased support by 20% for early care and education to bring greater balance to our education continuum.  This funding will be directed through the Department for Children and Families for increased quality to ensure that more children arrive at kindergarten ready to learn and for improved access for lower income families through the child care subsidy program.

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Additionally, an investment in new and existing infrastructure throughout Vermont is critical to small businesses and the employees who depend on jobs created by these projects.  I propose a $70 million Capital Bill that focuses on the quick deployment of resources into our communities to get Vermonters back to work.  In fact, 94% of the proposed appropriations are directed toward “ready to go” projects – up from 60% last year.

To supplement our increased investment in higher education, I recommend capital appropriations of $3 million each to the Vermont State Colleges and the University of Vermont. 

To address the long overdue improvements for acute psychiatric care, I propose a capital appropriation of $500,000 for final planning, permitting and eventual construction of a secure residential recovery program located on the grounds of the Waterbury Complex.  And to realize our goal of an integrated care setting for inpatient services, I recommend an appropriation of $250,000 to continue the process for new inpatient beds at the Rutland Regional Medical Center.  These two projects are consistent with our commitment to a long term solution, and move over half of the present Vermont State Hospital population into new settings that will meet or exceed current standards of care.   

While these investments in bricks and mortar are necessary, in the 21st century economy an investment in bits and bytes is just as important.  That is why I propose a capital investment to upgrade the state’s human resource system – modernizing state government and allowing employees to spend more time serving Vermonters.  We will also begin the process of replacing our 1980’s-era Medicaid eligibility system, which is outdated and no longer meets the needs of our social safety net.  And I propose another $1 million to assist the Vermont Telecommunications Authority to reach our vision of an e-State by the end of next year.

This capital budget also supports the Clean and Clear program through a $2.4 million appropriation to the Agency of Natural Resources and a nearly $2 million appropriation to the Agency of Agriculture.  Our commitment to a healthy and vibrant natural environment is a legacy we must always honor.

Similarly, we have a duty to honor those who have sacrificed so much for us.  Therefore, I propose funds to make needed upgrades and repairs to our Vermont Veterans Home.

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Ensuring that law enforcement, families and communities have the tools they need to keep our children safe from sexual predators is a fundamental obligation of government.

Senate Bill 13 addresses our shared commitment to protecting our children – from the prevention of sexual abuse to the investigation, prosecution, and sentencing of sexual predators.  This bill is a testament to our ability to work together toward a common goal and shared responsibility.  I applaud the work of all those involved. 

A critical component of implementing this bill and providing law enforcement with the best technology available is our new crime lab.  My Administration has made this a priority and I am pleased to announce that the capital bill includes $2 million – bringing total appropriations to $15 million – for the construction phase of the lab.  We will break ground this summer with an expected completion in 2011.   

In order for Vermont to remain one of the safest states in America, this budget strongly supports our state police force and builds on our shared commitment to develop the very best investigation and prosecution response to crimes of sexual violence.  I propose appropriations to support Special Investigation Units throughout the State through additional grants and continued funding of the new troopers who are graduating from the Academy this year.   

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This is the seventh budget I have presented to the General Assembly and by far the most difficult.  There is no joy in making cuts at such a challenging time in our state’s history and I have agonized over many of the proposals in this budget. 

I understand well the consequences of our actions – we cannot pretend they will have no effect – but the implications of inaction are far worse.  If we do not make tough choices now – if we do not share the sacrifice for the common good – if we do not ask more from ourselves – then our promises will be unfulfilled and our legacy tarnished. 

In these times, all programs and services must be examined and considered – whether priorities of mine or priorities of others.  Few choices will find easy solutions, but we must not allow what is easy to take the place of what is right. 

Together, in these dark hours, we will conquer collective anxiety with shared resolve –beat back cold fear with a hope as deep as the green of a Vermont spring – and push past partisanship to serve the people in a way that honors their struggle.

Our differences pale to our common purpose.  I pledge my hand in that spirit and stand ready to work day and night with you to lead our state through this tempest.

God bless each of you and the great state of Vermont.

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