McClaughry: The 2016 Legislature — a post-mortem
The 2016 legislative session is now history, and it's worthwhile to assess its production. My criteria include preserving fiscal responsibility, advancing liberty, limiting government, and thwarting various hungry special interests. The basic facts are readily available from the thorough reporting by VTDigger.org
First, the Legislature managed to balance the FY2017 General Fund budget, once again by raising taxes and fees by $28 million. Wary of any obvious tax and fee increases in election year, the tax committees found a convenient target — the mutual fund industry, almost entirely inhabited by out of staters. Hitting it up for $20.8 million closed most of the gap, without arousing Vermont taxpayers.
Gov. Shumlin had mounted a campaign to tax 1,200 doctors and dentists in independent practice, to extract more Medicaid money from Washington. That didn't fly. Nor did a House-proposed increase in the employer tax to finance Medicaid, or a bank franchise tax increase. The legislature also faithfully transferred the formula-required $306 million to the Education Fund.
Perhaps most importantly, the legislature backed off the VPIRG proposal to combat "climate change" by levying a hefty carbon tax on home heating oil, gasoline, diesel, natural gas and propane. Despite a long list of endorsers of the idea — the usual suspects — many legislators (including some Democrats) didn't want to go into an election having voted to extract $500 million from Vermont consumers in its tenth year.
The carbon tax proposal promised to return 90 percent of the revenues to selected taxpayers after the renewable energy and weatherization interests skimmed off the top ten percent as a "societal benefit." This unbelievable promise is reminiscent of President Obama's promise, "if you like your health insurance plan, you can keep it."
The VPIRG-led "Energy Independent Vermont" coalition got more of its nose into the tent by getting an increase in gross fuel receipts taxes to raise another $2.9 million for "weatherization." The coalition — now demanding "pollution pricing," the latest euphemism for "carbon tax" — promises to come roaring back in 2017, so we haven't heard the last of this bad idea.
One brave little step was the privatizing of the risk management office that determines workers compensation claims. This will save $500,000. How this got through over the frantic opposition of the Vermont State Employees Association is just short of miraculous. It is a welcome exception to the VSEA maxim that "no matter how much privatization might save the taxpayers, none of it is ever acceptable."
One of Gov. Shumlin's final bright ideas was to have state government open a college savings account for all children born in Vermont, rich and poor alike, and find $250 to fund each of them. The argument: "Why should this responsibility be left to mom and dad, when our state government is ready and eager to hit up taxpayers for $250 a pop to get things moving?" The legislators, to their credit, didn't buy it.
The solons passed an energy siting bill that required towns upset by wind and solar impacts to buy into the state's planning to force us to achieve "90 percent renewable energy by 2050." In return for hugging the octopus, a concerned town would win "substantial deference" for its town plan before the pro-renewable and lawyer-intensive Public Service Board. The $300,000 promised to towns to adopt state-approved plans somehow disappeared from the appropriations bill. Passage of the siting bill will prove to be an illusory triumph for towns and citizens.
The 2015 education consolidation bill (Act 46) seriously threatens to exterminate school choice in Vermont's 90 tuition towns. The education establishment, led in the House by Speaker Shap Smith and Education Chair David Sharpe, stifled efforts by (mostly) Republicans to find a way to rescue parental choice within the new Unified Districts. Both parties have now accepted "strict cost containment" — holding down school property tax rates by manipulating state caps and penalties until all school districts toe the state's line. This is precisely what critics of Act 60 in 1997 said would happen. Farewell, local control.
The health care "reform" bill groped about looking for a way to solve the chronic failure called Vermont Health Connect, awarded a further overdose of regulatory power to the Green Mountain Care Board, and shelled out another $100,000 to pay for a recurring study of single payer on the installment plan.
A bill to make life easier and more predictable for independent contractors — reported 11-0 from the House Commerce and Economic Development Committee — disappeared due to the usual union opposition.
Two small bright spots: the Legislature voted to protect the Vermont Association of Snow Travelers from negligence claims arising from accidents on their snowmobile trails. Also, it turned its back on a bunch of gun control bills despite lavish lobbying by the Bloomberg-financed gun control lobby.
From the standpoint of the past five years, the money committees commendably produced a balanced budget with only a small infusion of new tax dollars. From the standpoint of what needs to be done — to rationalize health care, expand parental choice in education, and get the renewable industrial complex's nose out of the trough — well, there's always next year, with a new governor.
John McClaughry is vice president of the Ethan Allen Institute (www.ethanallen.org).
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