Douglas Budget Aims to Give Vermont Economic Boost

Author: Megan O'Keefe

In a speech delivered before Vermont's General Assembly on Jan. 20, Governor James Douglas '72 presented the state budget plan that he hopes will save Vermont from what he calls "the worst budget crisis since World War II."
Douglas began with a thorough look at Vermont's current financial situation, listing the numerous challenges Vermonters will face in the coming year. "A prolonged economic slowdown caused by global recession and Vermont's own competitive disadvantages has resulted in hundreds of businesses laying off workers or going bankrupt, closing their doors and casting thousands onto the unemployment rolls. As a result, the state has lost millions in tax revenue for funding important programs," he said.
Despite these early strains of pessimism, Douglas' speech laid the groundwork for an aggressive set of economic initiatives designed to return Vermont to prosperity. Douglas warned, however, that the budget would call for sacrifice. He explained, "At a time when our economy is fragile and Vermonters are having to make do with less, state government must, as well. Given the difficult choices this budget presents, some may be inclined to take the easy road of a tax increase in order to avoid addressing the difficult structural issues affecting state government." Douglas' budget calls not for higher taxes, "which is something Vermonters could not afford," but for reduced and reformed government spending. "We should not," he affirmed, "dig deeper into the pockets of struggling taxpayers."
Douglas proposed a $2.3 billion state spending plan for the 2004 fiscal year, representing a 1.7 percent increase over the current year. "This is a balanced budget - balanced on the bottom line and balanced in its call for sacrifice," Douglas said.

Economic Initiatives

Initiatives designed to provide economic assistance to entrepreneurs, to encourage companies to do business in Vermont and to create jobs for hundreds of Vermonters were chief among Douglas' plans for reviving the state's economy. "Today, I am announcing a $106.8 million job creation and economic security package," Douglas said. The program, the most significant investment in entrepreneurial business and employment in recent state history, is intended to create thousands of new jobs and save thousands more. Douglas said he intends to provide additional funding of $1.2 million to the Agency of Commerce and Community Development "to recruit new business to Vermont, market Vermont's tourism industry and train our workers for 21st century job opportunities." The jobs program will also provide over $85 million dollars in low interest loans to entrepreneurs and small businesses struggling to expand.

Farm Assistance

Douglas also announced a financial commitment to Vermont's farmers with a $15 million financing project orchestrated by the Vermont Agricultural Credit Association. A move to eliminate statewide property tax on all farm and forest land and agricultural buildings, as proposed by Douglas, would provide further aid to farmers. Douglas affirmed, "Too often when we speak of expanding opportunity, we forget about a group of people who represent the best of Vermont in every way. Vermont's farmers are facing especially troubled times. Many do not have the resources they need to upgrade technology, learn new management skills and improve their operations to make their farms profitable."
The $15 million provided by the Vermont Economic Development Authority would come from a restructuring of the association's debt, thereby requiring no further appropriation of funds. Douglas drew great praise from a number of key politicians for his emphasis on assisting farmers. Steve Kerr, Vermont's Agriculture Commissioner, lauded Douglas, saying, "Jim Douglas just put his money where his mouth is. I don't think any governor could have, in fewer words or more words, done for Vermont agriculture as Jim Douglas just did."

Property Taxes and
Educational Funding

Much controversy has arisen over Douglas' plan to decrease property taxes statewide from $1.10 per acre to $1.07. This property tax cut, along with the elimination of farm and forest property taxes, would be financed by surplus money in the education fund. Democrats voiced concern that the statewide tax break would primarily benefit residents of property-wealthy towns, at the expense of the many property-poor towns of Addison County. Opponents of the plan urge Douglas to instead increase per-pupil spending on education provided to school districts as a block grant under Act 60. Senator Gerry Gossens, D-Salisbury, responded, "If any school funding program is going to work, the state will have to pay its fair share in good times and bad times, and these are bad times." Douglas said he would listen to alternative ideas including using the surplus to increase per-pupil block grants.

Powerball Lottery

Douglas' plan to bring the Powerball lottery to Vermont was met with skepticism. While Douglas believes the lottery will generate revenue for education spending, opponents say that Powerball will encourage gambling amongst the Vermonters who can least afford it. The governor contends, "It's clear to me that we're losing money by not participating in a multi-state lottery game. Vermonters are buying these tickets, and they're going out of state to do it." Opponents such as Rep. Steve Maier, D-Middlebury, responded negatively to the proposal. "I'm not in favor of Powerball," he said. "I'm quite convinced it's not the type of thing we should be doing."

Infrastructure Improvements

Douglas also promoted funding to upgrade water and pollution control facilities, parks and dam maintenance. He endorsed spending on construction of a new Rutland Court House, new state police barracks in Middlebury and Pittsford and $600,000 in new funds for police and fire services. A half a million dollars would also be spent on upgrading antiquated health and public safety laboratory services. Finally, $3 million would be allocated for transportation projects, including road and bridge construction.