The Real “Conspiracy of Silence”

by Robert Maynard

It looks like we are finally getting to the point here in Vermont where the political class is “running out of other people’s money”, to paraphrase Margaret Thatcher.  A recent article by the Vermont Digger was entitled “A conspiracy of silence.”  The supposed conspiracy is the unwillingness of our current political leadership to raise taxes to cover the demands of the various issue oriented activists.  Here is how the demands were described:

One by one they came, advocates for Vermont’s least powerful – the poor, the frail, the elderly, the homeless, or some combination of all four – to tell the House Appropriations Committee Tuesday that the poor, the frail, the elderly, and the homeless needed just a little more money from the state.

Not one of them said anything about where that money could be found.

 The article tried to make the case that we have already went as far as we can in cutting spening:

The state can always cut spending. It can reduce or even eliminate programs. No doubt some Vermonters would be pleased to see them go. But all those programs are there for a reason, all have a constituency, and some of them have already been cut so deeply that they can barely function.

As Martha Heath said, “this is the seventh straight year” Vermont has faced a budget crunch and has responded largely by cutting spending.

In 2007, state government had more than 8,000 employees, said Mark Mitchell, president of the Vermont State Employees Association. Now, though the state as a whole is larger and richer, its government is down to about 6,700 employees, he said, though that does not count a few hundred temporary workers now on the payroll.

The readers of the article were not buying this argument and took issue with some of the “facts” cited.  First, one reader disputed the claim of a drop in government employees: “Gee, downloading state salaries and compensation for 2012, there are over 12,000 entries for state employees, be it part-time and full time entries. I question whether State government has actually gotten smaller or BIGGER?”  Then there was Tom Pelham, of the Campaign for Vermont, disputing the claim that Vermont has cut spending “for the seventh straight year.”

If you follow this link to the Governor’s budget summary, on page 17 you’ll find a chart that profiles the state budget going back to 2010.

The pertinent line is “Total Funds before Dedicated Dollars”. This chart shows that the state budget, assuming the Governor’s recommendations, will increase by $558 million, or 12%, since 2010. During this period, there was only one down year, 2012, and that was attributable to the phase-out of “one-time” stimulus funds. Over this period, state funds derived mostly from taxes and fees on Vermonters, grew by $545 million, or 19% from $2.832 billion to $3.377 billion.

Further, if you go here, you will find the same chart format that includes fiscal 2008 and thus the starting point of the 7 years referenced in your article. Please note, again assuming the Governor’s recommended 2014 budget, that from 2008 the state budget will have grown by 27.7% or $1.135 billion, from $4.103 billion to $5.238 billion. State (non-federal) funds contributing to this growth amount to $493 billion.

How one can cast the above budget profile as “cutting spending” or not make reference to the additional millions in taxes and fees contributed by Vermonters is a wonder to behold…or maybe the more relevant “conspiracy of silence”.

Further, in addition to cutting spending or raising taxes, there is one other option state government leaders can pursue – reforms. Both the legislature and executive branches started down this road in 2009 and 2010 with “Challenges for Change” and “Tiger Team” efforts. But, with federal stimulus funds in hand and political resistance from special interests to changes in the status quo, the fork in the road leading to reforms was not taken, and we suffer the consequences today. You can read more about that here.

A major reform needed here in Vermont is to re-examine the role that we expect government to play in a free society.  The article unintentionally stumbled onto a reason why we should question the current path of continuously expanding the state government’s role: “Thanks to information technology, in many enterprises fewer employees can do just as much work, if not more. By and large, state government is not one of those enterprises. Increased productivity does not improve the performance of social services or environmental enforcement.”  That is a BIG reason why we should consider reducing the role of state government. Government bureaucracies are inherently inefficient because governments can extract their revenue by force whether the people are satisfied with its services or not.  We COULD deliver better productivity in the performance of such services if we moved them out of the hands of the bureaucratic state apparatus and the politics that drive it.