Challenges for Change: Cuts Begin Before Budget Process Plays Out

The 2010 legislative session began with legislative leaders and the governor announcing they had agreed on the recommendations made by a Joint Legislative Government Accountability Committee study done over the interim. The study outlines a list of “challenges” intended to improve government services while reducing state spending by $38 million and reducing property tax pressure by $12 million in FY 2011.

The Challenges for Change: Results for Vermonters report suggests savings can come from a number of reforms impacting the fields of education, human services, commerce and community development, and general government.

Throughout the last week, legislative committees spent much of their time working on Challenges for Change legislation to implement the recommendations issued in this report. The bill gives the administration four weeks after the enactment of the legislation to redesign state government, including the Agency of Human Services and the Department of Education – with 5% less funds in FY 2010 and 10% less in FY 2011.

Short on specifics, the draft legislation does not prescribe how the agencies should go about redesigning themselves while maintaining their ability to deliver services. Instead, legislative committees are charged with developing a set of outcomes that they want each “challenged” state agency within their purview to accomplish given the reduced resources. Each committee has a very short window of time to develop these outcomes – Leadership has set a goal of having the bill ready for the governor’s signature by February 19th.

The aim of this legislation is to make government more efficient while delivering better results for Vermonters. No one can argue with that goal.

But let’s be clear. This bill means that agencies are having their budgets cut by 5 percent this year – before the normal budget process plays out, and on top of two years of cuts enacted in the FY ’09 and ‘10 budgets.

The governor’s budget indicates that even more cuts are proposed – up to $53 million in human services alone. If Challenges does all it can to make government more efficient, any further budget reductions will cut straight to the marrow of our public systems, attacking the public structures that make Vermont a special place to live.

Challenges legislation will likely pass, and soon. And government may be more efficient as a result. But with over $100 million left in budget deficits, there is no way we can continue to cut our way out of this. Only new revenue – such as rainy day funds, federal funds, temporary tax increases, and borrowing – can fill a hole that big.

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