Editorial: Fiscal woes demand creative fix

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Vermont's financial problems are serious and cannot be fixed by level-funding state budgets for a year, or borrowing from the state "rainy day fund. In fact, those strategies might have made things worse.

And we're going to find out just how deeply those problems run this coming fiscal year, when the state property tax bills that fund our K-12 education system arrive.

Unless the state can find millions of dollars in cuts, state leaders are warning, prepare for the state property tax rate to jump by between 7 and 9 cents per $100 of valuation.

Part of the problem is that the state, in setting the current spending plan, used $38 million in surplus funds and $9 million in reserves and clawed back $8.5 million from school districts in the last legislative session. That doesn't include the surplus funds cities and towns used to cover the cuts.

That money is gone, never to return.

Even if school districts "level-fund" their budgets (which actually guarantees layoffs) or hold the line to inflation, projected at 2.9 percent, that won't be enough to stave off tax increases. Not with the likelihood that teacher health care costs will spike by 10 to 17 percent.

It could get even worse, depending on what the Republican Congressional "leadership" does to federal education and healthcare funding.

State education secretary Rebecca Holcombe is "increasingly concerned" about the state's financial situation. And state Rep. David Sharpe, D-Bristol, is predicting that the Vermont Department of Tax's December estimate of next year's property tax is "going to be ugly."

If you're like most folks, then you've seen this movie before.

Sure, you can put off repairs to your house or your car for a while, while you hopefully save money for repairs. But something else always seems to come up, so you put it off some more. Once the problem can't be ignored any longer, you realize the cost is a good deal greater than it would have been if you'd acted right away.

Vermont, your check engine light is on.

This winter in Montpelier, the pressure is going to come from all sides, and we don't envy the task in front of the Legislature or the Scott administration.

And by the way, 2018 is an election year.

Vermont cannot and should not tax and spend its way out of this mess. And cuts to education spending carry a human cost — layoffs and lost investment in our future — that many are not willing to pay.

So what's the solution?

We have a hunch what won't work: Business as usual. It got us here, and we have run out of road down which to kick that particular can. It's time to try something other than the knee-jerk partisan ideologies of "Cut spending!" on one side versus "Raise taxes!" on the other.

To our ears and eyes, that might as well be the "Less filling!" vs. "Tastes great!" debate we used to see on TV beer commercials. Leadership does not in any way resemble mass-produced light beer in cans.

Here's one possibility: Earlier this year, in a column in our sister newspaper, the Manchester Journal, Cynthia Browning (D-Arlington) suggested that backing current use and income sensitivity out of the education fund and back to the general fund and income tax, respectively, could lower the education fund property tax.

Would it work? We don't know.

But we do know that innovation, creativity and cooperation are better choices than the same tired partisan playbook. We hope the Legislature and Gov. Scott, having shown this past year that they can compromise for the greater good, will look at this problem through that mindset, rather than retreating to familiar ground.

Vermont's future is riding on it.


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