- Associated Press - Sunday, December 6, 2015

MONTPELIER, Vt. (AP) - As Vermont begins at least its ninth straight budget cycle with projected revenues falling short of expected needs, alternative ways of looking at the state’s finances and the performance of its underlying economy are beginning to get some attention.

“People say we have these structural budget problems and then we continue to do things the same way,” said Sen. Anthony Pollina, D-Washington. Lawmakers need to be “open-minded enough to admit that what we have been doing is not working,” he said.

Vermont in recent years has passed provisions into law calling on state policymakers to use two new tools to shape fiscal policy, neither of which has been brought to bear much so far. They are:

- A “current services budget,” in which the governor’s administration, when it proposes a budget to the Legislature, provides an accounting of what services state government performs now and how much full funding of them would cost, and

- A “genuine progress indicator,” in contrast with the gross state product measure of the sale of goods and services. The GPI is a broader measure factoring in the costs of various types of pollution, loss of forest land and other environmental damage, and social costs like lost leisure time and commuting.

The current services budget was the topic of a meeting this past week of Vermont Interfaith Action, a group of religious leaders who have been pushing what they call a “moral economy” agenda.

“Currently the state government employs a technique that I think is much better characterized as managing to the money,” said Rev. Earl Kooperkamp, of the Church of the Good Shepherd in Barre. “The budgeting process simply starts with the funds that are available and then allocates those funds.”

A current services budget would detail “the real cost of providing all of the public services that the state has said through laws and policies it is committed to provide,” he added.

The faith group’s meeting was billed as a celebration of the fact that a top aide to Gov. Peter Shumlin, Administration Secretary Justin Johnson, had committed to the group that the administration would prepare a current services budget to go along with the traditional budget proposal the governor makes to lawmakers each January.

Johnson said administration officials have always gone through an exercise in which they try to match projected expenses with expected revenues. The expense side of the equation essentially is a current services budget, he said.

Johnson said the ideas behind the GPI make sense to him and that the state likely will move in the direction of a broader view of economic performance over time.

He offered the example of flooding from 2011’s Tropical Storm Irene, which caused extensive damage around the state.

“From a gross state product point of view Irene looks good on paper because we spent all kinds of money” rebuilding roads and bridges and making other repairs. But he added, “I think a lot of people who experienced Irene would not say it was the best thing that ever happened.”

Rep. Mitzi Johnson, the Democratic chairwoman of the House Appropriations Committee, said breaking out of the current pattern of budget development would be “extremely difficult.”

The state has a goal of “living with dignity and independence if a person has a developmental disability. Does that mean they should all have 10 hours a week of supported employment, or does the law imply they should have 40?” Johnson asked.

On the genuine progress indicator, Jon Erickson of the Gund Institute for Ecological Economics at the University of Vermont told a meeting of lawmakers he had been working with state officials to get them to take “a broader view … of how well the economy is contributing to the well-being of the average Vermonter.”

While both the GPI and current services budget ideas are gaining some interest and are acknowledged in state law, it’s not clear - at least not yet - they’ve moved anywhere near the center of deliberations at the Statehouse.

Lawmakers got a traditional budget briefing from administration officials and a consulting economist in the House chamber on Tuesday, while Erickson’s testimony on the GPI came at the end of the day in a separate hearing room downstairs.

Pollina said “that shows how difficult it is to inject new ideas into a traditional budget process even if the budget process isn’t working.”

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