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Tax and Spin: Shumlin Resets His Child-Care Pitch 

Fair Game

After botching the initial rollout of his budget plan last month, Gov. Peter Shumlin is trying to hit the reset button.

And this time, he’s going for the mommies.

Standing at the front of a preschool classroom at Burlington’s Trinity Children’s Center on Monday, the governor sought to spotlight his family-friendly proposal to invest $17 million in childcare subsidies.

Surrounded by three working mothers, an indoor playground and plenty of construction paper, Shummy deployed his soothing, nice-guy voice to make his case for what he kept calling a “compassionate” plan.

Rather than taking the proverbial gloves off, Shummy and his entourage had to take their not-so-proverbial shoes off to comply with classroom dress code.

“I just gotta say from my heart and I suspect Vermonters agree with me: This is about our children. It’s also about our moms and our parents,” Shumlin said of his plan to cut childcare costs for up to 6000 families already receiving state support and extend access to another 900.

“I know it’s been suggested by some that our proposal isn’t compassionate,” he continued. “I would argue there’s no greater compassion that we can have as Vermonters than taking care of all of our children and giving them all a strong start.”

Shummy’s softer press offensive follows last month’s rocky rollout of what he called a “package to prosperity.” Critics on the left characterized it as a plan to stick it to the poor.

It all began with the governor’s second inaugural address, during which Shumlin pitched paying for the expanded childcare subsidies by cutting $17 million from the state’s $26 million match to the federal Earned Income Tax Credit. Last year, that program provided some 44,000 working Vermonters with a tax break or lump-sum check.

Progressives pounced. Republicans panned the plan. And, most troubling for a governor facing a Democrat-dominated legislature, House Speaker Shap Smith (D-Morrisville) said he had “strong” reservations about the funding scheme.

Nevertheless, Shumlin doubled down on the plan two weeks later in his budget address to the legislature. Further inflaming liberals, he used Reagan-esque, welfare-slamming language to propose capping Reach Up benefits to the most vulnerable Vermonters at three consecutive — and five total — years.

That, he said, would save the state $6 million and, better yet, force those bums to get a damn job.

Legislators weren’t exactly overjoyed.

“I’m not sure where these jobs are these folks are going to get,” said Rep. Ann Pugh (D-South Burlington), who chairs the House Human Services Committee.

“Quite frankly, I think many people have viewed the proposal with a great deal of skepticism,” Smith said this week of Shumlin’s overall budget plan. “I do think the way the childcare subsidy is proposed to be paid for has colored people’s view of a whole suite of proposals.”

In recent weeks, Smith and Sen. Tim Ashe (D/P-Burlington), who chairs the Senate Finance Committee, have been talking up decoupling elements of Shumlin’s proposal and considering them separately.

“There is a tremendous hesitance to touch the Earned Income Tax Credit, which is the single most effective anti-poverty measure in U.S. history,” Ashe said. “To link the childcare subsidy with a two-thirds deletion of the EITC, I think, are two unrelated policy questions.”

Not in Shumlin’s view. Perhaps in reaction to the threat of legislative meddling, Shumlin said last week, “I feel very strongly that my education ‘package for prosperity’ is just that: It’s a package. And we need to pass every part of the package.”

He added, “If you pull out one leg from under it, the whole thing falls apart.”

Smith’s reaction?

“I don’t think that kind of language is helpful,” the speaker said. I think the legislative process is always about give and take. It’s not about take and take.”

Why is Shumlin so adamantly opposed to finding another funding mechanism for his otherwise popular childcare subsidy expansion?

“Talking about alternatives sounds great until you try and go find them,” he said Monday. “There isn’t new money out there to be spent.”

That’s coming from a guy who just two weeks ago managed to find $17 million in new revenue by taxing something most people had never heard of: those “break-open” tickets sold at the local Elks Club and American Legion post.

Asked if he had any other tricks up his sleeve, Shumlin said, “I would suggest that if they were there, we would have proposed them.”

Jack Hoffman of the Public Assets Institute, a Montpelier think tank, said he plans to offer some alternatives.

“I think there are other tax expenditures we could look at reducing that would hit a different group of people than cutting the Earned Income Tax Credit, which is taking money from the poor to give to the poor,” he said.

In Hoffman’s view, “The cost of [expanded childcare] should be spread to the rest of the state.”

Of course, that notion collides with Shumlin’s staunch resistance to raising “broad-based taxes,” which in Montpelier parlance typically refers to income, sales and rooms and meals taxes.

“As I’ve said many times, Vermont’s biggest challenge is not that our taxes are not high enough. It is that they are too high,” Shumlin said last week.

Fair enough. But why is it more acceptable to raise narrowly based taxes on the working poor than it is to raise broad-based taxes on the rest of us?

After all, semantics aside, reducing a tax credit is no different than raising a tax.

If he’s to succeed at expanding access to childcare — a laudable and universally popular goal — he’ll have to provide a more convincing answer than he has thus far.

Selling childcare subsidies to the daycare crowd is easy. The tough part of the job is coming up with a palatable funding source — one with a realistic chance of passing muster with a newly assertive, and seemingly disenchanted, legislature.

It’ll be tough, but didn’t we elect Shummy to get tough things done?

Where in the World is Shumlin Sandiego?

The good news for Shumlin is this: He’s headed to sunny Miami this Wednesday for a three-day trip to help court foreign investors for a $600 million development project planned for the Northeast Kingdom.

And that’s just the beginning of the gov’s world tour. Next month, he’ll head to Brazil for five days. In September he’ll travel to China for a week and a half, according to Secretary of Commerce Lawrence Miller.

During each of these trips, Shumlin plans to promote Vermont economic development projects funded by the federal EB-5 investor visa program, which provides green cards to those who drop half a million bucks into qualifying projects.

While in Miami, Shumlin will talk up Vermont’s oversight of EB-5 projects to investors and attorneys attending a conference of the American Immigration Lawyers Association, according to Bill Stenger. The Jay Peak co-owner is the mastermind of the Northeast Kingdom project — and the trip. Stenger’s new project manager, incidentally, is Shumlin’s former campaign manager and deputy chief of staff, Alex MacLean.

“South Florida is an enormous market for immigration,” Stenger said. “It’s probably one of the most productive trips we can take.”

According to Miller, Shumlin’s travel expenses will be covered by a special fund established by the legislature in 2011 that draws revenue directly from EB-5 investors. Each time one of them invests in a Vermont project, they owe the state a $1500 fee — and that money is used to promote the state program. Projects that preceded the 2011 law can be billed back for those costs.

“The reason it sounds so fucking complicated is because it is,” Miller said.

As for whether the governor should be flying around the world to promote a private-sector project, Miller said there’s no question.

“I’m not sure how I could ask him to spend 10 or 15 days this year differently that would have a bigger impact in terms of thousands of jobs,” Miller said.

Legislative Landing

The debate over basing F-35 fighter jets in Burlington is set to crash-land in the legislature this week.

Rep. George Cross (D-Winooski) says he and at least five other Burlington-area lawmakers are introducing legislation in the House calling on the Air Force to remove Vermont from consideration during the first round of basing decisions for the next-generation war plane.

The Winooski rep says he was inspired by a recent letter signed by 16 local clergy members who staked out the same position.

“It makes sense to me. Let’s find out more about it,” Cross says. “This plane certainly has a very bad reputation among military experts.”

It wouldn’t be the first F-35 resolution the legislature has considered. Back in 2010, the body overwhelmingly backed a resolution in favor of the planes — but Cross says, “Absolutely no one in the legislature had any particular idea about the pros or cons of basing at the time.”

Though opposition to the plane has grown since then, Cross concedes his resolution is a long shot. He says several one-time cosponsors have pulled their names off it.

“Some thought the wording might be too strong,” he says. “Others might have been spoken to by someone. I don’t know who spoke to them or why.”

Swift Passage

Now that former Massachusetts senator Scott Brown is out of the running for the seat opened up by John Kerry’s appointment as U.S. secretary of state, Bay State Republicans have been looking high and low to find a candidate.

When a reporter asked former governor Jane Swift if she’d be inclined to run, she gave a surprising answer: No, because she’s moving to Vermont.

Sure enough, when Fair Game caught up with Swift, the ex-gov said she’s already enrolled one of her three children at Rice Memorial High School for next year and is shopping for real estate somewhere between Middlebury and Burlington.

Swift was appointed CEO of Middlebury Interactive Languages in August 2011, and the company recently decided to transfer all its far-flung employees to its namesake town, she explained.

“It’s definitely hard to leave the Berkshires and it will always feel like home, but we’re really excited about the move to Vermont,” she said. “It’s got a great quality of life and a lot of things are similar to western Massachusetts in a lot of ways.”

Fair Game simply couldn’t resist asking whether Swift might one day get back in the fray and run for office in Vermont.

“I have not even registered to vote in Vermont yet, so right now I’m very focused on building this company,” she gamely responded. “That’s a significant commitment for the foreseeable future.”

Doesn’t sound like you’re ruling it out!

“You know what, I never rule anything out,” she said.

(Disclaimer: Tim Ashe is domestic partner of Seven Days publisher and coeditor Paula Routly.)

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About The Author

Paul Heintz

Paul Heintz

Bio:
Paul Heintz is Seven Days' political editor. He writes the weekly column, "Fair Game."

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