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Wednesday, May 9, 2018

Opinion
Walters: Team Scott Defends School Savings Estimates

Posted By on Wed, May 9, 2018 at 4:37 PM

click to enlarge Tax Commissioner Kaj Samsom - JOHN WALTERS
  • John Walters
  • Tax Commissioner Kaj Samsom
Officials in Gov. Phil Scott's administration are defending his school funding plan in the wake of an unfavorable review from legislative experts.

Scott's plan involves using $58 million in one-time money to keep property tax rates level in the new fiscal year, and enacting a five-year plan to trim school costs. The administration estimates the savings at $300 million over five years.

But on Tuesday, the legislature's Joint Fiscal Office issued an analysis that said Scott's plan dramatically overstated the potential savings — and none of the savings could be counted on with certainty.

Tax Commissioner Kaj Samsom appeared Wednesday morning before the House Ways and Means Committee. His message, in brief: The exact numbers don't matter.

"If you take the bleakest estimate [of savings], it still leaves you with more than $100 million in capacity," he asserted. "We can have differences of opinion on when and how much the savings will come, but we are confident they will come."

Nice move, turning a professional analysis by fiscal experts into an "opinion."

JFO concluded that the administration's $300 million figure was high by somewhere between $100 million and $160 million. Samsom offered no immediate rejoinder.

"I don’t have new figures," he told the committee. "We are in an iterative process with JFO, incorporating their findings."

"It's May 9," noted House Ways and Means chair Janet Ancel (D-Calais), referring to the rapidly approaching end of the legislative session. "We need to have hard figures. If the numbers keep changing, it’s hard to have a conversation."

Committee members were largely skeptical. Even Republican members seemed cautious about fully endorsing the plan.

"The JFO says it can’t book savings," Rep. Kurt Wright (R-Burlington) said. "How can you book savings in a five-year plan?"

"It’s really difficult to book savings," Samsom replied. "Things could change. We’re sharing credibly computed savings that can be achieved."

Samsom acknowledged one inconvenient truth. "We don’t anticipate savings materializing in fiscal year 2019 or 2020," he said. Indeed, the administration's projections show the vast majority of the savings coming in the last two years of the five-year projection —in fiscal years 2023 and 2024.

And, as was noted around the committee table, the more long-term the projection, the less certain it becomes. The Scott plan depends on savings materializing three, four and five years from now.

"Being [in the legislature for] 10 years makes me skeptical," said Rep. George Till (D-Jericho). In that decade, he saw governor Jim Douglas make rosy predictions for his "Challenges for Change" initiative, which collapsed by the end of Douglas' tenure. Then, under governor Peter Shumlin, Till said, "Single payer [health care] was going to save us boatloads of money. It didn’t happen. Overoptimistic projections are pretty classic around here."

Several members of the committee expressed doubt about borrowing against projected future savings. No one seemed crazy about the idea. And amidst all the talk of funding reform, that's the real nut of the issue. The governor is bound and determined to hold property tax rates level, and is willing to borrow $58 million to do it.

Ancel acknowledged that some of the projected savings are almost certain to materialize. Indeed, the Scott plan is based on three cost-saving items that have been approved by the legislature or are on their way to approval: Act 46, which encourages school consolidation; special education funding reform; and statewide negotiation of teacher health care benefits.

But the legislature is extremely reluctant to put the state out on a financial limb by borrowing now against future savings. There seems to be room for compromise — but only if Scott is willing to move on his no-tax-rate-hike position. If he insists on the full $58 million, there may be a long, bloody battle in store between now and adjournment.

And apparent errors in the governor's plan don't do anything to reassure skeptical lawmakers. 

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About The Author

John Walters

John Walters

Bio:
John Walters is the political columnist for Seven Days. He is a longtime journalist and spent many years as a news anchor and host for public radio stations in Michigan and New Hampshire. He’s the author of Roads Less Traveled: Visionary New England Lives, published by Plaidswede Press.

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