• Speaker chosen, committees named, $120M bond proposed
     | January 08,2009
    Jeb Wallace-Brodeur/Times Argus

    Members of the House of Representatives, including Rep. Topper McFaun, R-Barre Town, center, take the oath of office Wednesday from Clerk of the House Donald Milne, foreground, during the opening day of the legislative session.

    MONTPELIER — Lawmakers returned to the Statehouse on Wednesday to kickoff the 2009 legislative session, facing the grimmest budget numbers and the weakest economy in memory.

    "Working together, we must all focus our efforts in this building over the coming months on the policies and priorities that will keep Vermonters working, warm and well," newly elected House Speaker Shap Smith of Morristown told his chamber.

    The fiscal urgency appeared to drive the start of the session.

    It typically takes at least few days for a new Speaker of the House to appoint committees for the start of a two-year lawmaking biennium.

    But by noon Wednesday, Smith had been elected speaker, had named his committees and proposed more than $100 million in new bonding.

    "I know this takes a few people by surprise, but it is time to get to work," Smith said after he named the members of the various House committees.

    Smith's bonding proposal — although still far from being fleshed out — also surprised many of those freshly returned to the Statehouse or there for the first time.

    In rough terms, Smith asked his colleagues to join him in a massive two-year infrastructure spending initiative designed to create jobs and repair roadways. The bonding proposal would use already existing bonding capacity — that is the state's ability to borrow money for long-term capital projects — and about $120 million in new borrowing to build roads, buildings and other projects.

    Senate President Pro Tem Peter Shumlin, D-Windham, said that although he reserved judgment on the details, economic development to create jobs should be the focus of the Legislature.

    "This is the beginning, not the end, of a very difficult time," he said. Shumlin also said the Legislature, budgeted for 18 weeks, would keep itself to 16 weeks this year to save money.

    The idea for Smith's bonding proposal came from a $5 million 1983 plan by then-Gov. Richard Snelling, Smith said. The statute authorizing that program states that its goal was to implement "a public works unemployment jobs program for the purpose of providing temporary employment to certain unemployed Vermonters."

    Snelling proposed his plan in his 1983 inaugural address.

    "In responding to the short-term news of the recently unemployed, I suggest to you that we establish a vehicle to apply their skills to meeting long-term state requirements for enhancing and preserving publicly-owned, vital capital assets. Our forests need thinning … our parks will be more valuable … better weatherproofing and insulation of our state buildings will pay for itself," Snelling said at that time.

    And the $5 million in borrowing to support Snelling's plan should be beyond the state's normal borrowing plan, he added.

    "Clearly, such bonding ought to be in addition to any formula limit this Legislature sets on routine bonding," Snelling said.

    It is not clear exactly how Smith's proposal for additional bonding beyond the expected "safe debt" limit would be structured. The state can either issue general obligation bonds — that is debt borrowed against its very high bond rating and reputation — or revenue bonds paid for with some sort of new tax, fee or other revenue source.

    The second option is far more likely, according to those working on the idea. It appears probable that an increase in the state gas tax would be among the top options considered by lawmakers. Such a proposal has been suggested by State Treasurer Jeb Spaulding as a way to support increased bonding for transportation projects.

    Gov. James Douglas, himself a former state treasurer and fiscal hawk, has opposed both going over the state's debt limit and new broad-based taxes to cover the repayment of revenue bonds.

    "I think the speaker and I share a lot of goals," Douglas said Wednesday. But he added "I am concerned about a proposed tax increase, which I think is inherent in this proposal."

    Increases in fees, like the vehicle and transportation fees his administration has proposed, are different, Douglas said. That is because they come up for review on a regular schedule established by the Legislature, the governor said.

    For a session that started with such a bang and is likely to be dominated by state budget and revenue needs and concerns, there remain a half-dozen major "moving pieces" that budget writers will have to understand to complete their work.

    For example, a massive federal stimulus package is expected within weeks that could result in transportation and health care money flowing to states. And the Douglas administration is now wrestling with a sizable "budget adjustment" act — that is the midyear changes to the current budget — as well as next year's state spending plan.

    Finally, state revenue projections will get two more updates that are likely to make the budgeting picture even grimmer. The first of those will be next week.

    At the center of all of it will be Smith, 43, who was not the odds-on favorite to win the post when the competition began earlier this fall among Democrats, who have a wide majority in both the House and Senate.

    Although he has not been the chairman of a House committee, Smith has become a well-known member of the Legislature, often working together with former House Speaker Michael Obuchowski, the Rockingham Democrat who has been and will remain head of the Ways and Means Committee that oversees state revenue for the House.

    Smith was joined Wednesday at the podium by his young son Eli, a frequent visitor to the Statehouse over recent years, while his wife and daughter watched from chairs flanking the speaker's post at the front of the House chamber.

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