Summary of the Vermont State of the State Address
By Stateline Staff
Vermont Gov. Jim Douglas (R) used his final state of the state address to urge lawmakers Jan. 7 to roll back tax increases enacted last year to balance the budget, and he called for sweeping changes to the way Vermonters pay for education.
Douglas, who has opted not to run for re-election this year, told the Democratic Legislature that they need to work together to solve Vermont's problems, just as they did when they enacted historic health care legislation and became the first state to join California in adopting more stringent standards for automobile emissions.
"Our successes are threatened by massive budget shortfalls, unfunded liabilities and a broken system of education funding," said Douglas, who was first elected in 2002 and re-elected every two years since then. (Vermont and New Hampshire are the only states with two-year terms.) To address what he called " the crushing weight of Vermont's tax burden," Douglas proposed reinstating a 40 percent exemption on capital gains income and increasing the estate tax exemption from $2 million to $3.5 million - changes the legislature made over Douglas' objections.
To cut education costs, he wants teachers to pay at least 20 percent of their health care premiums, increase student-teacher ratios, merge smaller schools and change the "income sensitivity" education subsidies that he said will allow 70 percent of Vermonters next year to be "shielded from the full brunt of education spending."
"If we put off hard decisions for yet another year, we will be left with a cumulative deficit of a half billion dollars over the next three years - our worst choice, by far," Douglas said. Before becoming governor, Douglas had served as state treasurer, secretary of state and was elected the state House majority leader at the age of 25. He also currently is the outgoing chairman of the National Governors Association.