MONTPELIER, Vt. – Republican Gov.-elect Phil Scott already is getting some pushback on his promises to hold budget growth to the previous year’s economic performance.

State Auditor Doug Hoffer, a Democrat-Progressive, and Democrat Tim Ashe, the Senate’s incoming president pro tempore, have raised issues with Scott’s budget plans.

Hoffer has questioned whether Scott’s benchmarks account for growing tax revenues coming from the affluent and whether enough economic data will be in hand at the end of a calendar year to write a budget for the fiscal year that starts six months later.

Hoffer said he was speaking not as auditor but as a private citizen when he raised the first two questions in a letter to the editor of the Burlington Free Press this week.

He noted a Free Press article that referred to Scott’s “laudable idea” that an “increase in government spending should not outstrip taxpayers’ economic gains.”

Hoffer wrote that “how one defines ‘taxpayers’ economic gains’ is critical. For example, we know that wages for most Vermonters have been largely stagnant for many years. But if we look at the top earners, we see a different story.” He pointed to “enormous growth in income by those at the top” in the post-recession years of 2010 to 2014.

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“Income tax revenue from this group was $151 million higher in 2014 than it was in 2010,” Hoffer wrote. “If we follow Mr. Scott, we would spend none of that revenue. Is that really in the best interest of the State?”

Jason Gibbs, tapped Wednesday to be Scott’s chief of staff, said Hoffer’s argument “doesn’t make any sense.”

He argued that Scott’s plan would be geared to protecting middle-income Vermonters, adding that there are no plans for changes in Vermont’s income tax rates on households making more than $300,000.

Gibbs also accused Hoffer of playing partisan politics.

“He hasn’t taken any time to talk to us about it,” Gibbs said. “That, I’m afraid, is more of a partisan gesture than a good-public-servant gesture.”

Gibbs said there would be enough information about the 2016 economy for the governor to write a budget to bring to lawmakers in January.

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Hoffer said it often takes several months to report key economic indicators. An estimate of Vermont’s 2015 gross state product was not released by the federal Bureau of Economic Analysis until June of this year, Hoffer said, six months after Democratic Gov. Peter Shumlin delivered his final budget to lawmakers and a month after the Legislature adjourned.

Ashe, who is also chairman of the Senate Finance Committee, questioned whether tying the budget to a previous year’s economic activity might limit the flexibility needed to respond to changing economic conditions. In an interview with The Associated Press, he also expressed concerns about Scott’s proposal to put Vermont on a two-year budget cycle instead of a one-year cycle.

Gibbs said the budget cycle likely would include “a robust budget-adjustment process” in the off-year, but Ashe said policymakers need the flexibility to respond, for example, to a sudden economic downturn. Pressure for more human services spending tends to increase as such times, he said.

“A hard-and-fast rule on a two-year budget doesn’t clearly accommodate the reality of public economics that suggests you need to take care of people in the hardest times,” Ashe said.


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