Vermont rebuilds while Congress fights
The state of Vermont is struggling to gather funds to repair the flood damage from Hurricane Irene, the state’s worst natural disaster since the floods of 1927. Generally the state would rely on support from the federal government to replace and repair this infrastructure, but the U.S. Congress is locked in a fight over funding the Federal Emergency Management Agency as part of a larger fiscal battle that could shut down the federal government. From CBS News:
Congress is headed for a showdown over disaster relief funding that could bring the government to the brink of a government shutdown again.
House Speaker John Boehner has scheduled a vote tomorrow on a bill that would keep the government operating through Nov. 18. If the Senate and the House do not approve the stopgap measure, known as a continuing resolution, before the fiscal year ends Sept 30, the government would be forced to shutdown.
The House bill includes $1 billion in immediate funding for the Federal Emergency Management Agency and $2.65 billion for next year, but the Republican measure also includes a provision to offset the FEMA funds with cuts to the Energy Department’s Advanced Technology Vehicles Manufacturing Loan Program.
Meanwhile up north Vermont is scrambling to make repair funds available from a variety of sources. VTDigger.org reports:
In the meantime, the state [Vermont] is setting up loan programs to ensure that communities aren’t tapped out as they wait for federal reimbursement money.
Vermont banks, the Vermont Municipal Bond Bank and the state Treasurer’s Office announced a financial assistance package to help ease the financial stress on municipalities as they rebuild over the coming year.
The state will advance $24 million in payments that are already slated for town highway aid ($6.2 million), current use ($12.3 million) and payment in lieu of taxes ($5.8 million).
Local banks will “immediately” open lines of credit worth several hundred thousand dollars to millions of dollars to cash-strapped municipalities. In the event that a municipality reaches the lending cap, the originating bank will turn to a “loan pool,” in which other banks offer more capital.
In the short-term, banks that have exhausted other avenues can turn to the Vermont Municipal Bond Bank for cash to meet short-term municipal needs, according to John Valenti, chair of the bond bank board.
I think the lesson here is that states need to plan for less support from the federal government for emergency funding, or at least have back-up plans in place to tide themselves over. Imagine if this crisis had happened in Illinois, a state with limited borrowing capacity which doesn’t have enough cash to cover its current payables. I suppose the repair work would have to wait until members of Congress fought their ideological battles. Battle by battle we are seeing the federal structure weaken. The states must strengthen themselves.
New York Times hot on Cuomo bank
Tri-level sunshine
Centers of power, by their nature, seek to control and hide information, but civil societies and stable governments require transparency to create the bedrock of confidence among their citizens. Every government must commit itself to open dealings and renew that commitment on an ongoing basis. We have good news from the state of Vermont that this commitment has spread to the state and local level.
Transparency at the federal level got a big boost when President Lyndon Johnson signed the Freedom of Information Act in 1966. Wikipedia says the Act “allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States Government” and that it also “defines agency records subject to disclosure, outlines mandatory disclosure procedures and grants nine exemptions to the statute.”
Some have argued that Congress has carved out too many exemptions to the law, but there are many instances where the FOIA has been an effective tool for opening up the records of important government actions. Without FOIA requests from deceased Bloomberg reporter Mark Pittman, for instance, the public would have never learned the details of the Federal Reserve’s facilities that funneled $3.3 trillion to financial institutions during the financial crisis.
When President Obama took office he urged the federal government to set a higher bar for openness. He issued a memorandum early in his administration on transparency that made the following points:
Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing.
Government should be participatory. Public engagement enhances the Government’s effectiveness and improves the quality of its decisions.
Government should be collaborative. Collaboration actively engages Americans in the work of their Government.
These are very laudable goals. It is difficult to move government bureaucracies to a new approach. It will take many administrations but is certainly worth the effort.
Openness needs to happen at the state and local levels too. We have excellent news from Vermont. The Burlington Free Press reports:
Muni sweeps: Hack for change
Attention Muniland! Do you have an idea for a public web or mobile application? Change.org is sponsoring a Hack for Change on June 18th and 19th and is soliciting ideas for their programming competition. Here are some of the ideas that have already been posted:
- A reviews site that allows citizens to rate and evaluate city government services and departments
- A site that makes government data more accessible and actionable
- An app that lists all San Francisco city legislation and allows residents to vote on it
- An app that notifies police of suspicious activity
Submit your idea today!
Muni Web 2.0 stars
Government Technology reports on the winners of a wonderful competition to create the best municipal Web 2.0 and social media technologies:
Santa Monica, Calif., was spotlighted for its XML feed that makes real-time parking information available to the public, including the number of parking spaces available in the city. The information is displayed on a city webpage with the number of spaces being updated every 60 seconds.
Arvada, Colo., received the award for its virtual city hall. Called “ASK Arvada,” the tool is designed to increase customer service by providing access to answers and the ability to request service with every department in the city. Requests can be sent through various mediums, including the Web, Twitter and smartphones.
Solve the real problems
Unfunded municipal pension liabilities are getting all the attention now, but it’s the burden of Medicaid and health-care expenses that are really crushing state and county budgets. In California, for example, the state will make a $2.4 billion pension contribution to Calpers and spend approximately $16 billion on Medicaid. The federal government kicks in an additional $25 billion.
I first understood this when I listened to the governors of Vermont and Wisconsin testify to the House Oversight Committee on April 14. Governor Peter Shumlin of Vermont explained his approach to bringing his state budget into balance:
This crisis is the result of the greatest recession in history. I didn’t start with changes to collective bargaining and pensions. Our first problem is that health care costs have doubled. Our second cost driver is that corrections have doubled in 10 years.
I go where the money is. There are steps you can take without undermining traditional defined contributions plans. We worked together. We brought unions together. We shared sacrifice. In our discussions we got more with maple sugar than vinegar.
Granted, Vermont is a tiny state, but it is the perfect laboratory for political changes because they are willing to work together to improve their government. The video above offers an exciting preview of the changes that Vermont will be making to provide health care. Let’s keep our eye on how Vermont succeeds with trying to adopt a single-payer system.
As far as medical care in the USA is concerned, the real problem is the billions and billions taxpayers are forced to pay to pay most of the costs of a medical education, even at so-called “private” institutions, and then there is no obligation for the recipients to repay into the system through public service.
This country must make “private” medical education completely separate from “publicly subsidized” medical education. That includes facility subsidies, participation in Government funded research, loans to both institutions and students, and free access to the fruits of Government funded research.
Those who are trained with Government money should be required to provide public service on a mandatory basis. Those who pay for their own training should pay for use of Government funded technology inventions as well.
Time for one of the biggest “free rides” in the USA to come to an end. This is a major reason we have the most expensive and least effective medical system of all industrialized countries.
Issa’s municipal pension hearing
Congressman Darrell Issa’s Committee on Oversight and Reform meet today on state and municipal debt.
The hearing was really a dressed up fight over municipal pensions and collective bargaining rights.
The concern is that bond investors, worried about unknown pension liabilities, will increasingly require more yield for the risk of owning municipals. And some think a solution is to remove the current form of guaranteed pensions.
Many public workers do not get Social Security; rather they get a municipal pension. This is a “defined benefit”.
Defined benefit plans are like Social Security or a fixed annuity. You and/or your employor pay into the plan for a number of years and at retirement you receive a monthly check for a fixed amount adjusted for the cost of living (COLA) increases.
In contrast defined contribution plans are managed by individuals and are valued by the securities held within an account. In times of stock market booms a 401k likely will increase in value. But in times of financial distress an individual account can be severely reduced. And a retirement devastated.
-
Resident Muniland expert
-
