Comments to VT Community Foundation 11/19/2014

I believe expressed opinions warrant a disclosure of bias and so will start by sharing mine.

I’m a humanist. I believe in the power of citizen-engaged democracies to improve the lives of their citizens and to enhance the human condition.

I believe in the power of a regulated marketplace, the value of human enterprise, and the dignity of work.

I believe in the value the traditional social architecture of family, community, and religion provides to its members. I am also aware that social and economic institutions can be perverted and used for greed, violence, and sexual predation.

I believe in a social safety net, the cost of which is managed not by random budget cuts but by accountable and transparent management and by preemptive and preventive investments in publicly-financed education and healthcare.

I believe in public infrastructure, cultural, and environmental investments meaning public transportation systems, support for the arts and historic preservation, and state, national, and urban parks.

I believe in transparency, civic vigilance and the protection of civil liberties.

I believe in a uniform code of civil and criminal justice and in a corrections system that treats rich and poor alike, whose sole mission is to reintegrate offenders as rapidly and as safely as possible into their communities.

These are the biases that inform my remarks.

We need to be vigilant about the emergence of two Vermonts – rich and poor. Vermont has two key economic distinctions now. We’re near the top of the states for income derived from interest and dividends – pernancy income – rather than earned income and in income inequality – the gap between those making the most and those making the least.

The economic vitality of our small towns has migrated up and out as we become ever more connected to the global community and the urbanization going on worldwide. Our small towns now depend on limited human and economic resources, often based on second homeownership and retirees, while our growing urban neighborhoods are where the money is. We see increased stratification along wealth and social class, with Vermonters falling from the middle class to working poor and living on in villages and town with little economic resilience.

The decline of our small agrarian towns and the rise of our few urban, mercantile centers is a significant change from my childhood, but follows an international pattern of urban migration for employment. We’ll soon see a similar decline in our suburban shopping centers as they are being rendered obsolete by online commerce.

Our social and cultural institutions are threatened as communities stratify by wealth and class. The small towns I knew growing up in Vermont scrambled rich and poor together as everyone met in shops, schools, and churches. This social adhesion and common enterprise meant we could usually surmount community challenges beyond the reach of just money.

The erosion of the family unit (regardless of gender makeup), of benign religious institutions, and of small-scale mercantile communities has grim implications for fighting poverty and managing social safety net costs. Our institutions start to reflect social and economic strata in housing and neighborhoods, access to and quality of healthcare, education, and criminal justice. Social and economic mobility declines and wages stagnate as cost of living rises. Self-medication and addiction offers momentary relief and wreak havoc with the future. Without the adhesive effect of our small communities, I’m convinced we’ll never be able to afford the social safety net we’ll need to protect those damaged by the increasingly severe social and economic dislocations we see today.

Before I talk about possible remedies, I want to point out that, like our President, we have much less power to effect change than we might imagine. Vermont’s boundaries are a fiction. We’re buffeted by larger economic, social, political, legal, cultural, and environmental trends that ignore our borders and over which we have little control.

Although we’re a tiny state, our budget is almost $5B dollars, $3B of which we spend on human services, yet we still have 77,000 Vermonters in poverty, 82,000 food insecure and about 3,000 homeless. What are we doing wrong?

The perpetual and meaningless debate over tax burden and government spending gets us nowhere and camouflages opportunity. The government, business and mission sectors will have to focus on a few key problems and then collaborate to find better ways spend the substantial money and resources we already have to solve them. Raising taxes or cutting spending misses the point. Some portion of AHS’s $3+B budget, the $325M spent annually in the mission sector, and the money and resources available from the business community, if applied collaboratively and strategically could go a long way to solving problems like homelessness, hunger, housing, educational equity and developing alternatives to incarceration, which consumes $150M a year that could be better spent on preparing offenders to return to society productively.

The perennial “tax burden” and “government spending” meme camouflages a cross-sector opportunity to do more with what we already have through targeted and collaborative goal setting, measurement of outcomes, and accountable management. Given existing resources, we should be ashamed that such negative numbers persist in Vermont.

To use an old metaphor, we need to find a balance between fighting the alligators – that is, ensuring an adequate social safety net, and… draining the swamp – that is, addressing the longer-term economic justice issues of equal access to good education, healthcare, affordable housing, justice, and income mobility that burden the safety net. The latter are investments that diminish the cost of the former.

To the dismay of my business colleagues, I have little faith in economic development investments. Business-climate rating pursuits are a race to the bottom. Vermont has always had inherent transportation and climate challenges, a long-standing commitment to its environment, and a small but highly productive workforce. No amount of deregulation or tax incentives are realistically going to entice the elusive “job creators.” We have, in fact, many technical, service, small manufacturing, and agricultural entrepreneurs already, who are building businesses here because we have great schools, healthcare, and a clean environment in which to live and play.

A vital resource is our working landscape which we must continue to exploit, and so preserve, by supporting forest, water, recreational, and agricultural businesses.

We can also experiment with aggregating civic services, infrastructure and buildings in our small towns to save money and enhance local access to education and healthcare. One possibility is to design energy-efficient town centers for towns with under 2500 residents that co-locate pre-K and primary schools, library, fire, police, town offices, community meeting rooms and a clinic all in one building. This would end the expensive nonsense of developing unique infrastructure for every civic enterprise.

We need to urge our Chief Executive Governors to hire competence and excellence rather than political allies or “a team of rivals” to run our complicated agencies and then hold them accountable for their results. We also need to give our governors a chance to govern. The two-year term is an anachronism. How many experienced leaders would sign on to managing a $5B+ enterprise with the understanding that they have two years to understand the challenges and make a difference? We are one of two states in the country that adheres to this foolishness.

Given a declining population of students, escalating per pupil costs, pervasive digital content delivery systems, and emerging career expectations and opportunities, we need to rethink public education from the ground up and push our substantial investment down the age scale, beginning optional attendance at age three and mandatory attendance at four. Understanding learning as a continuum from birth on, we must re reimagine our aged architecture of education, streamline our Byzantine governance, consolidate performance data and be sensitive to the fact that, like democracy, education is a participatory endeavor.

Finally, as trustees I would ask you to take a position on a flaw in the “donor advised fund” instrument. The funds you steward allow the donor to take an immediate tax deduction for the full amount committed with no requirement to disburse the funds philanthropically over time. I know the VCF counsels its fund holders to donate and does so effectively. I also know and applaud the fact that you encourage in-state philanthropy. But 40+B dollars of “philanthropic money” cached in commercial DAF instruments nationally does nothing for the commonweal. The solution is simple – a spend-down requirement over not more than ten years. The VCF performs a dual service, helping philanthropists both steward and spend their investments to good purpose. It is under the second rubric that I would urge you to take up and discuss this matter among yourselves.

Thank you.