posted by Rob Roper

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Kicking off what is National School Choice Week, the House Education committee took up H.38, a bill that would ban parents in Vermont’s 93 tuitioning towns from sending their children to out of state schools. Yes, the spirit of the week seems a bit lost on this crew.

Rep. Alison Clarkson (D-Woodstock), who sent her own sons to Groton, a prep school in Massachusetts, has sponsored a version of this bill three years in a row. She excused her hypocrisy by citing “family tradition.” Forget 150 years of Vermont tradition of letting tuition follow the child to the best school for that child.

However, the discussion regarding H.38 led to a broader discussion of school choice as a concept.

Rep. Sarah Buxton (D-Royalton) described her district, which is comprised of Royalton, a non-tuitioning town, and Tunbridge, a tuitioning town. “So when a parent can be in Tunbridge and send their child to KUA (Kimball Union Academy), and their sister wants to send her child to KUA, but lives in South Royalton, one family [in the non-tuitioning town] has to pay tens of thousands of dollars a year [to attend KUA]…. and the sister family in [the tuitioning town] doesn’t.”

Yes. The kids and families who live in tuitioning towns have vastly more and better options than those who don’t.

Buxton’s comments led the committee chair, David Sharpe (D-Bristol) to ask, “Are we bifurcating our school system so that wealthy Tunbridge kids get to go to Kimball Union?… Is there a bifurcation so that rich kids can and poor can’t?”

The answer is yes, but Sharpe seemed to have it backwards. The bifurcation exists in the non-tuitioning towns. To use the example Buxton set forth, all the kids in the choice-based tuitioning town of Tunbridge, rich and poor alike, could choose to go to Kimball Union in New Hampshire, or a local public school or another independent school such as Sharon Academy. But only the kids wealthy enough to afford the tuition could do the same if they are from non-tuitioning Royalton.

Rep. Curt Wright (R-Burlington) raised a critical question. “Obviously there’s some reason parents are sending their kids out of state.” The answer is that parents want what’s best for their kids, and many will go to extraordinary lengths to meet their kids’ educational needs.

Rep. Ann Manwaring (D-Wilmington) recounted, “In my two towns that have a high school, what will happen is … one of the parents rents a house in Londonderry or Winhall or something like that to go to Burr & Burton.”

Clarkson herself pointed out that residents of tuitioning towns are opposing her bill because, “One of the attractions of living in a tuitioning town is that there kids can go wherever they want. “

Shouldn’t every family in every town – rich and poor alike — have the same opportunities to send their kids wherever they want? Especially if it saves taxpayers money, as town tuitioning often does.

- Rob Roper is president of the Ethan Allen Institute.


John McClaughry

Liberal Democratic governor Andrew Cuomo of New York has emerged as a new champion of school reform.

In his recent education message Cuomo proposed that to earn tenure, teachers would have to be rated effective for five consecutive years, instead of just being employed for three.. He also wants to make it easier for school districts to remove lousy teachers. He notes that firing an incompetent teacher takes 830 days and costs $313 thousand dollars. He wants to make it a lot quicker and easier.

Cuomo proposes that failing schools be put into receivership, and the receiver could be a nonprofit, another school district or a “turnaround expert.” Receivers could override labor agreements and fire teachers. And students in low-performing schools would get priority in charter school lotteries.

Cuomo also wants to expand school choice. He’d remove New York City’s limit on charter schools, lifting the statewide cap by 100. He also wants to revive his plan for $100 million in tax credits to corporations and individuals that invest in either public or private schools—such as after-school programs or Catholic school scholarships.

The education tax credit would be tied to a “Dream Act” providing state college financial aid to undocumented immigrants. Coupling the tax credit to the immigrant provision is intended to force Senate Republicans and Assembly Democrats to accept the politically unacceptable.

Cuomo’s program is a large step in the right direction. Vermont should emulate it.

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By Rob RoperRob Roper

The Vermont Legislature has long been bent on saving the planet through government micromanagement of energy policy. The big issue this year appears to be passing a renewable portfolio standard (RPS) that would require utilities to sell a set percentage renewable power (and thereby forcing customers to buy the more expensive product). The other issue, likely debated but not moved on this year, is a carbon tax designed to make fossil fuel use artificially expensive.

According to a recent report by Ross Koningstein and David Fork, engineers at Google who worked on the company’s groundbreaking renewable energy project RE<C, this is exactly the wrong thing to do.

In 2007, Google launched RE<C to “tackle the world’s climate and energy problems.” The goal was to figure out how improve renewable technologies to the point that they could deliver renewable energy more cheaply than a coal fired power plant could. In 2011, Google pulled the plug on the project. The science just didn’t work.

As Koningstein and Fork concluded, “Trying to combat climate change exclusively with today’s renewable energy technologies simply won’t work; we need a fundamentally different approach.”

The engineers concluded that even if we were somehow able to shut down every fossil-fueled power plant immediately, it still wouldn’t stop the planet from warming. “We decided to combine our energy innovation study’s best-case scenario results with Hansen’s climate model to see whether a 55 percent emission cut by 2050 would bring the world back below that 350-ppm threshold. Our calculations revealed otherwise.”

A totally new technology will be necessary. What is it? Koningstein and Fork don’t know, but they do offer some ideas for what characteristics it must embody and principles upon which it must be developed. Topping the list: Profit motive.

Profit has wrongly become a dirty word for many in Vermont, but it is the only efficient fuel, if you will, that can ultimately effectively propel technology forward far enough to achieve the environmental goal of cheap, abundant, reliable, renewable energy.

After spending half a decade studying this issue as part of a well-funded project by one of the most tech-savvy, environmentally conscious companies in the world today, Koningstein and Fork concluded:

Let’s face it, businesses won’t make sacrifices and pay more for clean energy based on altruism alone. Instead, we need solutions that appeal to their profit motives.

Across the board, we need solutions that don’t require subsidies or government regulations that penalize fossil fuel usage. Of course, anything that makes fossil fuels more expensive, whether it’s pollution limits or an outright tax on carbon emissions, helps competing energy technologies locally. But industry can simply move manufacturing (and emissions) somewhere else. So rather than depend on politicians’ high ideals to drive change, it’s a safer bet to rely on businesses’ self interest: in other words, the bottom line.

Let’s apply these realities to Vermont. If shutting down all the fossil fuel power plants in the world today won’t solve the warming problem, Vermont’s goal of reaching 90 percent renewable energy by 2050 in our little state alone is really a worthless endeavor. Worse than worthless. It’s potentially damaging to our economy as well as our natural environment while providing nothing in return.

Meredith Angwin of Vermont’s Energy Education project calculated that in order to generate 90 percent of Vermont’s energy requirements from local, renewable sources, which is the goal, it would require developing as much as 700 miles of ridgeline, all on the scale of the Lowell wind project. Vermont is only 154 miles long, and only a fraction of that number is suitable for wind turbines.

Alternatively, we would have to cover an area one quarter the size of the Green Mountain National Forest with solar panels to achieve the same result. Driving through much of the state today and passing acres of unsightly panels where Woody Jackson’s cows used to graze it seems like we’re already approaching that mass, but, despite the perception, we’re not even close.

This kind of industrial development, essentially turning thousands of acres of our pristine landscape, pastures, ridgelines and wildlife habitats into power generation factories, will have a devastating environmental and aesthetic impact on Vermont. The artificially high costs of energy will drive away businesses and jobs. The damage to the landscape will repel tourists. And, even in the best case scenario, this policy will do nothing to solve the issue of global warming.

So, rather than plow forward with expensive and invasive policies we know won’t work, perhaps Montpelier might take a page from Google’s book: pull the plug for now, at least until a real solution has been identified. Our pristine landscape and the children who inherit it will thank you.

- Rob Roper is president of the Ethan Allen Institute.


The next round of Vermont Heath Connect (VHC) problems are about to hit Vermonters. This time they have to do with taxes and the IRS.  At the weekly Republican caucus meeting at the State House this Tuesday, Representatives Doug Gage (R-Rutland) and Ann Donahue (R-Northfield) briefed legislators on what to expect. If you bought insurance through VHC, you may owe the IRS a chunk of change.

Issue number one: some of the calculators the VHC navigators were using were incorrect. Since what you pay for your insurance under VHC is calculated based on income, you could end up owing more (plus penalties), or owing less based on the mistake — all through no fault of your own.

Issue number two: Some people may be kicked off the program due to underpayment (again, due to no fault of their own).

Complicating matters further, the IRS says it only has the capacity to field roughly 50% of the total customer service calls they expect to get from citizens trying to deal with these problems.

Watch the video for a fuller explanation.

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posted by Rob Roper

Cleaning up Lake Champlain is a priority for the Governor and the legislature, at least according to the latest sound-bites. So, here’s a bit of a head scratcher….

The U.S. Department of Agriculture announced in an article titled, USDA Unites with Partners to Improve Water Quality in Lake Champlain, that TWENTY PARNTERS have come together in New York and Vermont to finally get it done. They even held a press conference in the Cedar Creek Room of the State House with Governor Shumlin and his team. Finally we’re going to get something done!

The USDA announcement read, “Through a new partnership with USDA, nearly 20 organizations in the area will work together with farmers and ranchers to help improve water quality of the lake and reduce algae blooms.”

Great, right!

Logical question: who are these twenty partners?

James Ehlers of Lake Champlain International asked the USDA for a list of who they are, and this is the reply he got:

Good afternoon, James,

Thanks for your interest in RCPP.  I’ve been advised by our national office that the list of partners should be requested through the Freedom of Information Act (FOIA) process.  Carol Vartuli is our FOIA officer here in Vermont, so please submit your request to Carol (cc’d)….

Vicky M. Drew
State Conservationist 
356 Mountain View Drive, Suite 105
Colchester, VT 05446
(802)951-6796, Ext. 242

Really? If you’re publicly bragging about bringing twenty groups together to work on what everyone says is a political priority, why should anyone need a Freedom of Information Request to find out who these people are?

It makes you wonder which is more detrimental to Lake health — bovine manure from cows, or from bureaucrats?

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posted by John McClaughry

The single payer health system advocates are fond of declaring that the United States needs to catch up with all the other industrialized nations and install government health care. It always escapes their attention that the Netherlands, Germany, France and Switzerland don’t have single payer. In fact, the Swiss recently held a national referendum on installing single payer, either the Canadian or the British version, and the voters gave it 38% support.

Grace-Marie Turner of the Galen institute said “the way government-run health system get prices down is through rationing and price controls.” It’s pretty clear that the Swiss figured that out and said “oh no you don’t.”

The Swiss system features mandatory purchase of insurance, subsidies for lower income people, and a choice of among dozens of private insurers. It’s overly regulated, but it stops well short of the single payer holy grail of, to use the Vermont language, “appropriate care at the appropriate time in the appropriate setting”, as decided of course by our Green Mountain Care Board, until the money runs out.

We’ll be spared that outcome for a while, since Gov. Shumlin has given up on single payer for the time being. But his proposed payroll tax to pay for more Medicaid looks a lot like a not too carefully disguised variation of government health care, built on accountable care organizations, state enforced global budgets, and above all, government control of hospitals, doctors and patients.  We haven’t heard the last of this.

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by Chris Campion

What a difference a year makes. Vermont’s Governor, Peter Shumlin, after narrowly edging out a gubernatorial election by less than a percentage point, recently presented his 2016 budget to the Vermont legislature.  Shumlin described this budget as the “toughest” he’s had to deliver, which really means his budget planning has long been out of whack if it’s taken him this long – after years of revenue misses causing cuts to successive budgets to be made – to own up to the fact that the State of Vermont is spending well beyond its means.

“Like a family trying to adjust its budget to meet reality, it is our responsibility as state leaders to match spending with Vermonters’ ability to pay,” Shumlin said. “Government must be effective, efficient and affordable.”

This may come as a shock to a “humbled” governor, but his recent, ah, accomplishments demonstrate that government has been none of those things.  If he’s so concerned with Vermonters’ ability to pay, why does the state still rely on property taxes to fund education?  Property values have nothing at all to do with income and ability to pay.

The governor said he recognizes the state faces a structural economic problem. The state has faced eight years of budget gaps, and the economic situation isn’t expected to change anytime soon. State revenues are projected to increase by 3.5 percent annually for the next five years, while expenditures have increased by 5 percent or more in the past few years.

I’m still not sure if he does recognize the issue.  His FY16 recommended budget shows growth in General Fund revenues of 4.4%.  But in the same budget document, on page 5, he shows year-over-year forecasted increases to the GF as being 2.91% for 2015, and 3.26% for 2016.  If you take a longer term look at the forecast, the YOY percentages in revenue growth are in steep decline, yet his budget calls for anticipated revenues well beyond what his budget documents forecasts.  His appropriation for the General Fund does not seem to meet his own statement, talking about a need to “match spending with Vermonters’ ability to pay”.

Hey, don't let the reality of declining tax receipts interrupt the healthy YOY growth in anticipated revenues!

Hey, don’t let the reality of declining tax receipts interrupt the healthy YOY growth in anticipated revenues!


Why should the forecast match the budget, anyway?  Is it really that important?

Why should the forecast match the budget, anyway? Is it really that important?

This may seem like a relatively minor nit, the difference between 4.4% and 3.26% in the General Fund, but that’s a 25% difference in assumed revenue growth rate.  So why would his budget assume such a variance between the forecast and what his budget proposes?  Why base the budget on such shaky assumptions that are constantly being revised, downwards?

Call me crazy, but those revenue projections look flat to me - and don't look close to a 4.4% number, either.

Call me crazy, but those revenue projections look flat to me – and don’t look close to a 4.4% number, either.

Not pictured:  The Swiss Cheese holes this budget seems filled with.

The General Fund is the largest component of the budget – oh, wait, sorry, it’s the second-largest component.  Because while Shumlin is trying to tell us that we have to match our budget with Vermonters’ ability to pay, the largest component of the budget is federal funds.  In other words, Daddy’s covering our spending for us, because if we lost a third of the budget revenue, state government in Vermont would largely shut down.

But the General Fund is mostly comprised of Personal Income Tax, Sales and Use taxes, and Meals and Rooms – in other words, mostly driven by rates, which makes the General Fund the most “controllable” in terms of anticipated revenues.  The state can’t control how much income Vermonters earn, but it can control the percentages it charges for the privilege of earning a living in the Green Mountains.

So if the relative size of this tax revenue component changes, even by a percentage point, the result can be catastrophic in terms of the overall budget.  Which is why the state legislature had to return to Montpelier and come up with a new FY15 budget one month after they passed it.

Why?  Because they and the governor had based their revenue projections in something other than reality.  Now that those assumptions are being laid bare, it’s clear that the “consensus” assumptions were used to mask a serious budget deficit, one that we’re experiencing right now, and considering the historical trend, we will continue to experience no matter how many times Shumlin holds up a “Vermont Strong” bumper sticker.

In fact, the state has had to revise its revenue assumptions downwards, 3 years running.  Not only does this mean that the state lacks a certain, ah, seriousness about the actual tax revenues coming in, it also demonstrates that political concerns seem to override Vermont’s financial realities.  Political concerns do not seem to meet the Governor’s own shiny new standard of “responsibility” he so proudly touts now, after he’s cleared the hurdle of re-election.

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by Meredith AngwinMeredith Angwin

A Valley News letter writer was speaking for many recently when he asked about huge electric rate increases this winter and paltry explanations for them. David C. Montgomery of Hanover New Hampshire said his electricity bill had increased by 72 percent, even as petroleum products have dropped in cost. “All we have seen,’’ he wrote, “is a rather unconvincing claim about the need for more natural gas pipelines in New England and a series of what seem to be diversionary workshops on insulation.”

His letter states the problem succinctly. Oil prices are down. Gasoline prices are down to levels not seen for years. Natural gas prices are still low. “The need for more pipelines” does seem a rather weak claim, compared to the cheapness of the commodity carried in them. Also, why would we need more pipelines now, when we didn’t need them five years ago? The demand hasn’t changed that much.

The answer is that the grid itself has changed in our region. Power plants have been retired: Salem, Mt. Tom, Vermont Yankee. When coal and nuclear plants shut down, existing gas plants run longer and use more fuel, to make up for that power. More gas-fired plants are also being planned for the future.

More Gas Needed

Around 2000, about 15 percent of New England’s electricity was made by burning natural gas. It was expensive, and used only during times of peak demand. The rest of the time, electricity was supplied by a mixture of coal, nuclear, oil and hydro. Back then, with only 15 percent of electricity coming from natural gas, pipelines to the Northeast were adequate.

Now, the price of natural gas has fallen, and nearly half of our electricity demand is met with the newly inexpensive natural gas. With increased demand, the pipelines are no longer adequate. Particularly during very cold weather, when homes use more natural gas for heating, there isn’t enough available for power plants.

Last year, when temperatures plummeted and natural gas ran short, power plants burned oil, diesel and even jet fuel. The price on the grid went up as utilities bought power produced with more-expensive fuels. Last year, bulk electricity prices often soared past 40 cents per kWh (kilowatt hour) during times of high demand. (It’s usually 3 to 8 cents per kWh.) You can track realtime prices on the grid operator site (ISO-NE) on the Web.

Other costs also go up when power plants retire, but these aren’t so easy to track. For example, capacity payments go up. So far, I have described prices for kWh . . . that is, for power produced. There’s also something called a “capacity payment”: a payment for a plant to be available to produce power. The capacity payment auction takes place three years in advance. In 2013, the auction yielded $1 billion for power plant operators. Then a number of plants retired. With more scarcity, the 2014 auction brought $3 billion to plant operators. These billions are not as visible as the “price on the grid,” but the money comes from ratepayers and raises everyone’s cost of electricity.

Winter Reliability

Then there’s the reliability issue. The grid operator will do whatever it must to ensure reliability. For the past two winters, our grid operator has run “winter reliability programs” and frankly, that program saved us last winter. Last winter, the operator paid about $70 million to power plants that could burn oil. The plants used this money to stock up — with a supply on site, they had fuel available when they were called upon. Indeed, when gas-fired plants could not get gas, the oil-burning plants went online.

Last year, the Winter Reliability Program cost $70 million in the Northeast. This year, it is budgeted at $80 million. These multimillion dollar programs get translated into our winter power bills and winter price rises. However, there is a bit of hope for the future. This has been a milder winter, with low oil prices. To date, the grid’s Winter Reliability Program has spent far less than last winter, and that is a hopeful sign for the future.


What about renewables? I will not focus much on renewables or their costs, because they are a very small portion of the electricity supply. I have been watching the hourly fuel supply on the grid rather closely, and wind has never been more than 2 percent of the supply. Renewables, including biomass and refuse, are about 6 percent of the supply. Renewables are not the cost-drivers on the grid.

Solutions, Maybe

I’ve explained the reasons for recent price rises, but do I have a solution? Well, a partial solution, maybe. First, I believe in conservation, and I just invested a great deal in improved insulation for my house. (And I want to thank Efficiency Vermont for picking up part of the cost.) To me, workshops on insulation are not merely diversionary. They are terribly important.

Being in favor of insulation is about as controversial as favoring real maple syrup. My second point is a little more controversial. Supposedly, we need more pipelines because gas is the fuel of choice . . . now. It’s abundant and cheap. But I don’t think it will remain cheap. Should we be building more pipelines because of low-priced gas? I am not sure. If the price of gas goes up, the pipelines will not be fully used.

Instead of more pipelines, I think we need a diversified grid. If we choose, we can build more renewables with a diversified grid, just as we can build them with a mostly-gas grid. And with a diversified grid (yes, I mean keeping our nuclear, coal, oil, Hydro-Quebec power as well as gas), we won’t have all our eggs in one basket.

If we are going to have a heavily natural-gas grid, we could keep our costs more stable (for now) and our grid more reliable by building more gas pipelines. But I think it would be better to choose conservation and grid diversity. With that, perhaps we could have reliability and prevent further drastic price rises in the future.

- Meredith Angwin of Wilder is a physical chemist who worked for electric utilities for more than 25 years and now heads the Energy Education Project of the Ethan Allen Institute.  


Posted by Rob Roper


You’ve probably heard the ads on the radio featuring people proclaiming the evils of soda, juices, sports drinks, teas, etc. that are sweetened with added sugars. These folks are advocating for a 2¢ per ounce excise tax on such products.

The theory is that by making sugary drinks a more expensive option, folks will choose less expensive, healthier options when making their purchases. By virtue of those choices, the obesity crisis will be solved, or at least mitigated.

The costs do appear daunting. The tax is estimated to cost Vermonters over $30 million per year. 2¢ per ounce translates into a 24% tax on a one dollar 12 oz. soda. Rep. Doug Gage (R-Rutland) who works for Coca Cola, outlined one scenario in which a 2 liter bottle of soda, on sale for 99¢ at the grocery store, would be taxed at a rate of 134% ($1.34 per bottle!)

However, this is not how the tax works in practice. It is an excise tax levied on the distributor, not the consumer at point of purchase. The distributor, once taxed, can then pass the cost of the tax along to ALL their customers over ALL of their products, not just those who purchase sugar sweetened beverages. So all this tax will ultimately do is raise the price of ALL drinks — for everybody – by $30 million plus.

Such higher costs also have the potential to drive more business across the Connecticut River to glorious, tax-free New Hampshire.

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John McClaughryJohn McClaughry

In his earnestly delivered January 15 budget message, Gov. Peter Shumlin addressed many of the pressing issues left out of his inaugural address the week before.

The coming year’s budget, Shumlin said, was “the toughest budget that I’ve put together.” Not much argument there. The flood of federal cash has reduced to a trickle, revenues are coming in well below projections, and the FY2016 General Fund faces at least a $94 million deficit. At this crucial time, he said, the legislature must “curb state spending to bring the cost of state services in line with revenue growth.”

The governor also appealed to overburdened taxpayers by declaring that “tax raising won’t work” to solve the deficit. Before he was done, however, he was back into tax raising (terminating the income tax deduction for state and local taxes paid, which will extract $15.5 million more from taxpayers who itemize).

The governor promised to avoid going into debt, make government operations more efficient, protect programs that actually produce benefits, and protect children.

After Shumlin dejectedly announced on December 17 the death of single payer health care, he is still inspired by the “vision of Act 48”. He has gone from proclaiming that “health care is a human right” to announcing that “health care is a public utility” to saying (as in Act 48) that “health care is a public good”. (All three of these characterizations are false.)

Instead of battling for “single payer” – a government controlled, taxpayer financed health care monstrosity – the governor will now devote his efforts to installing “all payer”. When coupled with “payment reform”, inclusive Accountable Care Organizations, and “global budgets”, “all payer” begins to look a lot like “single payer” all over again.

Shumlin announced his determination to reduce the infamous “cost shift” that drives private insurance premiums to unaffordable levels. The major culprit is Medicaid, which pays providers roughly 60% of their costs. The providers are obliged to cover this shortfall by jacking up health insurance premiums, which practice Shumlin candidly described as “a hidden tax”.

But where to get the dollars to cut the cost shift in half?  Gov. Shumlin has the answer: everyone earning a paycheck will be “asked” to cover part of the state’s chronic Medicaid underpayment.

This isn’t an “ask”, it’s a demand, in the form of a new state payroll tax of seven tenths of a percent. This will obviously be the opening rate for the much higher payroll tax rate needed to support “single payer”, or “all payer”, or whatever label will be hung on the next version of government health care.

Shumlin recognized that the burden of school property taxes has become an incendiary political issue. He fingered the “complex and archaic governance structure” of public education and promised to create new state-local “partnerships” to achieve state goals. He reiterated his commitment to “local control”, but redefined that as locals cooperating responsibly with their mandated “partner” in Montpelier. This new partner will make locals offers they can’t refuse, including mandating higher pupil to staff ratios and closing small schools. This “partnership” will be one more giant step in the direction of “One Big School System”.

Strangely, the governor who keeps inviting people to give him good ideas got through the entire address without ever mentioning “parents” or “choice.”

He did announce a promising initiative whereby students can get an Associate degree from Vermont Tech, with one year of dual enrollment, a summer internship, and a sizable contribution from the eventual Vermont employer.

Conspicuously absent from this governor’s delivered budget message was a frank analysis of why under his four-year administration state spending growth has cruised along at four times revenue growth. In fact, aside from pointing out the $94 million deficit, his speech gave scant attention to the reasons for this distressing budget performance.

A concise answer: economic performance lagging, spending outstrips revenues, can’t raise taxes, time to get serious about cutting back overgrown government.  Shumlin knows this. The question is whether he can get beyond rhetoric to make it happen, in face of furious opposition from his already resentful liberal supporters.

- John McClaughry is vice president of the Ethan Allen Institute (


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