Key lawmakers are balking at Gov. James Douglas’ proposal to fund his 10-year, $175 million college scholarship plan with money from the state’s share of the national tobacco settlement.
Promising
Feb 11, 2006
Gov. James Douglas has said he is perplexed about why his proposal to spend $175 million over 10 years on college scholarships has run into political opposition in the Legislature. He shouldn’t be.
Douglas’ proposal is a bold and significant effort to underwrite higher education for Vermont youngsters. He would use $130 million from the state’s tobacco settlement, plus about $45 million from the General Fund, over 10 years to provide scholarships of up to $5,000 per year. The first year, money would go to 1,000 first-year students, and each following year 1,000 first-year students would receive aid. Thus, by the fourth year, 4,000 students would be receiving the scholarship money.
At present the total undergraduate enrollment of the three state colleges and Vermont Technical College is 5,786. That means a high proportion of Vermont students would likely receive aid.
The amount of aid would be significant. Tuition at the Vermont State Colleges is in the range of $7,000 per year. To cut that amount by $5,000 for Vermont students represents a major contribution to higher education in the state. Tuition at the University of Vermont is $9,452. The new scholarship would cut that in more than half.
Room and board would remain an extra expense now figured at more than $6,000 at the state’s colleges and universities.
One-third of the scholarships would be distributed by the Vermont Student Assistance Corp. and could be used at public and private colleges in Vermont. Another third would go to the Vermont State Colleges, and another third would go to UVM. UVM and the state colleges would be able to apportion their scholarships to needs-based awards and awards targeting particular academic specialties. That way the schools could boost support for science, engineering or other fields seen as essential for progress in the state.
The scholarships are being offered as a way to keep young Vermonters in Vermont in order to boost the economy and counter the demographic trend toward an older population. If the students stay in Vermont for three years after leaving school, they would not have to pay back their scholarships.
So if this is such a positive program, why has it run into opposition in the Legislature? There are several reasons.
One has to do with Douglas’ political strategy in presenting the plan. He announced it at his State of the State address, and he made sure that the leaders of UVM, VSAC and the state colleges were there to trumpet their support. The proposal was presented almost as a fait accompli – a program of such obvious merit that to question it would seem churlish. It was a way of neutralizing potential opposition. Douglas has continued with a public relations campaign to sell his plan to the public even though the Legislature is only in the early stages of considering what amounts to an extremely costly proposal.
It took awhile for the Democrats to get their bearings in an effort to exercise independent judgment on the question. It is only natural for them to ask: Is this the best way to spend $175 million? It is a good way, no doubt. But is it the best?
Douglas portrayed the money as “found” money because no one had thought much yet about how to use it. But it’s not found money. It is money that will belong to the people of the state, and members of the Legislature have a duty to think hard about the best use for it.
One advantage to Douglas of his surprise proposal was that he could head off any other uses for the money that Democrats might dream up- such as for health care, which has been the Democrats’ focus.
Douglas is reluctant to see the money drain away down the hungry maw of the state’s health care needs, and he is right to discourage its use to plug up holes in the state’s ongoing health care budget. It is worth asking, however, whether there are any one-time needs for the health care system that would benefit from an infusion of money – such as information technology.
Sen. Susan Bartlett, chairman of the Senate Appropriations Committee, labeled Douglas’ plan “dead on arrival,” and she has offered up a much smaller college scholarship program that Douglas has labeled “mouse meat.” So the two are even on disparaging quips. Maybe a more constructive conversation will now begin.
So far, the governor has offered the most constructive use for the tobacco money, though it is hard to imagine turning off such a helpful spigot after only 10 years. It is likely the program would create a demand on state resources long into the future, and legislators ought to consider the question of the program’s longevity.
The Democrats found themselves on the defensive on the issue, and so far they have not countered with a program as positive as the Vermont Promise scholarships. That doesn’t mean that Douglas’ plan should not be subject to a searching examination.
Health care and higher education are both essential responsibilities for the state. Douglas’ strong push for the program has itself been a cause of resistance, as legislators seek to weigh their options. They have to satisfy their own questions about whether his plan is the best way to spend that enormous sum, but it is hard to deny that Douglas’ plan represents a significant potential contribution toward higher education in Vermont.
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Douglas scholarship proposal draws fire
Feb 1, 2006
MONTPELIER – Key lawmakers are balking at Gov. James Douglas’ proposal to fund his 10-year, $175 million college scholarship plan with money from the state’s share of the national tobacco settlement.
Sen. Susan Bartlett, the Lamoille Democrat who is chairwoman of the Senate Appropriations Committee, said Tuesday that offering scholarships for up to 1,000 college students a year is a laudable goal. But funding it with a 10-year boost in the money that state receives from the nation’s tobacco companies is not appropriate, she said.
“When the top priority of the government is to make the governor look good, it’s a complete failure of leadership,” Bartlett said. “This is not being fiscally responsible for Vermont.”
She and other Democrats said that when Douglas unveiled his Vermont Promise Scholarship program – which would provide up to $5,000 a year to students at the Vermont state colleges, the University of Vermont and the state’s private colleges in exchange for a promise to live here after graduation – he presented it as an opportunity to capitalize on the “surprise” bump in money from the tobacco settlement.
Rep. Floyd Nease, D-Johnson, the House majority whip, said “There are competing interests, like health care. It’s not like this money was a surprise. What’s surprising to me is that the governor thinks that everyone else thinks it’s a surprise.”
The bump – called the strategic contribution payment – is intended to compensate states like Vermont which spent a disproportionate amount of time negotiating the original $206 billion, nationwide settlement agreement.
The exact amount of the additional money is not yet known.
According to a 2005 Joint Fiscal Committee memo, the exact amount is subject to a host of variables, including the number of cigarettes sold in the state, inflation and other factors.
Douglas maintained that the opportunity is still there, and that using what he projects will be about $130 million in extra money for the scholarship program is good for the state’s long-term stability.
He insisted through his spokesman Tuesday that despite the criticism of Bartlett and other leading legislators, support for the proposal remains strong.
“The governor’s proposal has received broad bipartisan support,” said Jason Gibbs, Douglas’ press secretary. “Vermonters all over the state, including a majority of legislators, realize how very important it is to invest in the next generation of Vermonters.”
But before any scholarships are offered, the General Assembly has to approve using the tobacco money to fund it.
Historically, Vermont has used the tobacco settlement money for public health programs, including smoking cessation. It created a tobacco trust fund, and it has spent the money on Medicaid.
Vermont passed a law about 10 years ago that sought to reimburse Medicaid with tobacco money on the theory that the treatment of smoking-related illnesses cost the state up to $30 million a year.
Attorney General William Sorrell – one of the leaders in the national settlement – has been lukewarm at best to the scholarship proposal, and members of his office have testified that settlement money should continue to be spent on public health initiatives.
The state’s Tobacco Evaluation and Review Board, which advises the Legislature on how to appropriate the annual settlement payment, is expected to weigh in on the scholarship proposal by the end of the month.
The state now receives about $25 million a year from the settlement, amounting to more than $800 million over time.
A wide range of interests are lobbying for the scholarships, including UVM, the state colleges and even students, some of whom have received some lobbying tips from the public relations firm representing VSC Chancellor Robert Clarke.
In a brief interview Tuesday, Clarke said that while there is wide support for a scholarship program, “the real question is the funding source.” He said the program was a good use of the tobacco money.
“This is not money taken away from other funding sources,” he said. “The use of $13.5 million a year in 10-year, one-time funding is appropriate. College-educated people have better health habits.”
The administration has been making the same connection. Some of Douglas’ advisers have been pointing out in the past several weeks that people with a college education smoke less and are healthier.
Clarke noted there will be a fight for the extra tobacco money.
“Anytime that you have $135 million available, there will be competing interests,” he said.
Nease, the House whip, said the plan “will meet with the same challenges as any spending plan.”
He also called the proposal strategic.
“It’s probably a very clever political maneuver to put us in a position to choose between scholarships for students and health care,” he said.
Gibbs all but acknowledged that.
“The governor’s very confident that the Legislature will embrace this proposal because of the future of our state,” he said. “There’s no better investment that Vermont can make than to invest in our youth.”
First it must get by the appropriations committees. Bartlett said using the money to shore up the state’s teetering Medicaid program would be more appropriate.
At $13 million a year – considered an optimistic estimate by the Attorney General’s Office – the state could actually end up giving the deficit-plagued public health system $26 million a year through federal matching funds.
“The governor says that $13 million a year doesn’t make any difference in Medicaid,” Bartlett said. “I guess I disagree. You don’t leave poor people on the streets.”
Contact Darren Allen at darren.allen@rutlandherald.com.
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