State Stumbles Trying To Explain How 13%, 7%…Any Percent Is Not An Indirect Tax On State Employees

In testimony this morning in front of a joint Senate Government Operations/Economic Development hearing to discuss the status of the VSEA/State talks on a cost-savings measure, Secretary of Administration Lunderville was unable to clearly answer several requests by senators to explain why the State is OK asking state employees to take a 6%-13% percent wage and benefit reduction (which VSEA views as an indirect tax) but will not entertain raising taxes .5%-1% on Vermonters who earn $250,000 or more. Lunderville called it a "philosophical difference." What do you call it VSEA members?

Other Hearing Highlights:

  • VSEA Director Jes Kraus continued to urge lawmakers to accept the VSEA offer and look at finding additional savings through a nominal reduction in the State’s use of private contractors and temps, an early retirement incentive, or any of a host of other options available to lawmakers;
  • Sen. Vince Illuzzi (R-Orleans) asked Lunderville about the elimination of federally funded positions. Lunderville answered that it wasn’t just about the positions, but rather does the program receiving the federal money work;
  • Sen. Bill Doyle (R-Washington) asked Lunderville why the State wasn’t looking harder at trying to reduce the use of private contractors, saying a 5% reduction is not unreasonable; 
  • Sen. Doug Racine (D-Chittenden) urged Lunderville to accept the VSEA’s initial offer, reminding him that the position cuts hurt not only state employees but all Vermonters who depend on the services VSEA members provide. Racine also thanked VSEA members for making the offer, calling it a "very reasonable" proposal and labeling the State’s rejection  of it as "short-sighted;"
  • Senators Claire Ayer (D-Addison) and Tim Ashe (D/P-Chittenden) were the lead voices in questioning Lunderville about the State’s ease at cutting state employee wages and benefits but its reluctance to invoke even a minimal tax on the wealthiest Vermonters;
  • Sen. Janette White (D-Windsor) cautioned Lunderville about the RIF messages some state employees were already receiving from their bosses, saying it wasn’t right for them to be telling employees that "your job is gone." She added that even though parts of the VSEA offer are more a one-time savings than a sustained savings, the VSEA offer would at least buy all the parties time to determine what are sustainable cuts; and
  • Sen. Bill Carris (D-Rutland) told Lunderville he was not pleased with the way this whole process has played out, saying "we didn’t do this well."