January 8, 2009 Douglas: Realities of crisis demand immediate action Play video

(NECN: Montpelier, VT) - Governor Jim Douglas was sworn in for a fourth term Thursday. In his inaugural address, he said the the costs for Vermont's public education system have gone through the roof over the past years. Douglas called for a reform of school funding to deal with the current economic crisis.

He also says the state needs to cut spending on Medicaid. He wants to accomplish this by cutting back on covered services, rather than removing people from the rolls.

Gov. Douglas calls for changes in education, Medicaid

Douglas: Pride does not excuse us from changes

The following is prepared text of Governor Douglas' inaugural address:

The first element of protecting the most vulnerable is to ensure the near-term solvency of benefit programs, while working to create sustainability in the long-term. Our first of its kind Global Commitment to Health waiver was a major milestone in addressing our challenges in the Medicaid budget. But even with Global Commitment, caseload increases outpace resources with a bigger and bigger portion of the state budget needed to fill the gap.

Although our federal partner in Medicaid is expected to help with increased funds through the economic recovery

package, that alone will not ameliorate increasing pressures on the human service budget. We must take immediate steps to set this vital network of programs on a sustainable path.

Right now 25% of Vermonters receive some form of Medicaid assistance, among the highest percentages in the nation. There are principally two ways to make Medicaid sustainable: either we can exclude populations above a certain income level and eliminate their services, or we can realign benefits and share costs to fit responsible budgets. To me, the option of eliminating health care coverage for many Vermonters in order to preserve a generous benefit for a few is unjust in such a challenging time. The philosophy of sharing the sacrifice broadly must be part of any proposal we advance.

We must also guarantee that each dollar is spent with a focus on quality of life and the goal of future independence.

Our efforts to provide a healthy lifestyle discount in the private health insurance market should be mirrored in our Medicaid program. Encouraging Vermonters to make better choices when it comes to their health and well-being is a critical component of our innovative health care reforms, and the Vermont Blueprint for Health is the cornerstone of these efforts. We should align Medicaid with these goals and work to reward beneficiaries who eat nutritiously, stay in shape and live a clean life, free from drugs and smoking. By offering lower premiums for healthy choices, we can provide a tangible incentive to empower Medicaid recipients to take responsibility for their own well-being and, at the same time, lower health care costs.

While the vast majority of beneficiaries and providers in our human services network are honest, we have all heard stories about some who exploit the system. Such unscrupulous acts threaten to shortchange those most in need. I have asked the Agency of Human Services to review the state's response to those who falsify information to obtain government benefits or payments, including consumers who abuse prescription drug benefits. At a time when we are forced to consider significant cuts to programs, we must look for ways to guarantee that the programs we have are serving only those Vermonters for whom they were intended.

It is reasonable for the state to ask beneficiaries to assist us in enhancing their individual health and welfare. We must focus our assistance, invest in Vermonters, and ensure we are building transformational bridges: from poverty to economic success; from chronic illness to health; from drug dependence to independence. That's the covenant: the state provides assistance and beneficiaries work to amplify the state's investment and improve their lives.

Although common-sense changes to our human service programs are vital, there is no substitute for a good-paying job to bring real renewal into an individual's life. While it's hard to think about creating jobs as businesses close and lay off employees, now is the time for us to redouble our efforts to support existing companies, encourage entrepreneurship and attract new employers by transforming our economy to meet the demands of the 21st century.

During the fall I introduced a series of proposals - an Economic Growth Plan - to make our state more competitive and position Vermont to be on the first wave of recovery. As the economy continues to soften, it is important that we act to enhance our economic development efforts and pass this practical plan in the first 100 days of the session.

Many of the principles that bind these proposals together are shared across the political spectrum. We understand the value of renewable, clean and affordable energy. We've seen the power of information and the potential of technology. And we know that in a rapidly changing economy, our ability to grow and attract innovative, emerging industries will be the difference between success and failure.

That is why I have called for the development of Green Growth Zones to join commercial, residential and renewable energy facilities together in an arrangement that benefits an energy producer with access to a ready market, and benefits businesses and individuals with reduced rates for clean power. And that is why it makes sense to provide greater regulatory certainty to assist in the creation of a Smart Grid for Vermont.

As part of last year's Economic Growth Initiative, we provided a higher level VEGI incentive to green industries. By expanding this successful program to technology-based employers, such as software developers, we can encourage growth in this fast moving sector of our economy.

Whether it is a more fuel-efficient car or a breakthrough in biomedicine, Vermont must aspire to be the home of innovation and invention. By enticing entrepreneurs through the Vermont Innovation Challenge, we can help meet the needs and employment potential of our workforce.

As I travel Vermont and talk with employers, too often I hear the same stories about the time, expense and uncertainty of obtaining necessary permits and approvals to begin a project to grow their companies.

I believe that some in Vermont have lost sight of what a permit application really means. It is easy to characterize applications in the negative: this project will add that much traffic or require this much mitigation.

But to me, a permit application really says something very positive.

It says, "I'm hiring."

It says, "I'm prepared to make an investment in Vermont."

It says, "I'm ready to put down roots in this community and create jobs."

For many Vermonters what that permit application really means - above all else - is the difference between checking in for work and waiting for an unemployment check.

When an employer has made the commitment to grow responsibly in Vermont, we must make the commitment to speed the process from permit application to shovels in the ground.

Over the years, we have advanced reforms to parts and pieces of the process, sometimes with success - as we had five years ago in streamlining appeals - but most often without closure. The current system remains a labyrinth, fraught with unpredictability, which threatens job creation for years ahead - unless we are prepared to make substantive changes that will modernize the system.

As we strive to protect that which is so special about Vermont, we must recognize that a "working landscape" requires Vermonters to be actually working - not simply admiring the view.

We must preserve and strengthen our gold standard of environmental protection, but we can do so while making it easier for companies to invest in Vermont and grow with certainty. We can build a better, more practical system based on clear guidelines, professional assistance, a good dose of trust and strong penalties for non-compliance.

I propose we broaden Act 250 so proposals are not only judged on impacts, but also on the positive economic, social, or cultural benefits that may flow from a project into a community or region.

We must bring greater predictability to all interested parties by ensuring that once you've obtained your permit from an agency of state government, that permit will not be challenged in an Act 250 proceeding.

Further, we must expedite the chilling and costly effect of our lengthy appeals process by instituting "on the record review" - one formal hearing, where all evidence is submitted and examined.

Finally, we must expand the use of the self-certifications, general permits and permits by rule that are now used in stormwater, air pollution control and other programs. Instead of complex front-end regulation, we can provide clear guidance to businesses and trust them to design appropriate systems with the help of a recognized professional, obtain a general permit, and move towards better and faster construction.

Businesses will not be let off the hook from environmental protection. Non-compliance will bring costly penalties, motivating developers to complete legally and environmentally sound projects. Furthermore, self-certification will allow agency staff to spend more time in the field ensuring compliance, rather than micro managing proposed permits upfront.

I have directed the Secretary of Natural Resources to examine every permitting program within the Agency, identify those for which self-certification and other strategies make sense, and design approaches for each.

By creating a more responsive regulatory process we will uphold our cherished environmental standards and at the same time allow our state to grow and thrive.

In the short term, however, the extraordinary realities of the current economic crisis demand immediate action. I have asked my administration to work with the legislature and others to create the Vermont Economic Response Team, which will marshal all available public and private resources to assist companies at risk. Similar to the Fuel and Food Partnership model, the Response Team will cut through red tape, expedite the deployment of resources and examine temporary measures to help a business that is in trouble. When Vermont companies are in distress, I want to be absolutely sure that we do everything possible to help them weather this storm.

Agriculture and forest products remain pillars of our rural communities and, like other industries, are struggling.

Unfortunately, we expect the price of milk to drop significantly this spring. Although there is little the state can do to insulate dairy farmers from the volatile national milk pricing system, especially during these lean fiscal times, the Agency of Agriculture has been working closely with counterparts in New York and Pennsylvania, and the northeast dairy cooperatives to offset falling milk prices.

We will continue to work diligently with our congressional delegation to explore all options to help our traditional industries survive a difficult economic climate in the coming year.

While education, social services and jobs are all vital to the future of Vermont, the safety of our children trumps all else. The tragic events of the last year are a sobering reminder that more must always be done to keep violent sexual predators off our streets and away from our children.

I am confident that we can work together to quickly pass a comprehensive package of laws that focus on prevention, strengthens investigations and prosecutions, requires stiffer sentencing - particularly a 25-year mandatory minimum sentence - and enhanced supervision for sexual offenders. We have no time to waste in ensuring that law enforcement, the courts, families and communities have the tools they need to keep the children of Vermont safe.

I would like to take a moment to address the more than 8,000 Vermonters who work in state government and make this $4.3 billion enterprise run. State government remains the most far-reaching organization in the state. And now more than ever, our fellow Vermonters need us to lead by example - to find in every department, in every division, new ways to generate economic activity and ensure that those who most depend on our services receive them. I know you don't always receive the credit you deserve, but your work has a tangible impact on the lives of those you serve. And I am confident that at day's end the work we do will help our state emerge quickly and strongly from this downturn.

For the moment the clouds of recession have obscured our view of a more prosperous future. The task ahead is difficult and demanding, but Vermont will succeed. We will achieve our goals and realize the full potential of a people whose legacy is the diligence of its industry and the inspiration of its innovation.

Today, as our will commands, Vermont moves forward.

We will move together, past old ideas and embrace new solutions. We will address our challenges directly and completely. We will re-balance and strengthen our system of education, secure our social safety net and, most importantly, we will create a new, lasting framework for sustained growth.

Today, we inaugurate new ideas and real solutions to restore our economic security, awaken our optimism and produce new opportunities.

When this work is complete, and when the clouds of recession lift, we will look back at this session of the General Assembly as the moment we ushered in a new era of prosperity in our state's history.

God bless each you and the great state of Vermont.