Vermonters for Economic Health Presents “ The Truth You Need To Hear” “ The multitudes remained plunged in ignorance of the simplest economic facts, and their leaders, seeking their votes, did not dare to undeceive them.” - Winston Churchill
Who are Vermonters For Economic Health (VEH)? VEH is a grassroots, citizen-led organization. Our mission is simple: To promote economic health and fiscal responsibility in government.
In 8 years, Medicare & SS go cash-flow negative; In 20*, all Revenues go to Entitlements & Debt Federal Spending As a Percent of Gross Domestic Product *Data before Medicare’s Prescription Drug Benefit implementation. Source: GAO’s March 2002 analysis Federal Revenue Line Our Children’s Future; Our Legacy to them Spending Worker/Retiree Ratio: 4.9 2.8 This piece gets eaten up by the Prescription drug benefit. An over $50 trillion projected entitlement deficit.
The Effect of Medicare’s new Prescription Drug Program …
As the next chart will show…
Costs shifted from Private Insurance, Out-of-Pocket and Medicaid to...
Exacerbating an already Exploding Entitlement Cost Crisis…
% Sources of funds for retail prescription drugs
The U.S. dollar has fallen in value roughly 50% against the Euro & other major currencies since 2002; a major contributor to our rise in oil prices.
Our national debt stands at about $10 trillion; almost half of which is owned by foreigners; aiding in the continued decline of federal assistance to the states.
The value of hydrocarbon exports from the Middle East and Central Asia is expected to approach $750 billion in 2008. - This is almost Four-Times the level in 2001; a shifting world power is occurring before our eyes; Sovereign Wealth Funds are an example.
Changes in the Price of Oil, in Dollars, Euros & Gold $100/Barrel Oil $57/Barrel Oil $30/Barrel Oil The value of the dollar is the market’s measure of its confidence that our government will preserve the purchasing power of its debt, almost half of which is held Overseas. Bloomberg/WSJ 1/4/08 Had the dollar remained “as good as gold” since 2001, Oil today would be selling at $30 a Barrel, not $100. Had the dollar remained as strong as the Euro since 2001, Oil today would be selling at $57 a Barrel, not $100.
Where Vermont Generates Its Tax Revenues 30% 20% 15% Source: Vermont Comprehensive Annual Financial Report. Fiscal year ending 6/30/06. Total Revenues were approximately $3.8 billion 12% 12% 8% 3%
Why Should You Be Concerned? Source: State of Vermont Comprehensive Annual Financial Report FY 2002 – 2007; Consumer Price Index VTs gov’t payroll & employee benefit costs grew 70% since 2000. (BFP 3/19/08) School spending has grown from $813 million in 1999 to $1.3 billion in 2007”; a 60% increase. - R. Herald, 2/1/07
VT’s Tax Burden Ranking Source: The Tax Foundation; Bureau of Economic Analysis; Commerce Department Vermont Is Now the 3 rd Most Taxed State In The Nation (1 = Highest Burden) 3 2006 3 2005 5 2004 16 2003 14 2002 14 2001 13 2000 Tax Burden Rank Year
The Gap Between Vermonters’ Taxes and the Average American’s is at a 28 Year High The difference between VT’s 13.2%* share and the national 11.3% share amounts to $372 million more in VT taxes, or $1,500 per household , than if our taxes were at the national average. * Increased further to 14.9% in 2007. Based on 2005 data. Source: The Vermont Economy Newsletter and The Tax Foundation
Every Revenue Source Is Being Squeezed Source: VT Department of Taxes
Cumulative % of Income Taxes Paid: By Income Level & Number of Filers 26% of Taxes Paid, 2,113 Tax Filers; 0.69% of Filers 38% Paid, 6,970 Filers; 2.29% 49% 15,200; 4.99% 98% 185,534; 61% 60% 27,632; 9.08% 75% Paid 58,415; 19.20% 91% Paid 121,827; 40.04% 100% 304,254; 100% Source: Vt. Comprehensive Annual Financial Report, 2007 $75,000 & up pay 60% of Taxes Start here, move clockwise … Top 5% pays about 50%
% Share of State Income Taxes Paid by Income Level $300K & More $150- $300 $100- $150 $75- $100 $50- $75 $10- $25 $25- $50 $10K & lower Out of State Source: Vt. Comprehensive Annual Financial Report, 2006 Data from Taxable Year 2005 Vt’s Public Assets Inst. found a net loss of folks in 2006; yet the incomes of those coming in were 18% higher vs. those who left. (BFP 3/24/08) The % of $75,000 & up filers has doubled While the lower end has fallen How long can this trend last?
Rather than create jobs & its wealth effect , Vermont imports its wealth through the importation of wealthy people. Thus, Vermont creates its own income-disparity as it redistributes that wealth.
Social Mobility is obstructed and prevented – No need for Job Creation. No Opportunities…
Ultimately creating a ‘Voting Block of Dependents’ and the kind of “Class-Warfare” of the ‘haves’ and ‘have-nots’ that politicians can then run on. Culminating in John Edward’s “Two Americas” scenario.
How Does Vermont Spend its Revenues? 39% 36% 75% 7.5% 6% 5% Source: Vermont Comprehensive Annual Financial Report. Fiscal year ending 6/30/06. 75% of Revenues Go Towards Education and Human Services
How Has Various VT Government Spending Grown Recently? Source: Vermont Comprehensive Annual Financial Report. Fiscal year ending 6/30/06. * A 2003 Census study showed VT has about 50% more state employees per capita than the national average.
Student Enrollment Down - Employment and Costs Up Source: Summary of the Annual Statistical Report of Schools (SASR) FY 1997 - 2006 1997: Act 60 Implementation Student Growth = -9.1%; Teacher and Staff Growth = +20.8% 106,341 96,636 15,783 19,069 94,000 96,000 98,000 100,000 102,000 104,000 106,000 108,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 15,000 16,000 17,000 18,000 19,000 20,000 Students Teachers and Staff
VT’s Student : Teacher Ratio Is Now The Second Lowest In The Country Source: U.S. Department of Labor NCES Publication 2007-352
“ A report, prepared by the Legislature's fiscal analysts for the House Transportation Committee, predicts that at current funding levels, the state will face an annual budget shortfall of $203 million for maintaining its transportation system.”
“ Over the next 30 years, the state could face an overall shortage of $6 billion in transportation revenue, according to the report.”
- Times Argus, 1/13/08
VT Taxpayer’s Looming $3.5 Looming Liabilities $451M $1.3B $ 451 M $400M $90M $75M $43M $18M $161M $200M $45M New Highway Const. Projects include the Circ, Bennington & Morrisville Bypass. See Web Site for details on all projects. $300M $1.3B $438M $451M $438M $400M $300M $200M $161M $90M $75M $45M $43M $18M $38M $38M $3.6B
2007 Year-End Review of Vermont Business Jobs Lost MetroGroup - Rutland 200 Dirigo Mill - Gilman 115 Qimonda - Williston 135 Standard Register - Middlebury 112 Omya Industries - Protor 50 Vermont Plywood LLC - Hancock 35 Northern Power Sys. - Waitsfield & Barre 60 TD Banknorth Inc. – Various Locations 30 Specialty Filaments - Middlebury 180 Neo EMS - Brandon 20 Wausau Mill - Northumberland 35 Total Job Losses 972 No job gains reported; Only “plans” for future jobs. Standard Register was acquired by Connor Homes; 65 of the 112 jobs returned . Specialty Filaments was acquired by Monahan; about 120 of the 180 lost jobs returned. Source: WCAX’s / BFP ‘07 Review on VT Business
Source: Public Assets Institute Since 2001’s recession, private sector job growth in Vermont has essentially been 0% . (In thousands) Question: What Was VT’s Private Sector Job Growth From 2000-2006?
VT’s Population Growth Is Less Than Half of the National Average
VT Retirees Double In 25 Years While The Work Force Shrinks Over 65, (Retirees) Age 6-18, (school age) Total Population Age 20-65, (working age) Source: Center for Research on Vermont, Art Woolf. (Indexed to 2000 = 100)
Persistent spending at 2-3 times above the average Vermonter’s income growth is unsustainable and irresponsible
You would be jeopardizing your own future if you conducted your own affairs this way, so why elect public officials who endorse this behavior?
Encourage a reversal of the decision making process: Instead of deciding what is needed and then how we can afford it, let’s decide what we can afford and then make the difficult decisions required to allocate the available resources