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Veh Web Pres V9 24 08

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  • 1. Vermonters for Economic Health Present A View of Vermont’s Economic Health Vermonters for Economic Health PO Box 153 Essex Jct, VT 05453 www.vteh.org
  • 2. Who are Vermonters for Economic Health (VEH)?
    • VEH is a grassroots, non-partisan, citizen-led organization
    • Our Mission –
    • To Promote Economic Health
    • and
    • Fiscal Responsibility
    • in Vermont’s Government
  • 3. We’ll Examine . . .
    • Vermont’s:
      • Tax Burdens and Trends
      • Spending and Expenses
      • Job Growth
      • Demographics
      • Explore Potential Solutions
  • 4.
    • TAXES
  • 5. Why Should YOU Be Concerned? Source: State of Vermont Comprehensive Annual Financial Report FY 2002 – 2007; Consumer Price Index
  • 6. VT’s Tax Burden Ranking Combined State and Local Tax Burden - 2007 Source: The Tax Foundation; Bureau of Economic Analysis; Commerce Department 8 12.2 % Connecticut 9 11.9 % Nebraska 10 11.6 % New Jersey 7 12.3 % Wisconsin 6 12.4 % Hawaii 5 12.4 % Ohio 4 12.7 % Rhode Island 3 13.8 % New York 2 14.0 % Maine 1 14.1 % Vermont   11.0 % Total Rank State and Local Tax Burden State 48 8.5 % Tennessee 44 9.0 % S.Dakota 43 9.3 % Texas 42 9.5 % Wyoming 41 9.7 % Montana 50 6.6 % Alaska 49 8.0 % New Hampshire 47 8.8 % Delaware 46 8.8 % Alabama 45 9.0 % Oklahoma Rank State and Local Tax Burden State
  • 7. VT’s Tax Burden Ranking 10-year history Source: The Tax Foundation; Bureau of Economic Analysis; Commerce Department 7 11.6 % 2000 7 11.6 % 1999 5 11.9 % 1998 7 11.5 % 2001 7 11.3 % 2002 6 11.4 % 2003 3 12.8 % 2004 2 13.9 % 2005 1 13.9 % 2006 1 14.1 % 2007 Rank State and Local Tax Burden 13 34.4 % 2000 12 34.0 % 1999 9 34.4 % 1998 14 33.2 % 2001 14 30.7 % 2002 16 29.8 % 2003 5 31.1 % 2004 3 33.9 % 2005 3 34.8 % 2006 5 35.1 % 2007 Rank Fed, State and Local Tax Burden
  • 8. Every Revenue Source Is Being Squeezed Source: VT Department of Taxes
  • 9.
    • SPENDING
  • 10. How Does Vermont Spend its Revenues? Source: Vermont Comprehensive Annual Financial Report. Fiscal year ending 6/30/06. 75% of Revenues Go Towards Education and Human Services 39% 36% 7.5% 6% 5%
  • 11. How Has Various VT Government Spending Grown Recently? Source: Vermont Comprehensive Annual Financial Report. Fiscal year ending 6/30/06. Education, Police & Corrections and Human Services are growing almost 3 times higher than inflation, while Business and Job related expenditures shrink.
  • 12. Student Enrollment Down - Employment and Costs Up Source: Summary of the Annual Statistical Report of Schools (SASR) FY 1997 - 2006 Student Growth = -9.1%; Teacher and Staff Growth = +20.8% Students Teachers And Staff 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
  • 13.
    • JOBS
  • 14. Source: Public Assets Institute (In thousands) Private Sector Job Growth from 1990 - 2007 Since the 2001 recession there has been no Private Sector job growth in VT
  • 15. What Kinds of Jobs are Being Created? Government, Education and other Non-profit jobs do not add to VT’s Tax Base
  • 16. VT’s Job Problems Real or Imagined No job gains reported ... only “plans” for future jobs. Source: WCAX / BFP ‘07 Review on VT Business and BFP 7/19/08 Vt Jobless Rates Fall Slightly 75 ClearSource Vermont Pure - Randolph 24 Hillcrest Foods - Fairfax 204 Metro Group - Rutland 47 Neo-EMS (Nexus Customer Electronics) - Brandon 35 Sirloin Saloon - S.Burlington 35 Wausau Mill - Northumberland 180 IBM – (reduction in force in June 2008) 100 Vermont Tubbs - Brandon 55 KBA Printing - Williston Jobs Lost From 2007 – 2008 … 23 Vt Teddy Bear Co. - Shelburne 30 TD Banknorth Inc. – Various Locations 180 Specialty Filaments – Middlebury 20 Neo EMS – Brandon 60 Omya Industries - Proctor 35 Vermont Plywood LLC - Hancock 60 Northern Power Sys. - Waitsfield & Barre 112 Standard Register – Middlebury 1520 Total Job Losses 135 Qimonda – Williston 115 Dirigo Mill – Gilman
  • 17. What Vermont’s Public Assets Institute says …
    • “ Many of Vermont’s new jobs are low-paying service jobs.”
    • “ What is needed in Vermont are good-paying jobs that take full advantage of work force assets.”
    • “ This requires Government & Community leaders working together to develop an economic environment that makes the use of these assets a State Priority.”
  • 18. Vermont Jobs 2001 - 2008 Source: Public Access Institute, Montpelier, VT. The bottom line All of the net new jobs during this period were in the public sector. There are fewer private sector jobs now than there were in 2001. 4,600 54,200 49,600 Public Sector Jobs ** * Includes both for-profit and non-profit employers ** Includes federal, state, and local government employers (100) 252,600 252,700 Private Sector Jobs * 4,500 306,800 302,300 Total jobs Change April-08 April-01
  • 19. VT Has Many More Part-Time Workers Than The U.S. or NE Average Source: Economic Policy Institute analysis of Current Employment Statistics survey data. Many of these jobs are tourism-related with sub-standard pay and little or no benefits 38.2 20.1 28.8 Maine 36.2 20.5 28.1 Vermont 36.1 18.9 27.1 Massachusetts 35.4 19.1 27.0 Rhode Island 35.0 19.1 26.6 Connecticut 34.0 16.6 24.8 New Hampshire 29.6 16.3 22.4 United States Female Male All
  • 20. The Paradox of our Self-Fulfilling Prophesy
    • An Unsustainable Road – Vermont is replacing Private-Sector (taxpaying) business with Government and Non-profit (non-taxpaying) entities …
    • The Result – greater tax burdens on a shrinking private-sector economy and residential property owners …
    • and – Vermont’s Legislature steps in with social assistance to fill this void.
  • 21.
    • DEMOGRAPHICS
  • 22. VT’s 2007 Gross Domestic Product Source: Vermont Economic Newsletter July 288, Page 3 How often do we hear that Vermont relies heavily on Agriculture? 1.5 Agriculture 3.0 Utilities 2.1 Transportation 1.7 Private Education 16.5 Other small sectors, including Real Estate % Industry Segment 4.5 Construction 4.4 Hotel / Restaurant 4.1 Information Management 8.0 Professional / Technical / Administrative 5.9 Finance 4.8 Wholesale 8.3 Retail 10.0 Health Care 11.5 Manufacturing 13.7 Government
  • 23. VT’s Population Growth Less Than Half of the National Average
  • 24. Who Is Going to Support the Ever Expanding “Safety Net” When You Are Retired? Source: U.S. Census Bureau
  • 25. Vermont’s Demographic Crisis
    • Vermont’s young people (age 19 - 29) leave VT at a rate higher than the national average (7 th in net out-migration).
    • Vermont has one of the lowest birthrates in the U.S.
    • In 2005, Vermont became the 2 nd oldest state in the nation.
    • Vermont’s share of people aged 25-29 was the lowest in the nation, while its share of people aged 50-54 was the highest.
    Sources: U.S. Census Bureau, Vermont Economy Newsletter, New England 2020 Report
  • 26. The Bottom Line is Simple …
    • We Have Lived Beyond
    • Our Means
    • Far Too Long
  • 27. SOLUTIONS
  • 28. Vermont’s Solutions…
    • Identify the problems
    • Change the culture
    • Grow the “Pie”
    • Contain spending
    • Remove obstacles to private sector job growth
    • Elect forward-thinking Public Officials who represent your priorities
  • 29. Identify the Problems
    • As detailed in this presentation and other credible studies, the problem facing Vermonters is a “Perfect Storm” of …
      • Spending outpacing Revenue
      • Anemic private sector job growth
      • Unsustainable rise in Vermonters’ tax burdens
  • 30. Change the Culture 
    • Tax payers and voters  become knowledgeable of VT’s deteriorating economic health
    • ‘ Silent majority’  get involved ( Does the Legislature reflect what most Vermonters think? )
    • Montpelier  refocus on the average, hard-working, middle class Vermonter.
    • Lawmakers  recognize that economic growth = jobs = increased tax revenues = ability to support non-economic objectives (e.g., social safety net, environmental imperatives, etc.)
  • 31. Grow The “Pie”! 
    • Being attentive to Vermont’s Economic Health and Growing Private Sector Jobs enables us to:
      • Support the most vulnerable members of our community
      • Provide opportunities which keep our children and grandchildren in Vermont
      • Be good stewards of the environment
      • Broaden the tax base and ease the burden on low income Vermonters and those living on fixed incomes
      • Create meaningful opportunities for those who want to work hard to create a better life for themselves and their families
  • 32. Contain Spending 
    • Persistent spending 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. 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.
  • 33. Remove Obstacles  to Private Sector Job Growth
    • Regulation and permitting, when excessive, has negative consequences:
      • It raises the cost of everything from housing to the premiums you pay for health insurance
      • It makes it difficult for local businesses to compete with more business-friendly locales which leads to fewer job opportunities and fewer goods purchased locally
      • It requires greater bureaucracy to maintain, which diverts much needed funds away from the most vulnerable members of our communities
  • 34. Elect Forward-Thinking Public Officials 
    • Vermonters For Economic Health seeks to:
    • Recruit candidates of all affiliations for this fall’s Statewide elections who recognize the current crisis and will prioritize VT’s Economic Health when in office
    • Offer financial support to candidates who share these views
    • Create a voting block of concerned citizens who recognize that only through organization and unity can meaningful change occur
  • 35. What Can You Do? 
    • Sign the Petition – www.VTEH.org - there is strength in numbers!
    • Vote – this fall and encourage others to do the same
    • Contribute to the VEH Political Action Committee (VEH-PAC) – VEH will support legislative candidates who agree with our mission and have signed the VEH Candidate Economic and Fiscal Pledge
    • Run for Office – We cannot change the current culture in Montpelier without changing the composition of the Statehouse
    • Write Letters to the Editor – expressing your concern with the direction VT is headed
    • Write State Legislators – and let them know that their priorities are not YOUR priorities
    • Refer others – neighbors, co-workers, friends and family to our Web site so they can view this presentation and sign the petition
  • 36.
    • “ I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”
    • Winston Churchill
    www.vteh.org