All we’ve heard from Montpelier this year, from the governor to legislative leaders, is that Vermont has a spending problem, not a revenue problem. A new analysis by the Joint Fiscal Office (JFO) shows this conventional wisdom is wrong.
The JFO data show state spending has gone down as a percentage of the economy over the last 10 years.
Vermont’s gross state product—the sum of all the goods and services produced and sold—is growing again. We are essentially tied with Massachusetts for having the fastest growing economy in New England since the bottom of the recession in 2009. Read more
Vermont’s income tax is among the lowest in the country: 2.7 percent of the state’s total personal income.1 Eliminating tax breaks and lowering income tax rates would balance the fiscal 2016 budget without cuts and still leave Vermont’s effective income tax rate lower than those of 24 other states.
Despite the high rates that filers see on their state income tax returns, Vermonters pay less than taxpayers in most states. That’s because Vermont provides so many tax breaks. As a percentage of total personal income Vermont’s income tax is the 13th lowest among the 44 states that impose an income tax. Read more
Vermont’s elected leaders face another projected budget gap as they work to fund state services for fiscal 2016. They blame the gap on structural problems: a mismatch between the growth in revenues and the growth in spending. The prevailing response has been more budget cuts, which is mostly how they’ve addressed budget gaps for the past decade.
But cutting the budget year after year does not address the underlying causes. It simply shifts costs—onto property taxes or health insurance premiums, for example—and leaves more and more Vermonters without needed state services. Read more