Letter to House Ways & Means, Feb. 15, 2018

Posted by Paul Cillo on February 19, 2018 at 4:22 pm | * Comments (1)

Dear Representative Ancel,

I’m writing about the Ways and Means Committee’s work this session on education funding. I understand the challenges the committee faces in making changes to the system, and it appears that there is a lot about the plan that has not yet been worked out. Nevertheless, I want to share some thoughts about the plan so far based on Public Assets Institute’s analysis of the information the committee has posted on the Legislature’s website.

Income taxes: The plan proposes to replace Vermonters’ current option of paying school taxes on their primary residence based on household income with a statewide progressive income tax. The latest Tax Department data show that Vermonters paying school taxes based on income had household income of just under $7 billion in 2017...

New plan would cement property tax frustration

Posted by Jack Hoffman on February 16, 2018 at 12:02 pm | Comments (0)

In his annual letter to the Legislature the tax commissioner announced that a projected 3.9 percent increase in per-pupil spending next year was going to result in a 6.2 percent increase in the average homestead property tax rate. This is the kind of disconnect that really irks local voters and school officials alike.

There are reasons for next year’s big tax rate jump—more on that later. But here’s the thing: The education funding proposal being developed in the Vermont House would not end the frustration from modest spending increases that result in disproportionately larger property tax increases. In fact, these would become a permanent feature.

State Senate committee acts to reduce income inequality

Posted by Stephanie Yu on February 9, 2018 at 5:02 pm | Comments (0)

The Vermont Senate Economic Development, Housing and General Affairs Committee voted this week to increase the minimum wage. This is a big step forward for thousands of working Vermonters who need a raise and for the Vermont economy that needs a boost. And it’s a concrete action to reduce Vermont’s growing income inequality.

The Senate bill would bring the minimum wage to $15 per hour by 2024. If the full Senate and the House concur, this will put an additional $240 million in the hands of low-wage workers and bring them closer to a livable income. And it will put more money into the Vermont economy as these workers spend this money for their basic needs.

By any measure, the buying power of the minimum wage has been decreasing. Minimum wage growth has been less than growth in Vermont’s productivity, overall economic growth, the median wage, the cost of child care or housing, and much less than the growth of wages paid to those in the highest-paying jobs.

It’s definitely time for an increase.

House committee wants to scrap income sensitivity

Posted by Jack Hoffman on January 30, 2018 at 4:41 pm | * Comments (3)

A new education funding plan taking shape in the House Ways and Means Committee is being billed as a move toward simplicity and greater reliance on the income tax to support education. In fact, the plan appears to make the connection between school spending and taxes less transparent, and it will take Vermont back to the days when only wealthy communities could afford to pay the property taxes necessary to support a good education.

Currently, about two-thirds of Vermont resident homeowners pay income-based school taxes. Tax rates vary from town to town, depending on the education spending per pupil. But there is a direct relationship between the income-based tax rates and local spending.

Statement on Gov. Phil Scott’s Jan. 23, 2018 Budget Address

Posted by Paul Cillo on January 23, 2018 at 4:12 pm | Comments Off on Statement on Gov. Phil Scott’s Jan. 23, 2018 Budget Address

Gov. Phil Scott laid out an ambitious agenda for state government in his second budget address. He outlined many problems facing Vermonters today, and for the most part his assessment was accurate. The state does need to address drug addiction, retirement security, environmental protection, mental illness, affordable housing, energy efficiency, job creation, equal educational opportunities, and the many other issues he cited.

It is hard to see how he can achieve all this with a spending formula that ties the growth in the state budget to Vermonters’ wages. And while we applaud his proposal to try to recruit young families to settle in here, we have to wonder how many young parents are eager to move to a state where the governor says we’re spending too much on education and wants to reduce staffing in schools.

Along with the problems Governor Scott cited, Vermont—like the rest of the nation—also has a problem with income inequality. Wage growth has been stubbornly slow, while incomes for the wealthy have grown much faster. Linking state spending to wage growth can only exacerbate the problem. When wages aren’t keeping pace with basic living expenses, Vermonters need more support from their government, not less.

Testimony to Senate Education Committee, January 19, 2018

Posted by Paul Cillo on January 22, 2018 at 2:27 pm | * Comments (1)

Good afternoon Mister Chairman, members of the committee. My name is Paul Cillo. I’m the president of Public Assets Institute, a non-profit, non-partisan organization based in Montpelier that focuses on state fiscal and economic policy including education finance. Thank you for giving me the opportunity to talk with you today. Read more

Testimony to Senate Economic Development, Housing & General Affairs, January 17, 2018

Posted by Stephanie Yu on January 18, 2018 at 12:21 pm | * Comments (1)

Good morning, Mr. Chairman, members of the committee. Thank you for having me here today.

My name is Stephanie Yu.  I’m a policy analyst with Public Assets Institute here in Montpelier.  We’re a nonprofit, nonpartisan, public policy think tank that was established in 2003. Read more

A minimum wage increase will help, not hurt, Vermont

Posted by Stephanie Yu on January 12, 2018 at 1:22 pm | * Comments (2)
“The vast majority of the most rigorous modern research on the impact of higher minimum wages—including robust increases to $13 or more—shows that these policies boost worker earnings with little to no adverse impact on employment.” Testimony to the Minimum Wage Study Committee from Yannet Lathrop of the National Employment Law Project on November 21, 2017. In other words, there is no credible evidence that minimum wage increases cause significant job loss.

Another hit to Vermont workers

Posted by Stephanie Yu on December 12, 2017 at 4:27 pm | Comments Off on Another hit to Vermont workers

The Congressional tax plans aren’t the only policies in Washington that could make life harder for working families and the middle class.

Possible changes to the federal overtime rules may also take money away from thousands of Vermonters.  A new analysis by the Economic Policy Institute shows that 19,000 Vermont workers could lose a combined $3 million in overtime pay if the Trump administration rolls back a 2016 rule change updating who’s eligible. Read more

Cuts loom without additional revenue

Posted by Jack Hoffman on December 7, 2017 at 11:10 am | * Comments (1)

This is the 11th year in a row that Montpelier has projected spending obligations will exceed state revenue projections going into the start of the legislative session. Maybe it’s time to acknowledge that the state’s revenue system isn’t keeping up with even modest budget growth. Read more