Blog – Public Assets Institute http://publicassets.org forward thinking for Vermont’s common good Fri, 24 Mar 2017 20:18:05 +0000 en-US hourly 1 Unemployment nears its lowest in four decades http://publicassets.org/library/publications/unemployment-nears-its-lowest-in-four-decades/ http://publicassets.org/library/publications/unemployment-nears-its-lowest-in-four-decades/#respond Fri, 24 Mar 2017 20:18:05 +0000 http://publicassets.org/?p=11267 On average, 3.3 percent of Vermont’s labor force was officially unemployed in 2016. The average annual rate has dropped below this level only three times in the last 40 years: to 3.0 percent in 1988 and 1999 and 2.8 percent in 2000. Read more

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F1-MJB092On average, 3.3 percent of Vermont’s labor force was officially unemployed in 2016. The average annual rate has dropped below this level only three times in the last 40 years: to 3.0 percent in 1988 and 1999 and 2.8 percent in 2000. Last month Vermont’s jobless rate fell to 3.0 percent.T1-MJB092

 

 

 

 

In Chittenden, more workersF2-MJB092
Vermont has struggled to regain employment since the recession. In the last 10 years Chittenden County has added workers—more than 8,000, a rise of nearly 10 percent. But this increase was overwhelmed by losses in the rest of the state as a whole, where the number of people working fell by more than 18,000, or about 7 percent. This includes Franklin County, the only county besides Chittenden that saw growth.

 

 

 

Faster income growth, tooF3-MJB092
Coming out of the recession, Chittenden County saw somewhat greater income growth than the rest of the state. Adjusted gross income for residents of the county rose 22 percent from 2006 to 2015, the latest year for which the Vermont Tax Department has data. Elsewhere in the state incomes rose just over 19 percent during the same period.

 

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Another attempt to lower property taxes by raising them http://publicassets.org/blog/another-attempt-to-lower-property-taxes-by-raising-them/ http://publicassets.org/blog/another-attempt-to-lower-property-taxes-by-raising-them/#comments Wed, 22 Mar 2017 15:40:11 +0000 http://publicassets.org/?p=11264 It should be obvious by now: You can’t provide property tax relief by raising property taxes. In fact, it should have been obvious long before now.

Yet that is exactly what the Legislature included in Act 46, the school consolidation bill, in 2015. (It then repealed that provision in 2016.)

And that is exactly what the House Education Committee is proposing again this year. The committee voted on Friday to introduce a committee bill (H.509).

This latest attempt at property tax relief would increase taxes for about half of Vermont towns—the half that has the highest property taxes already—and lower taxes for the towns that have the lowest property taxes.

Seriously. I’m not making this up.

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It should be obvious by now: You can’t provide property tax relief by raising property taxes. In fact, it should have been obvious long before now.

Yet that is exactly what the Legislature included in Act 46, the school consolidation bill, in 2015. (It then repealed that provision in 2016.)

And that is exactly what the House Education Committee is proposing again this year. The committee voted on Friday to introduce a committee bill (H.509).

This latest attempt at property tax relief would increase taxes for about half of Vermont towns—the half that has the highest property taxes already—and lower taxes for the towns that have the lowest property taxes.

Seriously. I’m not making this up.

Twenty years ago Vermont got away from its parochial funding system, where each town was largely responsible for paying to educate its own children. The current system recognizes that we’re all responsible for educating all of the state’s children. So all of our education resources are pooled into the Education Fund, and all communities have equal access to that funding pool based on the same set of rules.

The property taxes that go into the Education Fund come from non-residential property based on a single, uniform rate statewide ($1.535 per $100 of fair market value this year) and from primary residences with tax rates determined by each town’s education spending per pupil. The homestead tax rates are the same in towns with the same per-pupil spending, and the rates are proportional throughout the state—that is, a town that spends 20 percent more per pupil than a neighboring town will have a 20 percent higher homestead tax rate.

The current system provides children with equal access to educational resources, and because tax rates are tied to per-pupil spending, it discourages unnecessary spending. Higher spending per pupil results in proportionally higher tax rates, and lower spending per pupil results in proportionally lower tax rates.

H.509 would do away with this proportional system for homestead taxes. Instead, it would create two groups of towns: one below an arbitrary spending threshold and one above. The group below the threshold would have a single, uniform tax rate and receive a fixed amount per pupil—initially about $12,500.

Towns in the second group—those that spend more than $12,500 per pupil—would receive the $12,500 per pupil at the uniform rate and also be in a separate sharing pool. As with the current system, they could expect their tax rates to go up as they spend more per pupil. The ultimate tax rate calculation, however, would depend on how many towns and which towns were in the separate sharing pool.

Vermont had a system like this in the late 1990s and early 2000s. The separate sharing pool was known as the “shark pool.” It proved unwieldy, unpredictable, and confusing, and the Legislature wisely scrapped it in favor of the simpler, proportional system we have now.

We all have a stake in seeing that all children in the state get a good education. H.509, by pitting one group of towns against another, undermines this fundamental feature of Vermont’s school funding system.

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State can help Vermonters save for retirement http://publicassets.org/blog/save-for-retirement/ http://publicassets.org/blog/save-for-retirement/#comments Wed, 15 Mar 2017 12:43:52 +0000 http://publicassets.org/?p=11255 Most Vermonters do not have a big enough nest egg for retirement. In fact, for many, the nest has no egg at all. And the problem is worst for women and people of color. These were just some of the findings in a report released earlier this year by the Vermont Public Retirement Study Committee. Read more

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Most Vermonters do not have a big enough nest egg for retirement. In fact, for many, the nest has no egg at all. And the problem is worst for women and people of color. These were just some of the findings in a report released earlier this year by the Vermont Public Retirement Study Committee.

As Public Assets documented in A Framework for Progress: Investing in Vermont’s people, infrastructure and good government, there are many barriers to saving for retirement. Nearly half of working Vermonters do not have access to an employer-based plan, people often do not enroll in plans on their own, and stagnant wages make it a struggle for many employees to save.

To address this challenge, Vermont has been exploring a state-sponsored retirement plan for the past few years. Eight states have already enacted legislation putting plans in place, and 17 others are exploring the possibility. In January the committee, led by Vermont State Treasurer Beth Pearce and including representatives from the business community, endorsed a state-sponsored retirement plan that would be voluntary for employers and employees and would allow employees to save through automatic, non-taxable payroll deductions.

Vermonters could see a real improvement in retirement security if the state adopted this plan. More than 100,000 Vermonters would gain access to a retirement plan. The benefits of large publicly managed retirement systems like those serving state employees or teachers are clear: They typically have lower fees and get better returns on their investments than individually managed accounts.

And increased economic security in retirement for individuals is good for the state. Instead of falling into poverty and needing additional public services as they age, financially secure retirees boost the economy by increasing the tax base and consumer spending.

Vermont and other states are taking steps to address the retirement savings problem despite the U.S. House’s recent action that would undermine these efforts. The state can and should continue to move ahead with this plan to make it easier for Vermonters to save for retirement. This is a classic example of government stepping in to correct a market failure that is hurting Vermonters.

Enacting the recommendations of the Public Retirement Study Committee is a low-cost, high-return way to improve the lives of thousands of Vermonters. The Legislature should act this session to advance the development of Vermont’s state-sponsored retirement plan.

 

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We can’t afford more giveaways to high-income Vermonters http://publicassets.org/blog/giveaways-to-high-income-vermonters/ http://publicassets.org/blog/giveaways-to-high-income-vermonters/#respond Thu, 09 Mar 2017 17:01:30 +0000 http://publicassets.org/?p=11241 Each year the governor and Legislature go through the handwringing exercise of closing a projected state budget gap. The projected General Fund gap for fiscal 2018 is about $70 million.

As usual, much of the conversation has been about reducing spending to get the budget to balance. Read more

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Each year the governor and Legislature go through the handwringing exercise of closing a projected state budget gap. The projected General Fund gap for fiscal 2018 is about $70 million.

As usual, much of the conversation has been about reducing spending to get the budget to balance. This year the governor wanted school districts across the state to cut their budgets; he’d use the savings not to lower property taxes but to help fill the General Fund hole. The House would cut General Fund expenditures rather than put more pressure on school districts and property taxes.

But so far, the budget cutting by both the governor and Legislature has held harmless a whole category of state spending: tax expenditures. While so-called appropriated expenditures—actions by the Legislature to spend money—are subject to annual scrutiny by the House and Senate Appropriations Committees, tax expenditures do not require legislative action each year.

Tax expenditures are “statutory provisions which reduce the amount of revenue that would otherwise be collected in order to encourage a particular activity or to limit the amount of taxes collected from groups of individuals,” according to the Vermont Tax Department and the Legislature’s Joint Fiscal Office, in this year’s issue of their biennial tax expenditure report. “Tax expenditures have essentially the same fiscal effects as direct government appropriations.” That is, both reduce the amount of money in state coffers.

Yet year after year, the governor and Legislature have been choosing to pare back programs and services that benefit all Vermonters. Austerity budgeting has delayed the cleanup of Lake Champlain for decades; it reduces funds to take care of veterans or adequately fund public education. Meanwhile, the state gives away tens of millions of dollars in state income tax expenditures annually to the highest income Vermonters.

Gov. Phil Scott talks about how Vermonters are facing a crisis of affordability. That’s true for many. Most Vermonters’ incomes have been stagnant since 2000 even as the costs of essentials—health care, housing, child care, college—have increased by double digits. Officially, we’ve recovered from the Great Recession, but many Vermonters have not felt it. That’s because more than 40 percent of income gains since the bottom of the recession have gone to the top one percent. The recipients of those gains are doing just fine.

Most states with an income tax use federal adjusted gross income (AGI)—income before deductions and exemptions are applied—as the starting point for calculating their state taxes. Vermont is one of only seven states that start with federal taxable income—the amount left over after deductions and exemptions—which is substantially less than federal adjusted gross income.

Because higher-income people pay higher tax rates, those deductions and exemptions are worth a lot more for them—and cost the state more—than they do for moderate and low-income taxpayers. Furthermore, starting with a smaller tax base, Vermont has to apply a higher tax rate to raise the same revenue. Some argue that this makes the state less attractive to business.

The Blue Ribbon Tax Structure Commission’s 2011 report discussed this problem and recommended shifting to AGI. While the Legislature has slowly moved in this direction over the past several years, it’s time to finish the job. The state can reduce these unnecessary expenditures to help balance the budget and make Vermont’s income tax fairer and the state more competitive.

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Spending caps undermine the state budget’s purpose http://publicassets.org/blog/spending-caps-undermine-the-state-budgets-purpose/ http://publicassets.org/blog/spending-caps-undermine-the-state-budgets-purpose/#respond Fri, 24 Feb 2017 20:54:23 +0000 http://publicassets.org/?p=11235 Tying public spending to any measure of economic growth is a double whammy for Vermonters in bad times: When the economy slows, it takes state spending down with it. So Vermonters not only have to deal with job and income losses during a recession, they also get hurt by a reduction in state services just when they need them most. Read more

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Tying public spending to any measure of economic growth is a double whammy for Vermonters in bad times: When the economy slows, it takes state spending down with it. So Vermonters not only have to deal with job and income losses during a recession, they also get hurt by a reduction in state services just when they need them most.

Nevertheless, the governor has proposed restricting state General Fund spending growth to the average growth rate of wages over the prior six years.

Given the countercyclical nature of public investment—spend more when the economy is slow, reduce spending and save when the economy picks up—concerns that the state budget is growing too fast are overblown. It’s true that for the past few years state General Fund spending has grown faster than the economy. But there was a lot of lost ground to make up following the Great Recession. Over the last 20 years state spending has in fact grown more slowly than the economy, and wage growth has been even slower.

According to Vermont statute, the purpose of the state budget is to “address the needs of the people of Vermont in a way that advances human dignity and equity.” This applies in good times and bad. And that’s why public spending should buck the economic trends. There’s greater demand for food stamps and housing assistance, for example, when the economy slows. The administration’s proposal to tie General Fund spending growth to wage growth undermines the fundamental purpose of the state budget.

But there are other problems with this approach to budgeting.

Cutting back on public investment aggravates a slowing economy. The Center on Budget and Policy Priorities found that Vermont was one of many states that reduced services in the midst of the Great Recession. These cuts “not only harm vulnerable residents but also worsen the recession—and dampen the recovery—by reducing overall economic activity.”

Another problem with a General Fund-only spending cap is that it reduces the budget debate in Montpelier to one question: How do we keep General Fund spending under the cap? The governor’s fiscal 2018 budget recommendation shows just how easy it is to keep General Fund spending growth low by moving expenses to other funds, like the Education Fund, without paying for them. A cap on General Fund spending, which is only a quarter of the state budget, encourages more of this cost shifting.

None of this is to say that Vermont should have unlimited state spending. Budgeting is a balancing act that requires thoughtful consideration of needs and resources. In times of greater need, spending should go up. When the economy is good, Vermont should plan ahead and save for leaner times, so that temporary revenue losses in bad times don’t lead to abrupt cuts to state services we all need.

Instead of working to meet an arbitrary cap, the budget debate in Montpelier should focus on how to make consistent smart investments that meet the state’s needs and build its future. That would be a better approach for the state’s economy and for Vermonters.

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General fund budget gap? What gap? http://publicassets.org/blog/general-fund-budget-gap-what-gap/ http://publicassets.org/blog/general-fund-budget-gap-what-gap/#respond Wed, 15 Feb 2017 19:23:46 +0000 http://publicassets.org/?p=11230 On one level, Gov. Phil Scott’s first budget proposal provides a useful lesson. He showed it’s relatively easy to reduce or eliminate a state budget “gap,” at least on paper. You just move the problem into a different account. But it also could be a useful service if it shifts the budget conversation in Montpelier away from “the gap” and more toward to the purpose of raising and spending public money. Read more

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On one level, Gov. Phil Scott’s first budget proposal provides a useful lesson. He showed it’s relatively easy to reduce or eliminate a state budget “gap,” at least on paper. You just move the problem into a different account. But it also could be a useful service if it shifts the budget conversation in Montpelier away from “the gap” and more toward to the purpose of raising and spending public money. We should be talking about how the budget can improve the lives of Vermonters and help them achieve their potential.

For at least 10 years now, as each annual session of the Legislature approaches, all eyes in Montpelier focus on the size of the budget gap projected for the following fiscal year. The gap is the difference between the estimate of taxes and other revenue flowing into the state in a given year and the projected cost of various public programs and services that year.

The gap that generates all the anxiety is the one in the state’s General Fund. Admittedly, this is the account the covers the operation of much of state government—human services, corrections, the state police, environmental protection, economic development, the courts, the Legislature, and so forth. And it’s funded with taxes many Vermonters are familiar with—the personal income tax, sales tax, rooms and meals tax, and corporate taxes are the big ones.

While the General Fund might be considered the state’s main account, it represents only about a quarter of all the money Vermont state government spends every year. The Education Fund is roughly the same size as the General Fund. And federal funds, about $2 billion a year, make up the biggest single account.

The drama in Montpelier each year is usually about closing the gap and balancing the General Fund. And this year Governor Scott has proposed another twist: He wants to set a limit on how much General Fund spending can grow in any given year.

But as the governor showed with his proposed budget, one way to make the numbers come out right is to move expenditures out of the General Fund into other accounts or move revenue from other accounts into the General Fund.

What the governor proposed for next year was to move a lot of expenditures that normally would be paid out of the General Fund—about $136 million—and pay for them out of the Education Fund. He also shifted some revenue from the General Fund into the Education Fund, but not enough to cover the additional obligations. This left the Education Fund with a $50 million gap. To close the Education Fund gap, the governor asked local school boards to cut their budgets.

This isn’t new. Administrations and legislatures have moved money around like this for decades. In this case, the shift makes the General Fund increase look smaller than it normally would be. It also gives local school boards the task of making the cuts. But the take-away in all of this is that we shouldn’t get too hung up on what’s happening with the General Fund in any given year.

That’s not to say the state doesn’t need to balance its budget. It does. And it’s important to track how money is being spent to insure taxpayers are getting the results they expect and deserve. But Vermonters would be better served if the budget discussion each winter in Montpelier focused less on whether the General Fund is growing faster or slower than it did the year before. The change may be due to spending, or it could be the accounting.

A better discussion would concentrate on whether the plan is meeting the purpose of the state budget. Will it move us toward the state we want to have five or 10 or 20 years from now? Will it improve the lives of average Vermonters, especially families who struggle the hardest to make ends meet?

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No homeowner tax relief in governor’s school budget cuts http://publicassets.org/blog/no-homeowner-tax-relief-in-governors-school-budget-cuts/ http://publicassets.org/blog/no-homeowner-tax-relief-in-governors-school-budget-cuts/#comments Fri, 27 Jan 2017 22:31:16 +0000 http://publicassets.org/?p=11204 Gov. Phil Scott said this week that property taxes were one of the biggest contributors to what he calls the state’s “affordability crisis,” and he called on local school boards to cut more than $50 million from the budgets they’ve prepared for next year. Read more

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Gov. Phil Scott said this week that property taxes were one of the biggest contributors to what he calls the state’s “affordability crisis,” and he called on local school boards to cut more than $50 million from the budgets they’ve prepared for next year. But if schools make the cuts the governor has asked for, Vermont homeowners won’t see lower taxes. Instead, school budget savings will be used to cover new obligations the governor wants to pay for out of the education funding pot.

The governor’s plan is to transfer some existing expenditures—for higher education and a portion of teachers’ retirement—from the General Fund to the Education Fund. He also wants to add new spending—additional money for early education and education “innovation”—to the Education Fund. While he is proposing to move additional General Fund revenue to the Education Fund, it is not enough to cover the additional expenditures.

Here’s the math:

EdBlog

At first glance, this appears to be a simple case of paying for public services out of a different pocket. But the taxes that go into the General Fund and the Education Fund aren’t the same. Most of the money in the General Fund comes from broad-based taxes: income, sales, rooms and meals, and business taxes. Property taxes supply the bulk of the money in the Education Fund.

So while the governor says property taxes are making Vermont unaffordable, his plan shifts $50 million in new costs onto the property tax. To avoid having to raise property taxes, the governor wants to cut the other expenditures covered by the Education Fund—payments to public schools.

Most school districts have completed work on the fiscal 2018 budgets, and the Agency of Education estimates spending will increase around $38 million next year. The governor said he was only asking local schools to level fund their budgets for the next school year. But his budget recommendation would require them to cut $55 million from what they determined they need next year.

And even if they did make those cuts, it wouldn’t reduce property taxes. The bottom line is that by shifting costs to the Education Fund, the governor’s plan will use 6 cents on the average homestead property tax rate to cover what have been historically General Fund obligations.

The governor’s new spending initiatives are laudable. Vermont does need to put more resources into higher education and early education. But instead of shifting costs onto homeowners or reducing opportunities for Vermont schoolchildren, the governor should look to those who have prospered the most during the recent economic recovery to help insure that others have the same chance.

 

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Statement on Gov. Phil Scott’s Jan. 24, 2017, Budget Address http://publicassets.org/blog/statement-on-gov-phil-scotts-jan-24-2017-budget-address/ http://publicassets.org/blog/statement-on-gov-phil-scotts-jan-24-2017-budget-address/#respond Tue, 24 Jan 2017 23:50:59 +0000 http://publicassets.org/?p=11199 In his first budget speech today, Gov. Phil Scott proposed to address what he calls Vermont’s affordability crisis by curbing state spending. But he didn’t have much to say about the main reason many Vermont families are having trouble making ends meet: While the economy is growing, most Vermonters aren’t benefitting. Read more

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In his first budget speech today, Gov. Phil Scott proposed to address what he calls Vermont’s affordability crisis by curbing state spending. But he didn’t have much to say about the main reason many Vermont families are having trouble making ends meet: While the economy is growing, most Vermonters aren’t benefitting. Their incomes have been stagnant since at least 2000. Vermont is experiencing the same growing gap between the rich and everyone else that we see nationally.

We agree with the governor taking a more expansive view of education. We think public education should include pre-kindergarten and at least two years of college. And this will require an additional state investment. But there are better ways to fund it than to add these obligations to the Education Fund without adequate General Fund support to cover them. The governor’s proposal leaves school districts with the choice of cutting $50 million from K-12 education or increasing property taxes.

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The budget gap solution http://publicassets.org/library/publications/the-budget-gap-solution/ http://publicassets.org/library/publications/the-budget-gap-solution/#respond Wed, 30 Nov 2016 15:05:39 +0000 http://publicassets.org/?p=11147 “Vermonters need to smoke more.”

That was the eye-catching headline to a recent column by Jon Margolis on vtdigger.org. It was a great way to explain Vermont’s chronic budget gaps without putting everyone to sleep talking about “structural revenue problems.”

Margolis was right. Part of Vermont’s budget problems are due to the state’s reliance on revenue that is tied to an ever-shrinking tax base.

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“Vermonters need to smoke more.”

That was the eye-catching headline to a recent column by Jon Margolis on vtdigger.org. It was a great way to explain Vermont’s chronic budget gaps without putting everyone to sleep talking about “structural revenue problems.”

Margolis was right. Part of Vermont’s budget problems are due to the state’s reliance on revenue that is tied to an ever-shrinking tax base.

There are fewer cigarette smokers. It’s a good thing. We want people to quit. But because cigarettes are taxed by the pack, we take in less money unless we keep raising the tax rate. It’s the same with gasoline. A portion of the gas tax is levied by the gallon. As vehicles get more efficient, or are powered by something other than gasoline, the state takes in less money to repair roads and bridges. Driving more was another of Jon’s prescriptions.

A few years back, a commission appointed to study Vermont’s tax structure found that the state’s sales tax base, if not shrinking, certainly wasn’t keeping up with consumers’ changing buying habits. The commission recommended the sales tax be levied on most services and on online Internet purchases. By broadening the sales tax base, the commission said, Vermont could lower the sales tax rate.

Modernizing Vermont’s revenue system would help to address the state’s recurring budget gaps. Policy makers and elected officials also need to do a better job managing the ups and downs of the economic cycles— build up adequate reserves and be willing to use them.

We heard a lot this fall about matching state budget growth to the economy as a way to deal with budget gaps. While the two generally need to be in sync over the long term, budget growth and economic growth aren’t going to move together every year, nor should they.

The late Gov. Richard Snelling understood the idea of countercyclical budgeting—and was known to lecture reporters on the subject during news conferences. When the economy tanks, as it did most recently at the end of 2007, state revenues fall at the same time that there is greater demand for public services: food stamps, home heating assistance, unemployment compensation, welfare, housing for the homeless, and the other things families need when people lose their jobs. That’s exactly when government needs to step in, not pull back.

To be sure, Snelling advocated for “sustainable” budget growth. But in 1991, when Vermont was in the throes of another recession, he and the Legislature spent money the state didn’t have—Vermont ran a budget deficit—rather than slash critical services trying to match budget growth and economic growth in the short term. They also raised tax rates to pay off the deficit, and later rolled back the tax rates after the economy recovered.

In today’s political climate, it is unlikely we’ll see the state run temporary deficits again. But Vermont can further develop another fiscal tool: reserves. Revenue volatility, which some economists warn has gotten worse in recent decades, could be mitigated if the state had larger reserves to manage through an inevitable downturn. The Center on Budget and Policy Priorities recommends reserves equal to at least 15 percent of the budget.

Long-term budget sustainability is an important goal. So is fiscal stability. State government will function better and Vermonters will be better served by a combination of revenue modernization and sound, steady fiscal management than by erratic, unpredictable funding of state services driven by annual cash flow.

The purpose of the state budget, according to the statute adopted in 2012, is to “address the needs of the people of Vermont in a way that advances human dignity and equity” and “[s]pending and revenue policies will … recognize every person’s need for health, housing, dignified work, education, food, social security, and a healthy environment.” Those are the criteria our elected officials should use in determining spending in the state budget.

 

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Tapping Vermont’s entrepreneurial talent http://publicassets.org/blog/tapping-vermonts-entrepreneurial-talent/ http://publicassets.org/blog/tapping-vermonts-entrepreneurial-talent/#respond Thu, 03 Nov 2016 20:23:13 +0000 http://publicassets.org/?p=11126 Vermont needs to reduce gender disparities in the labor force, and the state needs more jobs. More women-owned businesses could help on both fronts.

A new report by Change the Story VT shows the potential of female business ownership. According to the report, there’s already a strong entrepreneurial spirit among Vermont women. Read more

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Vermont needs to reduce gender disparities in the labor force, and the state needs more jobs. More women-owned businesses could help on both fronts.

A new report by Change the Story VT shows the potential of female business ownership. According to the report, there’s already a strong entrepreneurial spirit among Vermont women. The percentage of working age women whose own businesses are their primary occupation is double the national average. Women are opening new businesses in Vermont at a faster pace than men, and revenue from their businesses is growing faster than that of men.

While the trends are encouraging, the report found there is still a way to go before male- and female-owned businesses are on a par. Women-owned businesses are outnumbered 2 to 1 by businesses owned by men, and businesses owned by women generate only 19 cents of revenue for every $1 produced by businesses owned by men. Nearly 90 percent of the businesses women own are sole proprietorships with no additional employees. For male-owned businesses, it’s 77 percent.

The Change the Story VT report says that more data are needed to better understand the differences between male-and female-owned businesses:

  • Why do women have proportionally more sole proprietorships?
  • Why do their revenues lag so far behind male-owned businesses?
  • Why are women-owned businesses underrepresented in industry sectors that typically generate high revenues?

The answers to those questions could be helpful, especially if they lead to more employment. There are about 10,000 fewer people working in Vermont today—either self-employed or on someone’s payroll—than there were 10 years ago.

As Change the Story VT points out, understanding the obstacles that hamper women from owning or expanding their own businesses will help the state “make the most of Vermont’s entrepreneurial talent.”

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