PAI Blog > Press Releases
New report on working Vermont: Reverse priorities to put people first
MONTPELIER—Three years after the start of the Great Recession, the gap between Vermont’s wealthiest and everyone else had widened, and thousands of Vermonters had sunk into poverty, according to a new report released by Public Assets Institute today. The governor’s goal of rebuilding the middle class is an important start, but Montpelier must begin to create a state that works for everybody, the report says.
The State of Working Vermont 2011 analyzes the most recent data, from 2010. It shows that Vermont’s 6.2 percent unemployment rate for 2010 was the sixth lowest in the country and the second lowest in New England. The wage gap between male and female workers is the sixth smallest in the nation—but only because women’s wages have fallen less than men’s.
“Vermonters didn’t get hit quite as hard by the recession as people in other states, and that’s good. But we need to be aiming higher,” said Public Assets President Paul Cillo. “A lot of Vermonters have lost ground in the last 10 years. Their real incomes aren’t much better than they were in 1990. Poverty is up and the pace of job creation is down.” The report argues that these losses are the results of public policies that put money considerations ahead of people’s needs—a priority that needs to be reversed.
The report also puts recent trends in historical context, documenting the widening of Vermont’s income gap since the early 1980s, anemic job growth even before the recession hit, and 20 years of income stagnation for the typical Vermont household.
“Governor Shumlin had it right when he described the fears of Vermont’s declining middle class, but the problems go beyond just the middle class,” Cillo said. “We need to make a commitment to build a Vermont that works for everybody.”
The report suggests steps the administration and the Legislature should take to reverse the trends of the last 30 years. The recommendations include:
- Policies explicitly aimed at closing the income gap, rebuilding the middle class, and a broader sharing of the state’s economic growth.
- Development of indicators to measure the state’s progress toward these policy goals.
- A results-based approach to public investment and restoration of the government’s capacity to measure the effectiveness of public programs and services.
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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Another Report Debunks Tax Flight Myth
MONTPELIER— A new report, this one by the Center on Budget and Policy Priorities in Washington, D.C., provides more evidence to refute the claim that wealthy residents will move if they are asked to pay higher taxes.
Warnings about tax flight are often used to oppose tax increases. Governor Douglas made the claim to fight additional taxes during the recent recession, and his successor has made the same claim.
“This claim is false,” said Robert Tannenwald, co-author of the report and senior fellow at the Center, a nonpartisan, nonprofit policy research organization. “The effects of taxes on migration are, at most, small—so small that states that raise income taxes on the wealthiest households will see a substantial net gain in revenue.”
Citing IRS data, the Vermont Blue Ribbon Tax Structure Commission challenged the tax-flight myth in its report to the Legislature earlier this year. Noting that people migrating to Vermont consistently have higher incomes than those who move out of the state each year, the commission said migration had resulted in a net gain in income for Vermont for at least the last 16 years.
The report released today by the Center on Budget and Policy Priorities cites numerous examples of research debunking the migration myth and, through case studies, shows how misinformation about the impact of taxes on migration can influence policymakers and the media. Those who support the migration myth often wrongly assume a cause and effect relationship, promote irrelevant findings, and inaccurately measure migration, the report found.
“As we focus on growing our economy and creating new jobs, it’s now crystal clear that we don’t need to be concerned about residents fleeing Vermont if we take a balanced approach that includes new revenues,” said Paul Cillo, president of the Public Assets Institute. “False claims like this shouldn’t deter our policymakers from making good choices for Vermont.”
Very few Americans move between states, according to the report. The little interstate-migration that does occur is more frequently due to job opportunities and housing prices than tax rates. Specifically, the report illustrates that housing costs may have a significantly larger impact on Americans’ finances than tax levels.
“It’s more important than ever that we invest in our state’s future, and that’s why it’s so dangerous to rely on flawed information about the effect of taxes on residents’ decisions about where to live,” Cillo said. “As the Legislature prepares to address another budget gap for fiscal 2013, we need to make sure we have adequate revenue to support strong schools and the infrastructure we need help our economy grow.”
Jeffrey Thompson, an economist at the Political Economy Research Institute at the University of Massachusetts, published a paper last spring that found that people’s decisions to move were much more strongly correlated with job opportunities and affordable housing than they were with higher taxes.
Cristobal Young of Stanford University and Charles Varner of Princeton University published a study in June showing that a “millionaire’s tax” in New Jersey had little discernible effect on population movement. The New Jersey study also showed that any revenue lost because a few people left was more than offset by the new revenue generated by higher taxes on the vast majority of millionaires who remained.
The Center’s full report can be found at: http://www.cbpp.org/cms/index.cfm?fa=view&id=3556
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Public Assets Institute is a non-profit, non-partisan organization that researches and analyzes state fiscal policy. It is a member of the State Fiscal Analysis Initiative (SFAI) coordinated by the Center on Budget and Policy Priorities in Washington, D.C. Jeffrey Thompson is a research economist based at the Political Economy Research Institute at the University of Massachusetts and funded, in part, by Public Assets Institute and the other New England members of the SFAI network.
For more information contact:
• Paul Cillo or Jack Hoffman, Public Assets Institute, 802-223-6677, paul@publicassets.org, jack@publicassets.org
• Shannon Spillane, Center on Budget and Policy Priorities, 202-408-1080 or spillane@cbpp.org
ATTENTION TV PRODUCERS: High-resolution video sound bites featuring the report’s co-author, Jon Shure, are available upon request. Please contact: Shannon Spillane, Center on Budget and Policy Priorities, 202-408-1080 or spillane@cbpp.org.
New Study: Jobs—Not Taxes—Stimulate Migration
MONTPELIER—Vermont shouldn’t worry that higher taxes will drive people away, but how it spends its tax revenue appears to affect the likelihood that people will move here. Employment opportunities, a low incidence of crime, and affordable housing go hand in hand with greater inward migration.
Those were among the key findings of a new migration study released today by the Montpelier-based Public Assets Institute and the Political Economy Research Institute (PERI) of Amherst, Mass. The study was based on migration data from all 50 states, but focused specifically on the effects in the New England states.
“The results show that taxes have no measurable impact on people’s decisions to leave a state,” according to Jeffrey Thompson, a research economist at PERI and the author of the study, The Impact of Taxes on Migration in New England. “Once households have decided to relocate—because of job loss, divorce, or whatever other reason—they seem to be slightly influenced by the taxes in their potential destination states.” Even in choosing a destination state, though, the impact of taxes is relatively small and far outweighed by job opportunities and other conditions, according to the report.
“This new research should put to rest claims we’ve heard for years about tax flight,” said Paul Cillo, president of Public Assets Institute. “Our own research and recent analysis by the Blue Ribbon Tax Structure Commission have shown that people moving to Vermont consistently have more income than the people who leave the state each year. If tax flight, especially by the wealthy, was happening, we should be seeing an income drain; instead we’re actually seeing more income.”
“The report suggests that how a state uses it tax dollars can make it more attractive,” Cillo continued. “Over the 18-year period analyzed, there was a consistently strong correlation between people moving to a state and greater job opportunities, lower crime rates, and the availability of affordable housing.”
Thompson’s study was based on migration data from all 50 states collected by the Internal Revenue Service between 1988 and 2006. He also looked at Census data and reviewed economic literature on migration patterns and tax policy.
“That taxes are not a big driver of migration may shock some politicians, but is not a surprise to researchers on this issue,” Thompson said. “People concerned about attracting people to a state and keeping them there should really focus on creating jobs, and even be willing to raise taxes to do it. People are not going to leave a state because of some modest change in taxes, but they will leave if public safety deteriorates and if there are no jobs.”
Critics of Vermont’s tax structure often point to New Hampshire as a model. However, Thompson also found that when looking solely at outward migration, people consistently have left New Hampshire at a greater rate than residents have left Vermont or the other states in the region.
Public Assets Institute is a non-profit, non-partisan organization that researches and analyzes state fiscal policy. It is a member of the State Fiscal Analysis Initiative (SFAI) coordinated by the Center on Budget and Policy Priorities in Washington, D.C. Jeffrey Thompson is a research economist based at the Political Economy Research Institute at the University of Massachusetts and funded, in part, by Public Assets Institute and the other New England members of the SFAI network.
The Impact of Taxes on Migration in New England is available at the Public Assets Institute website (http://publicassets.org/resources/what-others-are-saying/the-impact-of-taxes-on-migration/)
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New Report: Vermont Must Address Both Budget Problems
MONTPELIER—The promise of health care reform in the future doesn’t compensate Vermonters for the pain of budget cuts today. While they address long-term budget problems, the governor and the Legislature also need to build a bridge to reform by adequately funding the programs and services that citizens need today.
That’s the conclusion of a new report released today by the Montpelier-based Public Assets Institute.
“The state has two budget problems: one short term related to the recession, the other a long-term structural problem,” said Paul Cillo, president of Public Assets Institute. “Gov. Peter Shumlin has begun to address Vermont’s structural budget problems by proposing reforms to the health care system and corrections policies, and he deserves credit for those initiatives.”
“But budget savings from health care reform are still several years off. And Vermonters, still reeling from the effects of the Great Recession, need help now,” he said. “The governor and the Legislature are proposing to inflict additional budget cuts that disproportionately hurt low- and middle-income Vermonters to solve recession-driven revenue problems. Instead, they should be maintaining essential state services by using temporary revenues, including rainy day funds and taxes on those with higher incomes, to build a bridge to reform.”
The Public Assets report points out why the Governor Shumlin is right to focus on reforming health care and reducing the prison population. Health care and corrections costs have been growing faster than the economy for more than decade.
According to the report, Vermont also has revenue problems that are not being addressed. Taxable sales have been growing more slowly than the economy overall. Consequently, state revenues do not keep pace with economic growth. The Blue Ribbon Tax Structure Commission recommended in January that Vermont extend the sales tax to services and lower the rate, which would correct this problem. But so far the governor has rejected that proposal.
The report notes that Vermont will continue to have problems developing sustainable fiscal policies until the Legislature and the governor address these structural problems.
Looking at the fiscal 2012 budgets proposed by the governor and the Vermont House, the Public Assets report points out that neither is adequate to maintain existing human services. Citing figures from the Joint Fiscal Office, the report says the governor’s proposed budget was about $80 million below what’s needed. While the House restored some of the cuts proposed by the governor, its budget is still short by about $68 million, according to the report.
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
Con Hogan Joins Public Assets’ Board of Directors
MONTPELIER – Linda E. Markin, chair of the board of Public Assets Institute, announced that Cornelius “Con” Hogan of Plainfield has joined the board. A non-partisan nonprofit with offices in Montpelier, Public Assets Institute is Vermont’s premier independent state budget and tax research organization and the source for timely and in-depth state fiscal and policy analysis.
“Public Assets Institute is growing, and we’re delighted to have Con and his wealth of knowledge and experience in the public, private, and non-profit sectors on the board to help with that process,” said Markin, who is also CFO of Concept 2 in Morrisville.
Hogan is well-known in Vermont for his work as Secretary of Vermont’s Agency of Human Services from 1991 through 1999. Prior to that he was Commissioner of the Vermont Department of Corrections. He was president and CEO of a successful mid-sized corporation during the 1980s.
“Public Assets Institute researches and brings to light the facts about Vermont’s fiscal condition for the benefit of all Vermonters,” Hogan noted. “Good policy requires solid, factual information, and I’m pleased to help out on the board to support this important work.”
Hogan has served as a Senior Fellow with the Center for the Study of Social Policy, a Senior Consultant for the Annie E. Casey Foundation, a faculty member of the National Governor’s Association Center for Best Practice, a Director of Fletcher Allen Health Care, Chair of the National Advisory Committee for the Robert Wood Johnson initiative for Strengthening Families through health care access, a member of the Advisory Committee for the National Center for Children in Poverty, and as a consultant to the Children’s Defense Fund on a health insurance program for all children.
He holds a Master’s Degree in Government Administration from the Wharton School of the University of Pennsylvania. He was awarded an honorary Doctor of Laws degree from the University of Vermont, where he presented the commencement address for the graduating UVM Class of 2000. He is the author or co-author of six books.
Hogan is also currently Chair of the Board of Trustees of the Vermont College of Fine Arts, and a director of the Permanent Fund for the Well Being of Vermont’s Children.
Public Assets Institute’s reports based on its research are available on its website www.publicassets.org at no cost.
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Federal Tax Cuts Offer New Option
FOR IMMEDIATE RELEASE:
January 21, 2011
MONTPELIER – The extension of the Bush tax cuts passed recently by Congress gives Governor Shumlin and the Legislature another option for balancing the state budget in fiscal 2012 and 2013. A new analysis shows that the top 5 percent of Vermont taxpayers will save $190 million as a result of the federal tax cut extension.
“We’re not suggesting that these taxpayers shoulder the entire cost of closing Vermont’s projected $150 million budget gap,” said Paul Cillo, president of Public Assets Institute. “But the fact is, those who are prospering the most in the current economy could close the state’s entire budget gap and still pay less in state and federal income taxes than they would have if the Bush tax cuts had expired as scheduled.”
“What this analysis shows,” Cillo said, “is that Vermont has additional capacity to raise state revenue over the next two years in order to maintain critical public services.”
The analysis of the effects of extending the Bush tax cuts was prepared for Public Assets Institute by the Institute on Taxation and Economic Policy in Washington, D.C. According to ITEP analysis, the top 1 percent of Vermont taxpayers will save a little more than $100 million, thanks to the tax-cut extension. The average personal income for taxpayers in this group is about $940,000 a year. The savings for the next 4 percent of taxpayers will be about $88 million.
The Bush tax cuts were contained in bills passed by Congress in 2001 and 2003. These bills reduced income tax rates, lowered taxes on capital gains, and cut the estate tax, among other provisions. The cuts were scheduled to expire at the end of 2010, but in a lame duck session in late December, Congress voted to extend the cuts for another two years.
Vermont, along with the other states, had federal stimulus funds to help maintain critical services during the recession. Those stimulus funds run out this year, and without additional revenue or further spending cuts, Vermont’s projected budget deficit for 2012 will be about $150 million.
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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New Report: Recession’s Toll on Vermont is Worsened by Earlier Policies
FOR IMMEDIATE RELEASE:
December 27, 2010
MONTPELIER- A new report by Public Assets Institute highlights the toll taken by the Great Recession and Vermont’s failed efforts at job creation leading up to it. The state’s immediate task is to respond to the crushing downturn and provide jobs for thousands of people who are out of work through no fault of their own. But Vermont also needs to re-examine its strategy for sustainable job creation, because current policies, especially business tax breaks, are not working. Even before this recession, Vermont was having its worse decade on record for creating new jobs.
The report, “State of Working Vermont 2010,” recommends that Vermont return to the kinds of public investments that have been shown to strengthen the economy and provide working Vermonters the tools they need to support their families and prosper.
“We are all aware of the hardship created by this recession,” said Paul Cillo, president of Public Assets Institute. “But what no one has been talking about is how poorly Vermont was doing before the recession. Where job creation is concerned, this has been the worst decade in Vermont since the Department of Labor started keeping records in the late 1930s.”
Other key findings of the report:
- Real median household income in Vermont was lower in 2009 than it was in 1999.
- From 2008 to 2009, unemployment increased nearly 50 percent among Vermont men.
- Vermont has lost 13,500 private sectors jobs since the start of the recession.
- Vermont’s private sector is providing 10,000 fewer jobs than it was 10 years ago.
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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Vermont Should Reveal More About Business Subsidies
New report grades the 50 states on transparency
FOR IMMEDIATE RELEASE:
December 9, 2010
MONTPELIER –Over the past decade Vermont has spent tens of millions of dollars in state tax revenue to subsidize businesses—state and local tax breaks, cash grants, government-financed infrastructure, and other help in exchange for job creation. Yet taxpayers do not know much about what they’ve gotten for their money.
A new report released today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC, seeks to increase the transparency of business subsidies in Vermont and throughout the country.
“This report is especially important now as Vermont’s elected officials are making tough choices about state spending and revenues,” said Public Assets Institute President Paul Cillo. “There needs to be better public accountability about business subsidies so that Vermonters can know what they’re getting for their money and whether the money might be better spent on other things.”
Online disclosure of the names of companies receiving such government help is becoming the norm around the country. But the quality of the reporting varies widely, and about a dozen states still keep taxpayers in the dark, says the report, Show Us the Subsidies.
The report ranks the 50 states for state disclosure of subsidy information. Vermont is number 13. But that’s not saying much: Nationwide, transparency on this matter is not very good.
“Our findings tell two different stories,” said Good Jobs First Executive Director Greg LeRoy. “The first is one of the steady spread of transparency across the nation. The other is that some states still inexplicably keep taxpayers completely or partially in the dark. The accountability movement has made great advances but still has a long way to go before job subsidies are as transparent as other categories of state spending, such as procurement.”
Show Us the Subsidies bases its ratings of state disclosure programs on the inclusion of information such as company-specific dollar amounts, number of jobs created, and wages of workers in those jobs. The accessibility of the online data is also considered. The average of these factors is expressed in a number from 1 to 100.
Coming in at the top were Illinois (82), Wisconsin (71), North Carolina (69), and Ohio (66). Vermont received a score of 39.
In addition to the report, Good Jobs First released two new online tools relating to state government economic development practices: Subsidy Tracker, a searchable database that brings together subsidy recipient information from numerous state governments; and Accountable USA, a set of web pages on each of the 50 states and the District of Columbia summarizing their track record on subsidies. All these resources are available at no cost on the Good Jobs First website: www.goodjobsfirst.org
Show Us the Subsidies is available at the Public Assets Institute website.
Public Assets Institute is a non-profit, non-partisan organization that researches and analyzes Vermont fiscal policy. http://www.publicassets.org
Good Jobs First is a national policy resource center for grassroots groups and public officials, promoting corporate and government accountability in economic development and smart growth for working families. http://www.goodjobsfirst.org
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New Report Lays Out Vermont Education Funding Facts
FOR IMMEDIATE RELEASE:
October 15, 2010
MONTPELIER—A new, easy-to-read report by Public Assets Institute lays out some often overlooked facts about education spending in Vermont. As measured against the overall economy, for example, the report shows that education costs have been remarkably stable since the early 1990s, not out of control as many have asserted. The report also points out that middle income Vermonters who pay school taxes based on their income are still paying more than their wealthier neighbors who pay based on the value of their property.
“Education is one of the most important things we do as a society, and education funding will always be an important subject of public debate,” said Paul Cillo, president of Public Assets Institute. “This report looks at the data and lays out the facts about funding for education in Vermont. This information contradicts common misperceptions of skyrocketing education spending and wasteful school boards.”
The new report presents brief capsules of information about education and education funding. It shows, for example, how much school boards have slowed the school spending growth in recent years. School spending for this year is actually lower than it was in fiscal 2010.
“Many Vermonters will no doubt be surprised to learn that education spending dropped this year because many of them have seen their property taxes rise,” Cillo said. “The problem is not with local school boards, but in Montpelier, where the administration and Legislature have cut General Fund support for education and shifted more of the cost onto the property tax.”
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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Income Taxes: Vermont is in the Middle of the Pack
FOR IMMEDIATE RELEASE:
September 28, 2010
A new fifty-state analysis of state income taxes by Public Assets Institute shows that Vermont ranks in the middle of states in the rest of the country. While much has been made of Vermont’s high tax rates, the amount taxpayers actually pay in Vermont is lower than in many other states because of deductions and other adjustments and the state’s progressive rate structure. This analysis looked at the total income taxes paid in each state in 2008 and divided it by the total adjusted gross income (AGI)—that is, income before deductions and other adjustments.
Using this “effective tax rate” measure, Vermont was 23rd among states when they were ranked highest to lowest. Forty-three states levy a personal income tax; seven do not.
“We hear a lot about Vermont’s top income tax rate, which is relatively high because Vermont has a long traditional of progressive income taxes. Those who get the greatest financial benefit from society’s public structures are expected to contribute the most to maintaining them,” said Paul Cillo, president of the Public Assets Institute.
“But few people pay that top rate because it applies only to taxable income above about $372,000, after deductions and exemptions have been subtracted.
“If we want to see how Vermont’s income tax stacks up against the other states, the most straightforward way is to look at the amount Vermonters actually pay and divide it by their adjusted gross income, which is based on federal tax laws and is, therefore, the same for every state.”
The Public Assets report shows that Vermont’s effect tax rate was 3.9 percent in 2008. Among the states with an income tax, the effective rates ranged from 0.2 percent in Tennessee to 7.0 percent in Oregon.
“Because we have progressive income tax rates, people in the higher income brackets have an effective tax rate that is higher than 3.9 percent; the rate is lower for those in the lower brackets,” Cillo said. “How taxes are distributed is an important consideration. But it’s also useful to look at how much of Vermonters’ income goes to pay state income taxes, and how that stacks up against other states.”
Another common method of state tax comparison is to look at all taxes collected within a state—taxes paid by residents as well as those paid by businesses and non-residents. The U.S. Census used to publish annual reports calculating state taxes or state and local taxes on a per capita basis. However, the Census stopped issuing those reports, explaining that they presented a distorted picture for states, such as tourist states, that collect a lot of revenue from non-residents.
An annual report published by the District of Columbia and two studies done by the Vermont Legislature’s Joint Fiscal Office compare the taxes typical Vermonters pay with taxpayers in other states. The DC study compares the amounts paid by taxpayers in the largest city in each state. According to latest DC study, Vermont—as represented by typical Burlington families—falls in the middle when it comes to taxes paid as a percentage of income.
The Legislature made modest tax changes in the last two years, a blue ribbon commission is studying the state’s tax structure, and taxes are likely to come up again in next year’s budget discussions. The state income tax is the largest source of state General Fund revenue. The tax generated $622.3 million in fiscal 2008, which was 52 percent of all General Fund receipts.
New Study: Funding Public Services is the Best Route to Prosperity
August 11, 2010
For Immediate Release
MONTPELIER—States, including Vermont, have long viewed economic development and funding for public services as competing interests. That’s a false dichotomy. Indeed, rebuilding neglected infrastructure and improving education will reap economic benefits in Vermont far surpassing those achieved by tax credits and other business giveaways.
Those are the conclusions of a new study released today by economist Jeffrey Thompson of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst. Thompson’s paper is based on his extensive analysis of research on what works and doesn’t work to create jobs and strengthen state and regional economies. It suggests a better approach to economic development for the New England states as they dig out from the Great Recession that began in late 2007.
“In many cases the most effective options for creating jobs are the same options that support public services,” says the introduction to Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax Incentives. “Spending and investing in areas at the core of the public sector mission—providing education and maintaining infrastructure—are effective at creating jobs in the short term and building prosperous economies over the long term . . . . The tax cuts-and-business-subsidies-approach to economic development, on the other hand, will do little to create jobs in the short run, and is not the most effective approach to generating growth over the long term.”
Paul Cillo, executive director of Public Assets Institute in Montpelier, welcomed the study as a refreshing reassessment of economic development opportunities for Vermont and the region. “For 30 years we’ve been underfunding our public infrastructure to pay for tax breaks and other so-called ‘jobs programs’ that have benefited individual business owners,” Cillo said. “As Jeff’s paper demonstrates, the result has been slower economic growth. We need to remember that government has an important role to play in economic development, and that role is to invest in and maintain the essential public structures that expand our productive capacity and help the economy to grow.
“Tax credits and other faddish incentives provide short-term benefits to a few lucky companies. But they don’t bring prosperity to Vermont’s workers, businesses, and families in the way that public investments can.”
Public Assets Institute is a non-profit, non-partisan organization that researches and analyzes state fiscal policy. It is a member of the State Fiscal Analysis Initiative (SFAI) coordinated by the Center on Budget and Policy Priorities in Washington, D.C. Jeffrey Thompson is a research economist based at the Political Economy Research Institute at the University of Massachusetts and funded, in part, by Public Assets Institute and the other New England members of the SFAI network.
Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax Incentives is available at the Public Assets Institute website.
For further information, contact:
Jeffrey Thompson at PERI 413-577-3147 or
Jack Hoffman at Public Assets Institute 802-223-6677.
Vermont’s Tax Structure Is Less Regressive than Most, But Still Favors the Wealthy
FOR IMMEDIATE RELEASE
November 18, 2009
MONTPELIER—Vermont has done better than many states to tax according to ability to pay, but low- and middle-income Vermonters still pay more of their income in state and local taxes than do those in the highest income brackets.
That is the finding of a new report released today by the Institute on Taxation and Economic Policy based in Washington, D.C.
“Vermont lawmakers may be forced to make difficult tax and spending decisions in the upcoming year,” said Matthew Gardner, ITEP’s executive director and lead author of the study, titled Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. “They should be mindful that the Vermont tax system already falls most heavily on the very poorest families in the state.”
Paul Cillo, executive director of the Montpelier-based Public Assets Institute, said the report should be required reading for the members of the Vermont Blue Ribbon Tax Structure Commission, which recently began a two-year study of the Vermont’s tax system.
“We have a long tradition of progressive income taxes, and thanks to income sensitivity, many Vermonters pay school taxes based on their income rather than the value of their property,” Cillo said. “But as this report clearly shows, we have more work to do if we want a tax system that is based on ability to pay.”
According to the study, which was based on taxpayers under 65, the poorest 20 percent of Vermont families are paying, on average, 8.2 percent of their income in state and local taxes, while the richest 5 percent of Vermont families pay 7.5 percent on average. For the middle-fifth of Vermont families, those with income between $34,000 and $54,000, 9.4 percent of their income, on average, goes to state and local taxes, the report found.
“No one would ever design an income tax with lower tax rates for the best-off taxpayers,” Gardner said. “But that is exactly what Vermont’s tax system overall does: it allows the very wealthiest individuals to contribute less of their income, on average, than middle- and lower-income families must pay. In other words, Vermont has an unfair, regressive tax system.”
Vermont sales and excise taxes are regressive: they fall more heavily on low- and middle-income taxpayers than on the wealthy. The Vermont income tax is progressive: the middle fifth of Vermont families pay, on average, 1.7 percent of their income in income taxes, while the richest 1 percent pay, on average, 5.4 percent of their income in income taxes. Taken all together, however, the entire tax structure is tilted in favor of those with higher incomes.
Although Vermont’s overall system is still regressive, it is not as bad as some states. Florida, which is seen by some as a haven for wealthy Vermonters, has one of the most regressive systems in the country. According to the ITEP study, the poorest 20 percent of Florida families pay, on average, 13.5 percent of their income in state and local taxes. The richest 1 percent of Florida taxpayers pay 2.1 percent of their income to support state and local government.
The full ITEP study is available at http://www.itepnet.org/whopays3.pdf
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
Based in Washington, DC, the Institute on Taxation and Economic Policy is a nonprofit, nonpartisan research organization that seeks to inform policymakers and the public of the effects of current and proposed tax policies on tax fairness, government budgets, and sound economic policy.
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New Vermont Government Transparency Site Goes Live
For immediate release – July 2, 2009
MONTPELIER — Vermonters interested in the workings of their state government now have a powerful new tool: www.vttransparency.org. The new website, a joint venture of Ethan Allen Institute of Kirby and Public Assets Institute of Montpelier, has a wealth of information about state revenues and spending, both current and historical.
It allows viewers to search state payments to vendors and compensation of state employees. It offers links to federal stimulus spending, economic development credits, rainy day funds, school district spending and outcomes, and municipal web pages.
While the focus of the website is primarily fiscal information, it also includes convenient links to other information about state and local government. There is a guide to tracking roll call votes of state legislators, for example, and users can find out how to track the progress of bills on the Legislature’s web site. There is also a guide to Vermont’s education finance laws (Act 60 and Act 68) and links to state statues, summaries of new legislation and the Vermont Constitution.
“Vermont Transparency is an excellent starting point for any citizen or group interested in the working of government,” said John McClaughry, president and founder of Ethan Allen Institute.
“The information on our website is all public data, but it is often difficult to find and not always easy to use,” said Jack Hoffman, senior analyst of Public Assets Institute and the project director. “Our goal is to present information in ways that give average Vermonters a better understanding of how the state raises and spends money and the fiscal policies that guide those decisions.”
Ethan Allen Institute and the Public Assets Institute often take opposing positions on matter of public policy. However, they both agree that good data and solid information are the foundation of sound public policy.
“Democracy depends on an informed citizenry that understands how its state and local governments work,” McClaughry said.
Vermont Transparency is a work in progress. More than 20 years of state budget information is available, which includes total appropriations as well as appropriations by individual state fund. Historical revenue data also are available. More information and links will be added as users make suggestions, and as state government makes more useful data available.
The Ethan Allen Institute, founded in 1993, is a nonprofit educational organization that advocates for individual liberty, private property, competitive free enterprise, and frugal, responsible and limited government.
The Public Assets Institute, founded in 2003, supports democracy by helping Vermonters understand the role public policies and public structures play in providing prosperity for all.
For more information, contact:
Jack Hoffman
Public Assets Institute
(802) 223-6677
jack@publicassets.org
John McClaughry
Ethan Allen Institute
(802) 695-1448
eai@ethanallen.org
Florida’s Weather Harder to Beat Than the Taxes
FOR IMMEDIATE RELEASE June 18, 2009
Contact:
Paul Cillo or Jack Hoffman
Public Assets Institute
802-223-6677
MONTPELIER – Weather and taxes are the reasons Vermonters often give for moving to Florida. But the key to lower property taxes in the Sunshine State is owning a less expensive home.
At least that was the case for a prominent Burlington accountant who recently offered a public explanation for why he and his wife were “abandoning Vermont.” The accountant said Vermont’s taxes had finally driven them out. He criticized changes the Legislature made this year to the income tax – capping the deduction for state income taxes and the partial closure of a capital gains tax loophole. The accountant also complained about property taxes, saying on property of similar value, Vermont’s taxes were three times higher than Florida’s.
In a case study released today, Public Assets Institute found that the difference in the accountant’s property tax bills is due to the difference in property values. The Vermont property is assessed at $1,041,900; the Florida property, which is classified as a working farm, is assessed at $209,000. The Vermont taxes are $12,359; the Florida taxes are about $3,256.
“Before we can have a rational discussion of tax policy in Vermont, we need to separate fact from fiction about our current tax system,” said Paul Cillo, executive director of Public Assets Institute.
“We hear anecdotes all the time about people moving away because of Vermont’s taxes, but we rarely get enough details to analyze the claims,” Cillo continued. “In this case, the accountant wrote an op-ed article, saying he owned property of similar value in South Hero, Vt., and Ocala, Fla., and that his Vermont property taxes were three times his Florida property taxes. We decided to check it out.”
“The accountant could have reduced his property tax bill as much or more by moving into a $476,000 Vermont farm enrolled in our current use program,” Cillo said. “Admittedly, he couldn’t play golf all year long, and there’d be a lot more snow to deal with. But if his goal was to reduce his property taxes, he could have done that without leaving.”
Cillo also suggested that the weather might be the real draw for people to flee south. In the case study, Public Assets found that more people from New Hampshire than from Vermont moved to Florida in 2007. Like Florida, New Hampshire has no state income tax, so lower taxes would not explain the New Hampshire emigration.
In his op-ed article, the accountant said nothing about his income, so it is not known whether he would be eligible for a property tax adjustment under Vermont’s education funding system. If he were eligible, he could reduce his Vermont tax bill substantially.
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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Press Release: Vermonters Would Pay More with Governor’s Budget Cuts
FOR IMMEDIATE RELEASE May 28, 2009
Contact:
Paul Cillo or Jack Hoffman
Public Assets Institute
802-223-6677
MONTPELIER – Vermont would lose millions of dollars in federal funding, more costs would be shifted onto the property tax, and vulnerable Vermonters would be squeezed even harder under the Douglas administration’s latest budget proposal.
The plan would begin the process of dismantling the state’s education funding system, currently the most stable and sustainable program in state government. And it also would eviscerate the Vermont Housing and Conservation Board, turning it into a pass-through for federal funds rather than the catalyst for affordable housing and land conservation it has been for more than 20 years.
These are among the findings of Public Assets Institute’s new report, Vermonters Would Pay More with Governor’s Budget Cuts, on the budget proposed by the Douglas administration last week. The governor has threatened to veto the budget passed by the Legislature earlier this month. The governor laid out his alternate plan, but so far the Legislature has shown little interest in the new proposal. Instead, legislative leaders are trying to secure the votes they would need to override a gubernatorial veto.
“The administration’s latest plan doesn’t reduce spending so much as it simply pushes costs of services on others, particularly many of Vermont’s most vulnerable citizens,” said Paul Cillo, president of Public Assets Institute. “This plan is more of an accounting exercise than a policy document. Who but a bean-counter would cut $15 million in health care services for the poor in order to save $4.5 million in the General Fund budget?”
In addition to losing federal Medicaid funds, Vermonters would forgo another $14 million to $16 million in federal funds that would be tied to the proposed cuts.
The Public Assets Institute report also challenges the administration’s assertions that education spending has “skyrocketed” in Vermont and the transfers to the Education Fund have been gobbling up a greater and greater share of the General Fund budget.
“Education spending as a share of the Vermont economy has been flat for nearly 20 years, and the General Fund’s share of education costs has been flat for the last eight year.” Cillo said. “The administration talks about sustainable spending. Vermont’s education spending is sustainable.”
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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State Can Enact Reforms to Support Unemployed
FOR IMMEDIATE RELEASE March 30, 2009
Contact:
Paul Cillo or Jack Hoffman
Public Assets Institute
802-223-6677
Vermont could get almost $14 million in federal money to help laid-off workers if the state reforms its unemployment insurance laws to expand eligibility, and both the Legislature and the administration are taking steps to qualify for the additional money. At the same time, though, the administration is looking for ways to cut unemployment benefits to address a looming shortfall in the unemployment insurance fund.
“During these times when many Vermonters are out of work and need help most, the state should be expanding eligibility and benefits, not cutting them back,” said Public Assets Institute Executive Director Paul Cillo.
The Unemployment Insurance Modernization Act (UIMA), which was rolled into the stimulus package that became law in February, contains incentives for states to provide new or expanded jobless benefits. Vermont already qualifies for some of the new money – about $4.6 million – because it has alternate ways to calculate eligible work history. However, the state must institute additional reforms to qualify for the remaining funds – $9.3 million.
Jack Hoffman, one of the report’s authors, said, “Vermont should adopt all of the UIMA reforms to keep pace with the changing nature of the workforce, which includes many more women and part-time and temporary workers. The stimulus funds provide a big financial boost that can make that happen.”
Two legislative committees have taken up the reforms in recent weeks. Sen. Vincent Illuzzi, R-Essex-Orleans, the chair of the Senate Economic Development, Housing, and General Affairs Committee, and Rep. Warren Kitzmiller, D-Montpelier, chair of the House Commerce and Economic Development Committee, have both indicated that they want to make the changes necessary to qualify for the additional funding. Hoffman testified before the Senate committee to encourage the members to adopt the reforms.
States can choose among four specific reforms to qualify for the full funding available through the UIMA. Vermont already meets one of the requirements, and the administration has recommended extending unemployment benefits for certain workers in training programs. That would allow Vermont to qualify for the additional $9.3 million. According to Tom Douse, deputy commissioner of labor, providing the extended benefits would cost approximately $1 million a year.
If Vermont adopted all of the additional reforms contained in the UIMA, the department said, it could cost as much as $7 million more a year. Currently, with unemployment rising, Vermont is spending about $5 million a week on jobless benefits.
Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
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Repealing Vermont’s Capital Gains Tax Break Would Ease Budget Woes and Improve Tax Fairness
FOR IMMEDIATE RELEASE
March 20, 2009
CONTACT:
Paul Cillo
Public Assets Institute
802.472.6222 direct
802.223.6677 office
Jeff McLynch
Institute on Taxation and Economic Policy
202.299.1066 x29
A new report released today by the Institute on Taxation and Economic Policy (ITEP) finds that Vermont could save upwards of $35 million per year if it were to repeal the tax break the state currently offers for income from capital gains. According to the report, A Capital Idea, Vermont is one of just nine states to grant preferential tax treatment to capital gains income. Together, those states will lose more than $660 million in 2008 from such policies.
“Vermont’s capital gains exclusion deprives the state of millions of dollars in needed funds, benefits almost exclusively the very wealthiest members of our communities, and fails to promote economic growth,” said Paul Cillo, Executive Director of the Public Assets Institute.
Jeff McLynch, ITEP’s Northeast Regional Director and one of the authors of the report, added, “Right now, legislators from Rhode Island to Hawaii are searching for solutions to mounting budget deficits, solutions that will allow them to fund vital public services without placing additional responsibilities on those families struggling to make ends meet. Repealing costly, inequitable, and ineffective tax breaks like Vermont’s capital gains exclusion are the first place they should look.”
In practice, very few working class Vermonters have capital gains income that is subject to taxation. As the report notes, taxpayers with adjusted gross incomes (AGI) of less than $50,000 comprised 69 percent of all federal returns filed by Vermonters in 2006, but constituted just 14 percent of returns with income from capital gains. In fact, taxpayers in this income group received just 5 percent of total capital gains income reported by Vermonters on their federal tax returns that year.
Gov. Jim Douglas has called for repeal of the capital gains exclusion.
“[A] working man or woman in Vermont making $50,000 a year pays nearly 50 percent more tax than someone who does not work and simply lives off investment or trust fund capital gains income in the same amount,” Douglas said in his 2008 State of State Address.
“Our state is one of only a few that has such an unfair penalty for doing an honest day’s work. This is grossly unfair. We must close this loophole and eliminate this working tax penalty.”
In early 2008, the governor proposed using the additional tax revenue from repeal of the capital gains exclusion to reduce tax rates on people in the higher tax brackets. Since then, however, Vermont has suffered a sharp drop in General Fund revenue, and the governor has recommended using property taxes to cover general state spending. Ending the “working tax penalty” would be a fairer way to close the General Fund budget gap.
A Capital Idea finds that the impact of repealing Vermont’s capital gains tax break would fall almost exclusively on the most affluent state residents. More specifically, 75 percent of the additional tax revenue generated by repeal would be paid by the richest 1 percent of taxpayers in Vermont — families and individuals with incomes over $369,700 in 2008. Said McLynch, “Vermont lawmakers face a clear choice: keep in place a tax break that largely benefits the wealthy few or repeal that tax break and fund the investments in education and infrastructure that will speed economic recovery.”
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Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org
Based in Washington, DC, the Institute on Taxation and Economic Policy is a non-profit, non-partisan research organization that seeks to inform policymakers and the public of the effects of current and proposed tax policies on tax fairness, government budgets, and sound economic policy. Copies of A Capital Idea, including detailed estimates of the impact repealing capital gains tax breaks would have in each of the nine states highlighted in the report, are available at www.itepnet.org.
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Stimulus Package Can Help Vermont Avoid Budget Cuts
FOR IMMEDIATE RELEASE
January 22, 2009
Contact:
Jack Hoffman
Public Assets Institute
Montpelier, Vermont
802-472-6222
jack@publicassets.org
MONTPELIER – Vermont could receive hundreds of millions of dollars in federal aid in the next two years, according to a new analysis of the economy stimulus package now making its way through the U.S. House. Some of the funds would be tied to expanding specific programs and therefore would not alleviate pressure on the state’s General Fund budget. However, the analysis shows that Vermont could get $124 million in “fiscal stabilization” funds, which would be targeted for education and general state expenditures, and perhaps as much as $250 million in additional Medicaid funding, which also could free up state dollars.
“Before we decimate programs that we’ll wish we had in a year or two, we should wait to see exactly what Vermont will receive through the new federal stimulus plan,” said Paul Cillo, executive director of Public Assets Institute. “The stimulus appears to be more aggressive than many people have been expecting. We need to understand it before we cut the state budget any further.”
The analysis of the American Recovery and Reinvestment Act was prepared by the Federal Funds Information Service in Washington, D.C., which tracks federal fiscal policies and appropriations on behalf of the National Governor’s Association and the National Conference of State Legislators. Additional analysis of increased Medicaid funding was prepared by the Center on Budget and Policy Priorities, also in Washington.
The stimulus bill has not been approved yet by the House and could see some changes before it is adopted. The Senate will pass its own version in the next few weeks, but it is not expected to be radically different from the House bill, at least in the funding to help the states. The analyses are based on the bill introduced by the House Appropriations Committee last week, and they are the best indications yet of the amount of funding that is likely to be available to individual states.
According to the analyses by Federal Funds Information Service and the Center on Budget and Policy Priorities, Vermont could get about $300 million in funding that could help reduce General Fund spending and close the projected budget gaps for 2009 and 2010. Some additional money also would be aimed at reducing cuts in education funding.
The Legislature’s Joint Fiscal Office estimates the current year budget gap to be $40 million-$55 million. The projected shortfall for 2010 is $176 million-$196 million.
The stimulus bill includes $124 million for “fiscal stabilization” for Vermont. According to the Federal Funds Information Service, about 60 percent of that money is to be used for education and the rest can be used to meet General Fund obligations. The Center on Budget and Policy Priorities has estimated that Vermont could get approximately $250 million in additional Medicaid funding between October 2008 and December 2010. Much of that money, too, would free up General Fund dollars, but the state would be required to maintain eligibility standards as they existed in 2008.
The House stimulus package contains money for special education and school construction, child care, highways, clean water and energy conservation programs. It is not clear at this point whether any of those funds could be used to reduce the need for appropriations from the state General Fund. The education programs, for example, include funding to help low-income, disadvantaged schoolchildren, construction grants and special education. Typically, whenever federal funding in those programs is increased, the additional money cannot be used to supplant existing funding. However, the specific requirements attached to the stimulus money won’t be known until the final bill is approved, probably in late February or perhaps early March.
For more information on preliminary analysis of the House stimulus package please click on the following links at the Center on Budget and Policy Priorities:
Medicaid:
http://www.cbpp.org/1-22-09sfp.htm
Other key provisions affecting low- and moderate-income individuals:
http://www.cbpp.org/1-22-09bud.htm
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Public Assets Institute is a non-profit, non-partisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org.
Let’s Put All Taxes on the Table, Not Just the Property Tax
FOR IMMEDIATE RELEASE
December 3, 2008
Contact:
Sarah Lyons
Public Assets Institute
Montpelier, Vermont
802-472-6222
sarah@publicassets.org
www.publicassets.org
MONTPELIER – Taking money from the state Education Fund to help balance the rest of the state budget will drive up property tax rates for Vermonters, Paul Cillo, executive director of Public Assets Institute, warned Wednesday.
Cillo was responding to a news report Tuesday in which Tax Commissioner Tom Pelham suggested that the Legislature might want to use an estimated $20 million surplus in the Education Fund to cover shortfalls in other programs. If the administration diverts the surplus, Cillo said, the money can’t be used to lower the property tax rate, which is the way the education funding system is supposed to work.
According to Cillo, Vermonters would see a 2-cent drop in the state property tax rate if the Legislature doesn’t raid the Education Fund. Governor Douglas has made high property taxes a key part of his affordability agenda. Cillo said he was surprised that the administration would do anything to push property taxes higher than they need to be.
“If the administration is going to increase tax rates to deal with the current fiscal crisis, all revenue options should be on the table. But, there are better alternatives than the property tax,” Cillo said.
According to Cillo, the administration and the Legislature need to be looking at revenues, as well as budget cuts, to deal with the current problem.
“The state budget is out of balance because revenues have fallen off sharply, not because Governor Douglas has been over-spending for the last six years,” Cillo said. “Vermont can’t rely solely on revenues any more than it can cut its way out of this problem. Both options – all options – need to be on the table.”
Cillo noted that Vermont took this kind of balanced approach during the recessions of the early 1980s and the early 1990s.
In both cases, the fiscal rescue package included budget cuts, higher tax rates and deficit spending, he said.
Vermont maintains an Education Fund reserve. Under state law, if there is a surplus above the 5 percent reserve, the tax commissioner is required to recommend a lower tax rate that would eliminate the surplus. In effect, the commissioner is obligated to recommend a tax rate that returns the surplus to property taxpayers.
On Dec. 1, the deadline for making his recommendation, the commissioner announced that current tax rates would generate a $20 million surplus, but declined to recommend a lower tax rate. On Tuesday, the commissioner told Vermont Public Radio that the Legislature might want to use the surplus “to help resolve our budget woes.”
Before the Legislature grabs the Education Fund surplus and forces Vermonters to pay higher property taxes, Cillo said, it should look at the alternatives for generating additional revenue.
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Public Assets Institute is a non-profit, non-partisan organization that promotes sounds budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org.
School-Budget Voters Are Minding Their Own Purse Strings (report release)
FOR IMMEDIATE RELEASE
February 20, 2008
Contact:
Paul Cillo
Public Assets Institute
Montpelier, Vermont
802-472-6222
paul@publicassets.org
www.publicassets.org
MONTPELIER – Vermont’s 10-year-old school funding system has helped to reduce disparities between property-rich and property-poor towns, and it has done so without encouraging the overspending that had been predicted, according to a new report issued today by Public Assets Institute.
“We looked at school spending town by town,” said Public Assets Institute President Paul Cillo, “and we found that those that got the most help from the Education Fund tended to have the lowest spending per pupil.”
The current funding plan eliminated the system of paying for schools primarily through local property taxes. The new system established a statewide property-tax base on which all towns could draw. While it was designed to create more equity among towns and taxpayers in their capacity to raise money for schools, some have suggested that the new funding law encourages poorer communities to take advantage of their wealthier neighbors.
Public Assets’ analysis found just the opposite is true. “In fact, there is a very strong disincentive in the law to keep spending down, especially for those with low and moderate incomes,” said Jack Hoffman, Public Assets Institute’s Senior Policy Analyst and an author of the report. “Lower spending per pupil means lower taxes.” According to the study:
• Towns that get more do not spend more. In fiscal 2008, on average, the more a town received from the Education Fund compared with what it paid in, the lower its per-pupil spending.
• The consequences of higher spending fall on the people who approved that spending. When a town chooses to increase per-pupil spending, the tax consequences are, on average, more than 200 times greater on the homestead taxpayers in that town than on property taxpayers in other towns.
• High per-pupil spending was linked to high resident income. Towns with more high-income residents voted higher school budgets than those with lower-income residents.
Act 60 was passed in 1997 to address what the Vermont Supreme Court called “the gross inequities in education opportunities.” It established a system in which a penny or percentage point on the tax rate raised the same amount in every town. The funding system maintained local control by giving communities the freedom to determine their own level of spending. However, it also required that in all towns with the same level of per-pupil spending, taxpayers had to make the same effort – that is, pay the same tax rates.
This mechanism that requires equal effort for equal resources has helped to increase equity among towns. But it also has proved to be a check on spending in towns that might appear to have an incentive to approve higher school budgets because of the return they get from the Education Fund. The analysis showed that the towns that get the best return, in fact, spend the least per pupil.
Another question that has been raised about Act 60 and Act 68 is how much spending decisions in one town affect taxpayers in other towns. Our study showed the effect is slight. And again, the fact that higher spending means higher tax rates appears to discourage taxpayers from trying to game the funding system.
The Public Assets Institute is a non-profit organization that researches and reports on state fiscal and policy matters. Public Assets supports democracy by helping people understand and keep informed about how their state government is raising and spending money and using other public assets.
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For more information, contact: Jack Hoffman, Public Assets Institute, 802-223-6677 or jack@publicassets.org
Public Assets Institute Hires Jack Hoffman
FOR IMMEDIATE RELEASE
October 10, 2007
Contact:
Paul Cillo
Public Assets Institute
Montpelier, Vermont
802-472-6222
paul@publicassets.org
www.publicassets.org
Public Assets Institute Hires Jack Hoffman
Former Vermont Press Bureau Chief will act as Senior Policy Analyst
MONTPELIER – Former Vermont Press Bureau Chief Jack Hoffman has joined the Public Assets Institute as senior policy analyst, PAI President and Founder Paul Cillo announced today.
“As a reporter, Jack had a reputation of actually liking to study spreadsheets and budget information, and he took some ribbing for it,” Cillo said. “But someone with Jack’s experience and interests is just the person to help us fulfill the mission of the Public Assets Institute — to provide timely, accurate information and analysis about state tax and budget issues and promote government policies that improve the wellbeing of ordinary Vermonters, especially the most vulnerable.”
In anticipating his new job, Hoffman stressed the importance of information and openness, which he called “two key ingredients of good government.” He added: “We need to get away from the knee-jerk notion that government is the root of all evil and never part of the solution. We’re supposed to be a democracy, after all, and government has an important role to play in addressing many of the problems we face today. I look forward to helping Vermonters gain a better understanding of the workings of their state government.”
Hoffman covered politics and state government in Montpelier for 20 years with the Vermont Press Bureau, the capital bureau for the Rutland Herald and Barre-Montpelier Times Argus. He served as bureau chief for 14 years, during which time he also wrote a weekly column. Hoffman covered many of the major stories in Vermont, including the state raid on the Northeast Kingdom Community Church in Island Pond, Madeleine Kunin’s six-year term as Vermont’s first female governor, Act 60 and education finance reform, and the passage of Vermont’s civil union law. After leaving the Bureau in 2002, he served for five years as executive director of the Vermont Broadband Council, a non-profit organization promoting the use and availability of broadband in the state.
As senior policy analyst for Public Assets Institute, Hoffman will research, analyze, and report on state tax and budget policies and help PAI become an important resource for residents, businesses, journalists, and non-profit organizations in understanding how and where Vermont is using its public assets.
Before becoming a reporter, Hoffman traveled extensively in Africa and tried – unsuccessfully and perhaps foolishly – to start a motorcycle safari business in Kenya. He served as a Peace Corps volunteer in Libya in the late 1960s. Except for a few extended travel breaks, Hoffman has lived in Vermont since 1965. He and his wife now live in Marshfield, where he serves on the Twinfield Union School Board.
The Public Assets Institute (PAI) is an independent, nonpartisan nonprofit founded in 2003. In September, it published The State of Working Vermont 2007 in cooperation with the Economic Policy Institute in Washington, DC. On October 23, with Voices for Vermont’s Children, PAI will convene Choices for Vermont, a statewide conference to discuss Vermont’s fiscal challenges, along with ways to make Vermont a state where everyone can prosper.
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Vermont’s Workforce Well-Educated but Underutilized
FOR IMMEDIATE RELEASE
September 6, 2007
Contact:
Paul Cillo
Public Assets Institute
Montpelier, Vermont
802-472-6222
paul@publicassets.org
www.publicassets.org
Vermont’s Workforce Well Educated but Underutilized
Wages and income lag behind region, says Public Assets Institute report
MONTPELIER, VT – Vermont has a highly educated workforce and enjoys low unemployment and the highest workforce participation rate in New England. But the state’s wages and median household income remain well below regional standards. In fact, real wages for those with a four-year college degree have gone down.
These are among the findings of “The State of Working Vermont 2007,” a new brief prepared by the Public Assets Institute. The report highlights Vermont employment, wages, and workforce trends, drawn from 2006 government data. It is produced in cooperation with the Economic Policy Institute (EPI), a Washington-based economic think tank.
“Vermonters are well educated and hard working, but the wages they receive are among the lowest in New England,” said Paul Cillo, president of the Public Assets Institute. “The state has kept the minimum wage above the federal level,” he said. “But that’s not enough. We need an economic development strategy that effectively uses Vermont’s best asset: its workers.”
Among the brief’s primary findings:
• Vermont’s labor force participation, at 72 percent, is higher than the national average and that of the other states in New England.
• Vermont’s workforce is very well educated. In 2006, more than a third of the state’s workers had a four-year college degree and over ninety percent have finished high school. Since 1980, the gap in wage growth between workers with a college degree (40 percent growth) and a high school degree (27 percent growth) has been steady, although real wages for those with a college degree have fallen since 2002.
• With net gains in construction, education, health services, and government, Vermont saw just under 3 percent net job growth since 2000, the second-highest gain in New England (after Rhode Island). In spite of economic development strategies to strengthen private-sector job growth, it has been weak since 2001.
• Like other states in the region, Vermont lost a significant number of jobs in the manufacturing and information industries. Many of Vermont’s new jobs are low-paying service jobs.
• Despite a 9 percent growth in its median wage since 2000 ($14.95 in 2006), Vermont’s median wage remains the second lowest in the region (behind Maine) and only slightly above the national median wage of $14.81.
• Gender equity has continued to improve in Vermont. Women earned 87 cents to every dollar men earned in 2006, but female median wages ($13.82) were the second lowest in the region, next to Maine.
This brief is available on the Public Assets Institute’s website at www.publicassets.org.
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New Analysis Finds Vermont Hit Hard by Cuts in President’s Budget for 2008
FOR IMMEDIATE RELEASE
February 22, 2007
Contact:
Paul Cillo
Public Assets Institute
Montpelier, Vermont
802-472-6222
paul@publicassets.org
www.publicassets.org
New Analysis Finds Vermont Hit Hard by Cuts in President’s Budget for 2008
(Montpelier) – Vermont would lose $34 million in federal funding next year alone for a wide range of public services, including K-12 education and Head Start, under the President’s budget for 2008 according to a report released by the Washington, DC-based Center on Budget and Policy Priorities. The funding cuts, scheduled to deepen in future years under the President’s proposal, would force Vermont to either raise taxes to compensate for the lost federal funds, or reduce support for Vermont’s critical public structures.
Paul Cillo, President of the Public Assets Institute, who reviewed the analysis, expressed disappointment at the President’s priorities. “This budget says that maintaining critical infrastructure in Vermont such as education, safe drinking water, and public safety is not as important as extending tax breaks, including tax giveaways for millionaires. These priorities would send Vermont and the country in the wrong direction,” he said.
“This budget is especially bad news for Vermont,” Cillo said, ” because the state has become increasingly reliant on federal funds to pay for basic public services. About one-third of the state’s services are paid for with federal dollars.”
Cillo noted that this budget worsens the federal deficit by including massive tax cuts along with the program cuts. “The President’s budget deepens the federal deficit because the tax cuts would cost much more than the program cuts would save,” he said.
“This budget is also roadmap toward greater inequality,” Cillo added. Under the President’s budget, the average millionaire nationally would receive $162,000 in 2012 alone, while funding cuts would harm low- and moderate-income families in Vermont and across the country. Many low income families could end up losing child care assistance and job training. Pregnant women could lose supplemental nutrition for themselves and their young children. The elderly and individuals with disabilities could lose help with heating their homes.
Some programs that help large numbers of Vermonters would be eliminated entirely. Other programs would be cut deeply over the next five years. The new Center on Budget and Policy Priorities report estimates, for example, that the President’s budget would:
- Cut federal K-12 education funding to Vermont by $25 million over the next five years, relative to the 2007 level. The President’s proposal would take back much of the additional funding Congress provided to help states implement the federal No Child Left Behind law and would push property taxes higher.
- Cut Vermont’s child care funding by $600,000 over the next five years relative to the 2007 level. Today, federal child care funding is already below the 2002 level.
- Cut Vermont’s Head Start funding by $5 million over the next five years relative to the 2007 level. These cuts would come on top of cuts already made to the program.
Faced with these funding cuts, Vermont’s Head Start programs have several choices. They can serve fewer children; cut back on teachers’ salaries, classroom materials, and the specialized services they provide to children; or they can try to raise money from other sources. The federal funding Vermont would receive in 2008 would serve 200 fewer children than we would serve if funding had kept pace with inflation since 2002.
- Cut Vermont’s funding for low-income energy assistance by $2 million next year and by $12 million over the next five years. The Low-Income Home Energy Assistance Program (LIHEAP) provides funding to states to help vulnerable households pay their home heating bills. Most households that receive LIHEAP include someone who is elderly or a person with disabilities. The increase in energy prices over the past few years has made LIHEAP more important than ever.
- Cut Vermont’s funding for clean and safe drinking water by $2 million next year and by $13 million over the next five years. Some of the biggest cuts in the President’s budget would come in environmental programs. Vermont relies on federal resources for sewage treatment plants and clean drinking water programs. Wastewater infrastructure projects would be cut significantly. Under the budget, these funds nationally would be 40 percent smaller in 2008 than in 2001.
- Cut Vermont’s community development funding by $1.7 million next year and by $10 million over the next five years. The Community Development Block Grant (CDBG) helps fund a range of community development projects in Vermont including housing and homeless programs, improvements to public facilities such as senior and youth centers, and economic development. CDBG already has seen substantial funding cuts in recent years.
- Eliminate grants that assist state and local law enforcement in Vermont, costing Vermont $1.2 million in funding next year and $6.5 million over the next five years. The budget would replace a program that supports crime prevention and corrections activities, and a program which helps offset the cost of incarcerating undocumented immigrants, with two much smaller competitive grant programs. The new programs would receive only about half the funding of the programs they replace. While some states would qualify for funding under the new competitive programs, there is no way to know how the funds would be distributed.
Cillo concluded with a call to change direction. “It’s time now to set a new course. By making the right choices, Congress can craft a budget that meets Vermonters’ priorities while pursuing a more fiscally responsible path than the President has proposed.”
For more information and the complete reports and estimates from the Center on Budget and Policy Priorities go to: http://www.cbpp.org/2-21-07bud.htm
The Public Assets Institute does independent research and analysis on budget, tax, and economic
issues (www.publicassets.org).
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The State of Working Vermont 2006 report
FOR IMMEDIATE RELEASE
September 12, 2006
Contact: Amy Seif
Carsey Institute
603-862-4650
amy.seif@unh.edu
Paul A. Cillo
Public Assets Institute
Montpelier, Vermont
802-472-6222
paul@publicassets.org
www.publicassets.org
Vermont Employment Rates High, But Wage Levels Low
Public Assets Institute and Carsey Institute Publish Brief on State of Working Vermont
DURHAM, N.H. – Vermont enjoys higher-than-average workforce participation rates and the lowest unemployment in New England, but the state’s wage levels remain well below regional standards and the workforce is aging, finds a new issue brief prepared by the Carsey Institute at the University of New Hampshire in partnership with the Public Assets Institute of Vermont. The brief, “The State of Working Vermont 2006,” highlights trends related to the economic and labor force characteristics of Vermont’s workers. It is produced in cooperation – and its release coincides – with the Economic Policy Institute’s (EPI) national report, “The State of Working America 2005/2006.”
“Vermonters are working, but the wages they receive are still below those in New England and the rest of the country,” said Paul Cillo, president of the Public Assets Institute. “While the state has kept the minimum wage above the federal level and the state poverty rate is low, the continuing loss of good-paying manufacturing and information jobs are of concern.”
“With an aging workforce, the state may face difficulties as greater numbers of Baby Boomers begin to retire. It is clear that Vermont has an interest in keeping the state desirable for young and middle age workers,” added Carsey Institute director Cynthia “Mil” Duncan.
Among the brief’s primary findings:
• While Vermont’s labor force participation, at 71 percent, compares favorably to the nation and other states in New England, it has declined since 1999 for all groups except older workers. Thus, one in five of the state’s workers was 55 years of age or older in 2005. Further, participation among workers between the ages of 25 and 54 has dropped from 71 percent of the workforce in 1999 to 65 percent in 2005. “Other research documents similar trends, and some analysts are warning of a serious decline in the working age population in Vermont and the larger New England region,” said brief author Allison Churilla, a policy fellow at the Carsey Institute and a Ph.D. candidate in sociology at UNH.
• Bolstered by gains of jobs in construction, education, and health services, Vermont saw a two percent increase in job growth, the second-highest gain in New England (after Rhode Island at three percent). Like other states in the region, Vermont lost a significant number of jobs in the manufacturing and information industries.
• Despite a seven percent growth in its median wage since 2000 ($14.13 in 2005), Vermont’s median wage remains the second lowest in the region (behind Maine) and is below the national median wage of $14.28. The gap in wage growth between high-wage and middle- and low-wage workers is significant – 32 percent versus 20 percent since 1979 – but has remained steady since 2000.
• Consistent with the rest of New England, Vermont’s workforce is very well-educated. In 2005, one-third of the state’s workers had a four-year college degree and almost 60 percent had some college education. Since the late 1980s, the gap in wage growth between workers with a college degree (31 percent growth) and a high school degree (seven percent growth) has been steady.
• Gender equity is on the rise in Vermont, which had the highest female labor force participation (66 percent) and lowest female unemployment rate (three percent) in the region in 2005. Women earned 87 cents to every dollar men earned in 2005, the highest earnings ratio in New England, but female median wages ($13.27) were the second-lowest in the region, next to Maine.
Last week, the Carsey Institute released another issue brief, “The State of Working New Hampshire 2006,” that provides a similar analysis of that state’s labor statistics. This brief is available on the Carsey Institute’s website at http://www.carseyinstitute.unh.edu
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Vermont’s Public Assets Institute, established in December 2003, conducts research, performs fiscal analysis, disseminates information, and develops policies that apply the powers of government to improving the wellbeing of ordinary citizens, especially the most vulnerable.
The Carsey Institute at the University of New Hampshire conducts research and analysis on the challenges facing families and communities in New Hampshire, New England, and the nation. The Carsey Institute sponsors independent, interdisciplinary research that documents trends and conditions affecting families and communities, providing valuable information and analysis to policymakers, practitioners, the media, and the general public. Through this work, the Carsey Institute contributes to public dialogue on policies that encourage social mobility and sustain healthy, equitable communities.
The Carsey Institute was established in May 2002 with a generous gift from UNH alumna and noted television producer Marcy Carsey.
Editors and reporters: For a copy of the report, or to schedule an interview with report author, Allison Churilla, contact Amy Seif at amy.seif@unh.edu or 603/862-4650.FOR IMMEDIATE RELEASE
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