Public Assets Institute http://publicassets.org forward thinking for Vermont’s common good Fri, 22 Sep 2017 14:43:28 +0000 en-US hourly 1 Poverty-fighting programs work http://publicassets.org/blog/poverty-fighting-programs-work/ http://publicassets.org/blog/poverty-fighting-programs-work/#respond Fri, 22 Sep 2017 14:43:28 +0000 http://publicassets.org/?p=11644 Vermont made headlines last week when the U.S. Census released its latest statistics for 2016: We were the only state to show an increase in the poverty rate. That may have been an artifact of the Census survey sample. The poverty rate showed an unusual drop in 2015, and 2016 looks more like a return to normal than a real increase. Read more

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Vermont made headlines last week when the U.S. Census released its latest statistics for 2016: We were the only state to show an increase in the poverty rate. That may have been an artifact of the Census survey sample. The poverty rate showed an unusual drop in 2015, and 2016 looks more like a return to normal than a real increase.

The Census released another poverty report week week that didn’t get as much attention. The Supplemental Poverty Measure report tells a different story and the data contain more encouraging news: public services and assistance do lift people out of poverty.

The official poverty measure is widely seen as outdated because it doesn’t take into account the anti-poverty programs and policies adopted in the last 50 years. Created in the late 1960s, the official measure of need was calculated as three times the cost of a minimum food diet for families of varying sizes. The family’s pre-tax cash income determined whether it was above or below this calculated “poverty threshold.” (See Table 1.)

The Supplemental Poverty Measure recognizes that tax credits and other benefits are available to low-income families to help them meet their basic needs. So non-cash benefits are counted along with cash income—minus taxes and certain work expenses—to determine a family’s resources. On the cost side, the Supplemental Poverty Measure uses a more realistic estimate of basic needs like food, shelter, clothing and utilities. The Supplemental Poverty thresholds are somewhat higher, but the poverty measure takes into account additional resources.

For state level data, the Census uses three-year averages to calculate Supplement Poverty Measures. Vermont’s Supplement Poverty Measure for 2014-2016 was 8.6 percent, according to new data released this week. The state’s “official” poverty rate for the same period was 9.9 percent.

Because the Supplemental Poverty Measure takes into account things like food stamps (known as 3SquaresVT in Vermont), the Earned Income Tax Credit, and other forms of public assistance, it’s possible to calculate the effects of these efforts. A 2015 analysis by The Center on Budget Policies and Priorities in Washington, D.C. concluded that an average of 96,000 more Vermonters would have been below the Supplement Poverty Threshold if they had not received government assistance.1 According to the CBPP report, Vermont’s Supplemental Poverty Measure was 8.2 percent for the period analyzed—instead of the 23.7 percent rate it would have been without public policies and programs to help low-income families.

Vermont has to do more to increase wages so that full-time work pays enough to support a family. But it also has an obligation to maintain support for services that do lift Vermonters out of poverty.

  1. The study was based on four years of Census data (2009-2012). The number of people kept above the Supplemental Poverty threshold is the annual, four-year average.
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A better outlook for jobseekers, but not for the poor http://publicassets.org/library/publications/a-better-outlook-for-jobseekers-but-not-for-the-poor/ http://publicassets.org/library/publications/a-better-outlook-for-jobseekers-but-not-for-the-poor/#respond Fri, 15 Sep 2017 17:41:08 +0000 http://publicassets.org/?p=11627 In August the number of Vermonters officially unemployed dropped to its lowest level in more than 16 years: 10,445, according to the U.S. Bureau of Labor Statistics. It’s the first time since March 2001 that the number has dipped below 10,500. Only people who are jobless and actively seeking work are counted as “unemployed.” Low unemployment means a shortage of workers, which should push up wages.

Poverty up In the latest Census data, released this week, Vermont was the only state to show an increase in poverty. The number of Vermonters in poverty last year rose by 10,000, to just over 71,000. In 2015, poverty fell by almost 12,000, a sharp drop that does not fit Vermont’s pattern of recent years. Since before the start of the recession nearly 10 years ago, the state’s poverty rate has trended upward.

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In August the number of Vermonters officially unemployed dropped to its lowest level in more than 16 years: 10,445, according to the U.S. Bureau of Labor Statistics. It’s the first time since March 2001 that the number has dipped below 10,500. Only people who are jobless and actively seeking work are counted as “unemployed.” Low unemployment means a shortage of workers, which should push up wages.

 

 

 

Poverty up
In the latest Census data, released this week, Vermont was the only state to show an increase in poverty. The number of Vermonters in poverty last year rose by 10,000, to just over 71,000. In 2015, poverty fell by almost 12,000, a sharp drop that does not fit Vermont’s pattern of recent years. Since before the start of the recession nearly 10 years ago, the state’s poverty rate has trended upward.

 

 

Incomes flat
After adjusting for inflation, the Vermont median household had about the same annual income in 2016 as it did a decade earlier. Median income—half of households make less and half make more—tallied at $57,677 last year, an increase of just 0.2 percent over 2015, adjusted for inflation. Vermont’s overall economy also has been inching up—less than 1.0 percent in 2016. But many Vermonters’ incomes have grown even more slowly.

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2017 Report Card http://publicassets.org/library/publications/reports/2017-report-card/ http://publicassets.org/library/publications/reports/2017-report-card/#respond Tue, 12 Sep 2017 18:40:36 +0000 http://publicassets.org/?p=11604 Vermont made progress this year making the kinds of investments that can move the state forward and create an economy that works for everyone. The 2017 Report Card is based on a set of policy recommendations published last year called “A Framework for Progress: Investing in Vermont’s people, infrastructure, and good government.”

To continue to advance these issues, we compiled this short report card assessing the progress made on each of the recommendations during the 2017 legislative session.

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Vermont made progress this year making the kinds of investments that can move the state forward and create an economy that works for everyone. The 2017 Report Card is based on a set of policy recommendations published last year called “A Framework for Progress: Investing in Vermont’s people, infrastructure, and good government.”

To continue to advance these issues, we compiled this short report card assessing the progress made on each of the recommendations during the 2017 legislative session.

Download (PDF, Unknown)

 

 

 

 

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Livable wage http://publicassets.org/library/presentations/livable-wage/ http://publicassets.org/library/presentations/livable-wage/#respond Mon, 11 Sep 2017 19:09:07 +0000 http://publicassets.org/?p=11598 Download (PDF, Unknown)

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Act 60 created new opportunity for kids http://publicassets.org/blog/act-60-created-new-opportunity-kids/ http://publicassets.org/blog/act-60-created-new-opportunity-kids/#comments Thu, 07 Sep 2017 15:40:04 +0000 http://publicassets.org/?p=11584 As students across Vermont start the 2017-18 school year it’s worth reflecting on what happened 20 years ago. In 1997 the Vermont Supreme Court’s Brigham decision forced policymakers to develop a more equitable funding system. That system, established by Act 60, created a statewide school tax and gave students from all over the state more equal access to resources and opportunity. Read more

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As students across Vermont start the 2017-18 school year it’s worth reflecting on what happened 20 years ago. In 1997 the Vermont Supreme Court’s Brigham decision forced policymakers to develop a more equitable funding system. That system, established by Act 60, created a statewide school tax and gave students from all over the state more equal access to resources and opportunity. Below, we address some basic questions about Act 60.

What problem were we trying to solve?
Before 1997 Vermont had vast inequalities in education and tax bills from town to town. Towns with ski resorts, lakes, lots of stores, or high-value homes enjoyed well-funded schools with low tax rates. Property-poor towns had to tax themselves at high rates to afford barely adequate schools. For Vermont’s children, geography was destiny. The quality of a child’s education was directly related to the property wealth of the town she lived in.

What did we do, and does it work?
Vermont enacted the Equal Educational Opportunity Act—Act 60—which equalized education funding across the state. Under the law, any two towns that vote to spend the same amount per pupil have the same tax rate. The system delivers resources to locally controlled schools in a way that’s fair to both students and taxpayers.

What changed?

  • Town property wealth no longer determines a child’s fate. Schools remain locally controlled, but we now all share responsibility for funding them. Instead of thinking about “our kids” as only those in our own town, we recognize that “our kids” includes all the children in Vermont.
  • We redesigned the school tax collection and distribution system. In the past a town’s tax revenue stayed in that town to support its school. Now we have a statewide system, where all school tax money goes into the state Education Fund and is equally accessible to every school. Today’s system is more like the Transportation Fund. We all appreciate that the state’s roads and bridges need to be in good shape to benefit the whole state—so all taxpayers contribute to the fund that improves infrastructure in any town where it’s needed.

What’s the next challenge?
Funding equity is necessary, but it’s not enough to ensure that every child succeeds in school. We also need to address the obstacles of poverty, racism, sexism, and ableism.

Vermont leads the way
When Vermont took the step 20 years ago to solve its education funding problem, nearly all the states were struggling with the same issue. We were not the only state whose Supreme Court said we had to fix the problem, but we are one of the only states that really fixed it.

 

pdficonIssue Brief in PDF

 

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20 years ago, Act 60 fundamentally changed the way Vermont pays for public education http://publicassets.org/library/publications/reports/20-years-ago-act-60-fundamentally-changed-the-way-vermont-pays-for-public-education/ http://publicassets.org/library/publications/reports/20-years-ago-act-60-fundamentally-changed-the-way-vermont-pays-for-public-education/#respond Thu, 07 Sep 2017 14:53:05 +0000 http://publicassets.org/?p=11574 What problem were we trying to solve? Before 1997 Vermont had vast inequalities in education and tax bills from town to town. Towns with ski resorts, lakes, lots of stores, or high-value homes enjoyed well-funded schools with low tax rates. Property-poor towns had to tax themselves at high rates to afford barely adequate schools. Read more

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What problem were we trying to solve?
Before 1997 Vermont had vast inequalities in education and tax bills from town to town. Towns with ski resorts, lakes, lots of stores, or high-value homes enjoyed well-funded schools with low tax rates. Property-poor towns had to tax themselves at high rates to afford barely adequate schools. For Vermont’s children, geography was destiny. The quality of a child’s education was directly related to the property wealth of the town she lived in.

What did we do, and does it work?
Vermont enacted the Equal Educational Opportunity Act—Act 60—which equalized education funding across the state. Under the law, any two towns that vote to spend the same amount per pupil have the same tax rate. The system delivers resources to locally controlled schools in a way that’s fair to both students and taxpayers.

What changed?
• Town property wealth no longer determines a child’s fate. Schools remain locally controlled, but we now all share responsibility for funding them. Instead of thinking about “our kids” as only those in our own town, we recognize that “our kids” includes all the children in Vermont. 

• We redesigned the school tax collection and distribution system. In the past a town’s tax revenue stayed in that town to support its school. Now we have a statewide system, where all school tax money goes into the state Education Fund and is equally accessible to every school. Today’s system is more like the Transportation Fund. We all appreciate that the state’s roads and bridges need to be in good shape to benefit the whole state—so all taxpayers contribute to the fund that improves infrastructure in any town where it’s needed.

What’s the next challenge?
Funding equity is necessary, but it’s not enough to ensure that every child succeeds in school. We also need to address the obstacles of poverty, racism, sexism, and ableism.

Vermont leads the way
When Vermont took the step 20 years ago to solve its education funding problem, nearly all the states were struggling with the same issue. We were not the only state whose Supreme Court said we had to fix the problem, but we are one of the only states that really fixed it.

pdficonPDF Version

 

 

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State budget rescissions http://publicassets.org/blog/state-budget-rescissions/ http://publicassets.org/blog/state-budget-rescissions/#comments Thu, 24 Aug 2017 21:08:58 +0000 http://publicassets.org/?p=11568 The governor’s office and the Legislature agreed in mid-August on how to close a $12.6 million budget gap that came to light after the Legislature adjourned its 2017 session.

The gap surfaced last month when economists for the Legislature and the administration lowered their estimate of how much revenue the state can expect to collect this fiscal year. Read more

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The governor’s office and the Legislature agreed in mid-August on how to close a $12.6 million budget gap that came to light after the Legislature adjourned its 2017 session.

The gap surfaced last month when economists for the Legislature and the administration lowered their estimate of how much revenue the state can expect to collect this fiscal year. The good thing about the plan approved on August 17 is that it includes relatively little in actual cuts.

About $4.6 million of the shortfall will be covered on the revenue side. There is money left over from the last fiscal year, and the administration evidently is now more optimistic about brokerage fees.

The plan includes about $6.2 million in savings on Medicaid. Those appear to be genuine savings. Caseloads are expected to be lower than originally thought, and the administration believes it won’t need to spend all of the money that was appropriated two months ago.

The real cuts amount to about $1.7 million and will be felt primarily in the Department of Public Safety, Department of Financial Regulation, and Department of State’s Attorneys and Sheriffs.

With the Legislature out of session, this was as good of a stopgap measure as could be expected.

But Vermont has been struggling with chronic budget gaps since before the Great Recession, which is to say for more than a decade. It’s time for the Legislature to look at the state revenue system and make needed changes so that it better serves the needs of Vermonters.

We all know that deferred maintenance leads to higher spending in the end. We can’t afford to wait any longer to make needed investments in Vermont’s future.

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Vermont’s labor force hits a 15-year low http://publicassets.org/library/publications/vermonts-labor-force-hits-a-15-year-low/ Fri, 18 Aug 2017 18:48:42 +0000 http://publicassets.org/?p=11552 In July Vermont’s labor force dropped to its lowest level in 15 years. The labor force comprises people who are employed, including self-employed, and those who are unemployed but actively job hunting. Vermont’s labor force fell to 343,850 last month—the lowest level since July 2002, when it numbered 343,835. Read more

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In July Vermont’s labor force dropped to its lowest level in 15 years. The labor force comprises people who are employed, including self-employed, and those who are unemployed but actively job hunting. Vermont’s labor force fell to 343,850 last month—the lowest level since July 2002, when it numbered 343,835. The unemployment rate also dropped in July, to 3.1 percent. The decline in the labor force tells us that unemployment shrank not because people found jobs, but because they stopped looking.

 

New jobs
Even while the workforce shrank, employers added 2,800 jobs in thefirst seven months of this year. The latest annual data show Vermont among the three New England states—behind Massachusetts and New Hampshire—with more non-farm payroll jobs in 2016 than in 2007, before the Great Recession. Connecticut, Maine, and Rhode Island still have not recovered all the jobs they lost.

 

 

Unlivable
Bills pending in Montpelier would increase Vermont’s minimum wage to $15 an hour between 2022 and 2026. But that may not be soon enough. Since 2004 the state’s minimum wage has averaged about two-thirds of the livable wage, as calculated by the Joint Fiscal Office. The livable wage is the hourly pay required for a full-time worker to afford one-half the basic needs—like housing, food, and transportation—of a two-person household with no children and employer-sponsored health insurance. 

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Speaking with one voice on health care http://publicassets.org/blog/speaking-with-one-voice-on-health-care/ http://publicassets.org/blog/speaking-with-one-voice-on-health-care/#comments Fri, 04 Aug 2017 17:09:04 +0000 http://publicassets.org/?p=11545 Vermont is lucky. Even with divided state government and occasional partisan spats, our leaders on both sides of the aisle can agree that taking health care away from millions of Americans is a bad idea.

At a conference I attended in Boise, Idaho last week, state-level policy leaders from around the country discussed the potential impact of the repeal of the Affordable Care Act (ACA). Read more

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Vermont is lucky. Even with divided state government and occasional partisan spats, our leaders on both sides of the aisle can agree that taking health care away from millions of Americans is a bad idea.

At a conference I attended in Boise, Idaho last week, state-level policy leaders from around the country discussed the potential impact of the repeal of the Affordable Care Act (ACA). Many of them were fighting to convince their governors, senators, and representatives that slashing Medicaid funding, disrupting the individual insurance market, and putting their constituents’ health in danger would be devastating.

But not in Vermont. Here we’re fortunate to have our senators, representative, and governor all on the same side. Governor Phil Scott joined a bipartisan group of 11 governors last month to urge the U.S. Senate not to repeal the ACA, but to work with governors to fix it. Senators Leahy and Sanders not only voted against repeal, but made strong statements denouncing the attempts to take health care away from Vermonters. Representative Welch voted against the plan proposed in the U.S. House and supports a bipartisan path to better health care.

The effects of any of the proposals considered so far in Congress would be harmful to Vermont. Estimates by the Urban Institute and the AARP showed that the state’s uninsured rate would nearly triple under the various plans, stripping health coverage from over 30,000 Vermonters. The state would lose hundreds of millions of dollars a year in federal funding, and Vermonters purchasing insurance on the individual market would see costs go up by thousands of dollars per year.

Governors know better than most how cuts at the federal level can affect their states—federal funds make up more than a third of Vermont’s budget—and their voices are important in the debates in Washington.

This isn’t the first time Republican Governor Scott has taken a stand against national Republican leadership. In January, he protested President Trump’s executive order restricting immigration and refugee resettlement, and he has questioned tactics by Immigration and Customs Enforcement officers.

At least for now, Vermonters can breathe a sigh of relief knowing that recent national health care gains are secure. But maybe it’s not luck that produced the unified voice we heard this summer. Maybe it’s what Vermonters expect from their leaders.

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It’s the property tax that’s unfair http://publicassets.org/blog/its-the-property-tax-thats-unfair/ http://publicassets.org/blog/its-the-property-tax-thats-unfair/#comments Thu, 03 Aug 2017 18:25:17 +0000 http://publicassets.org/?p=11540 Economist Art Woolf wrote recently that Vermont spends too much on education because taxes are too low for many residents. Woolf was referring specifically to resident homeowners who qualify to pay school taxes as a percentage of their income rather than on the value of their property. According to Woolf, because their income-based taxes are less than their property taxes would be, these homeowners feel like education in Vermont is on sale, so they’re buying more of it.

One problem with Woolf’s hypothesis is that it assumes that the value of a primary residence is a fair and rational indicator of how much each Vermonter should be contributing to the education of our children. It may have been 200 years ago, when the value of a person’s property and possessions was the best measure of his ability to pay. But that isn’t true today, and the system should be brought up to date with today’s economy.

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Economist Art Woolf wrote recently that Vermont spends too much on education because taxes are too low for many residents. Woolf was referring specifically to resident homeowners who qualify to pay school taxes as a percentage of their income rather than on the value of their property. According to Woolf, because their income-based taxes are less than their property taxes would be, these homeowners feel like education in Vermont is on sale, so they’re buying more of it.

One problem with Woolf’s hypothesis is that it assumes that the value of a primary residence is a fair and rational indicator of how much each Vermonter should be contributing to the education of our children. It may have been 200 years ago, when the value of a person’s property and possessions was the best measure of his ability to pay. But that isn’t true today, and the system should be brought up to date with today’s economy.

The education of children is one of society’s most important responsibilities, and we all benefit when children can grow to be informed, productive, contributing members of the community. Because we all benefit, we each need to contribute our fair share to the cost of education—that is, according to our ability to pay. In our present-day economy, a better and fairer indicator of a person’s ability to pay is income, not the assessed value of one particular piece of property.

Nearly 50 years ago, Vermont recognized that property values did not reflect people’s ability to pay. At the time, newcomers were moving to Vermont and driving up property values, but older residents living on fixed incomes didn’t have the money to pay their higher tax bills. To avoid pushing people out of their homes, Vermont instituted a rebate program for older homeowners whose property taxes exceeded a certain percentage of their income. This ability-to-pay concept was later incorporated into the state’s current education funding system. Today, about two-thirds of Vermont homeowners pay school taxes based on their household income rather than the value of their home.

Woolf argues that these people are getting a break, and that because they’re getting a break, they feel they can afford to spend more on education. But studies done by the Vermont Tax Department over the years show something different: that many high income Vermonters who pay property taxes are the ones getting a break. People with annual incomes of $500,000 or more typically pay a smaller percentage of their income to support schools than do Vermonters with incomes of $60,000 or $70,000. Given the importance of education, shouldn’t those who benefit most from society contribute the most to the cost of educating our children?

There is a problem of fairness with Vermont’s two-tiered system, but the solution is not a return to the school property tax for all Vermont resident homeowners. A fair system would have all Vermont residents pay school taxes based on their income and all non-residential property owners continue to pay the property tax.

 

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