Update April 2011

In this issue:
-- Tax Flight? Forget About It
-- One Budget, Two Big Problems
-- Mixed News For Working Vermonters
-- No Tax Reform This Year
-- A Third Way to Tackle the Federal Deficit

Tax Flight? Forget About It
Vermont shouldn't worry that higher taxes will drive residents away or keep people from moving in. In fact, taxes hardly affect the decision about where to live. Except this way: People move toward job opportunities, low crime, and affordable housing—all of which can be promoted by the wise use of tax revenues. These were among the key findings and suggestions of "The Impact of Taxes on Migration in New England," a new 50-state study from the Political Economy Research Institute (PERI) at the University of Massachusetts, released this month by Public Assets. Read more here.

One Budget, Two Big Problems
"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, on the release of its fiscal 2012 budget report earlier this month. "Gov. Peter Shumlin has begun to address Vermont's structural budget problems by proposing reforms to the health care system"—but in the meantime, Montpelier faces the near-term challenge of keeping adequate public services, and struggling Vermonters, afloat until the health care reform ship comes in.
Read the report.

Mixed News For Working Vermonters
There's been good news and bad news this year for working Vermonters. The good news is that the state has seen significant job gains; encouraged, more people are looking for work. The bad news is that the gains appear to be mostly in the service sector, where low-paying, part-time work is common. For most Vermonters, their 2009 income was the same as their 1989 income, but their costs are much higher. Read more in Public Assets' recent Monthly Jobs Brief.

No Tax Reform This Year
The Blue Ribbon Tax Structure Commission delivered its report to the Legislature in January. But hope that its recommendations might lead to much-needed action this year quickly fizzled. The governor opposes expanding the sales tax to services, a growing part of Vermont's economy, and is unenthusiastic about eliminating some income tax deductions—even though both policies would lower tax rates. And with a pile of tough issues already on its plate—Vermont Yankee, health care reform, and a $176 million budget deficit, to name three—the Legislature doesn't seem hungry for another. To understand these responses to the report, Vtdigger.com's five-part series is a must-read.

A Third Way to Tackle the Federal Deficit
From most of the recent news coverage, you'd think there were only two choices for reducing federal budget deficits, neither very palatable. First we got the Republican "roadmap," which essentially doubled down on the policies of the last 30 years that have created the mess we're in now. Then President Obama delivered his plan, ostensibly less draconian than the Republican's, but sketchy on the specifics. For those who think it's time to start reversing the policies we've been following since the 1980s, the Congressional Progressive Caucus has drafted "The People's Budget". For starters, it doesn't propose slashing Medicaid and Medicare and privatizing Social Security. And it doesn't rest on the myth that lower taxes on the wealthy create prosperity for all.

Public Assets Institute is funded by grants and donations. Please consider making a tax-deductible contribution to support our work.

contact | privacy policy | unsubscribe | forward to a friend
Public Assets Institute, PO Box 942, Montpelier, Vermont 05601.