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Public Assets Institute, PO Box 942, Montpelier, Vermont 05601.


Update December 2008

In this issue:
-- The State of Working Vermont 2008
-- Vermont and Obama Health Care Reform
-- To Face This Recession, Learn from History
-- Federal Money Will Help Close the Budget Gap

The State of Working Vermont 2008

Even before the current recession hit and thousands of Vermonters were thrown out of work, the Vermont economy was showing signs of weakness. Job growth was failing to keep pace with demand: according to the Vermont Department of Labor, there were exactly the same number of jobs in 2007 as in 2006. The private sector lost jobs. If not for increases in state government jobs, Vermont would have recorded a net loss for the year. The percentage of Vermonters in poverty increased in 2007, and only top earners saw any real gains in their hourly wage.

Political leaders and policy makers are now focused on what appears to be a deep, global recession. But programs and policies designed to stimulate the creation of new jobs have not been effective for most of the decade. Policy makers should ensure that new budget-balancing strategies strengthen rather than undermine Vermont's economy when the recession eventually subsides and the recovery begins.

Read our report: The State of Working Vermont 2008.

Vermont and Obama Health Care Reform

For nearly 20 years, Vermont has been a leader in health care reform. It can make more progress on its own, but many changes—especially those that involve integrating Medicare beneficiaries and funds into a new system—will require cooperation with the federal government. Now, that cooperation looks likelier than ever. President-elect Barack Obama has put forth his own reform plan, whose central commitment, like Vermont's, is to provide health coverage for everyone.

Many of Obama's proposals to control costs, upgrade information technology, reduce the number of uninsured people, and improve wellness mesh with Vermont programs including the state's Blueprint for Health, Catamount Health, and Vermont Information Technology Leaders (VITL). Guaranteed eligibility, a cornerstone of the President-elect's insurance market reforms, has been a requirement in Vermont's individual and small group markets for many years.

Our new report compares major features of the Obama plan with Vermont's current system and reform efforts in four major categories: pharmacy, clinical care, insurance reforms, and federal changes.

Read "Health Care Reform: Obama and Vermont Are Moving in the Same Direction."

To Face This Recession, Learn from History

The severity of the current recession has been compared with two other economic calamities of the past 25 years: the recessions of the early 1980s and the early 1990s. Then as now, unemployment soared, people were fearful about spending money, state tax revenues took a nosedive, and elected officials struggled to pay for services needed in a time of crisis.

The size of the budget problems during those earlier downturns was comparable to today's, although we don't know yet how bad this recession will get. But one thing was markedly different then: the willingness of leaders from both major political parties to match budget cuts with new revenues to maintain essential services.

Contrary to current assertions that you can't raise taxes during a recession, Vermont did just that in 1983, 1990, and 1991: top income tax rates were set higher than they are now. A majority of other states also enacted permanent or temporary revenue increases.

Read our report on how Vermont responded to these earlier economic crises: "Recessions Past: What Worked Then Can Work Again."

Federal Money Will
Help Close the Budget Gap

A new federal economic stimulus package is a near certainty in early 2009. President-elect Obama has asked Congress to have a bill on his desk by January 20. The purpose of the package is to put money into the economy quickly and reduce job losses.

As the economy has slowed, so have revenues funding state services. One part of the stimulus strategy is to give money to state governments to help fill their budget gaps. Forty-four states, including Vermont, face shortfalls.

Vermont stands to receive around $100 million a year for two years in increased Medicaid payments and other federal grants. This money will go a long way toward resolving the current budget shortfall and preventing drastic cuts. It can be used along with the state's rainy day funds and budget and revenue adjustments as part of a balanced approach to dealing with the state's fiscal crisis.

Schoolchildren need education today as much as they do in better economic times. Drivers need decent roads now as much as ever. And Vermont will still be here in five years, when the economy rebounds. By taking a balanced approach to this crisis, our elected leaders can preserve needed services and prepare the state for a strong recovery. The federal stimulus package should help them fulfill that responsibility.

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

Fact: With help from Bush's tax cuts, Vermonters with income of $200,000 or more saved
$152 million on their 2006
federal income taxes.
Source: Internal Revenue Service, Statistics of Income, 2000, 2006

Public Structures Spotlight

Immunization Program
Agency of Human Services, Department of Health,
Division of Health Surveillance

The nation's first polio outbreak was in the Rutland area in 1894. Sixty years later a nationwide immunization program was in place. The widespread use of the polio vaccine has all but eradicated the disease in the U.S.; the last known Vermont case was in 1963.

The mission of the Immunization Program is to eliminate or minimize vaccine-preventable disease in Vermont. The program administers federal grants for vaccine purchases, manages distribution to health care providers, and ensures that vaccines are stored, handled, and documented in accordance with federal requirements.

Two federal grants provide funding for childhood vaccines: Vaccines for Children (VFC) and Section 317 Immunization Grants. Each has eligibility guidelines, but the two, plus state funds, allow all Vermont children from birth through age 18 to be immunized at little or no cost.

In 2008 the Immunization Program:
  • distributed 270,727 doses to 238 provider offices throughout the state
  • provided vaccines for an estimated 156,548
    Vermont children
  • protected Vermonters against 17 diseases
  • started Vaccines for Adults, which immunized 11,400 adults against shingles
Employees: 13.6 FTE statewide
Fiscal Year 2008 estimated expenditures: $12,867,791
(87 percent vaccine purchase,
10 percent personal services,
3 percent operating expenses)
Fiscal Year 2008 estimated revenues: $12,867,791
(69 percent federal funds,
31 percent General Fund)
Source: Immunization Program


2009 legislative session
Opens Jan. 7, 2009, 10:00 a.m.

Emergency Board meeting
Jan. 13, 2009, 2:00 p.m.

Governor's budget address
Jan. 22, 2009, 2:00 p.m.
House Chamber, Statehouse

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Public Assets Institute, PO Box 942, Montpelier, Vermont 05601.