Perennial budget gaps mean our policies aren’t working
Paul Cillo testified before the Senate Finance Committee yesterday and suggested two things we need to do to bring Vermont’s tax and budget policies into the 21st Century:
1. Acknowledge that what we’ve been doing isn’t working.
We started the 21st Century with massive federal tax cuts that were supposed to stimulate the economy, create jobs and bring prosperity to all. Here in Vermont, even before the recession, we saw a push for smaller government that we also were told would equal jobs and improve Vermonters’ lives.
What we got—as we show in our latest State of Working Vermont report—is greater income inequality, little job growth, growing poverty, growing homelessness, and a decline in income for working Vermonters who have actually increased their productivity.
Our tax policies aren’t working. Neither are our budget policies.
In some years, there were new revenues, but for at least seven or eight years Vermont has relied more heavily on cuts to balance the budget. But the cuts clearly aren’t working, because every year starts out with a new budget gap forecast.
2. Change course and start investing in people and Vermont’s future.
We need to shift our focus back to people and create a Vermont that works for everybody.
Nobel prize-winning economist Joseph Stiglitz in his book “The Price of Inequality” warns: “Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset—its people—is not being fully used. Many at the bottom, or even in the middle, are not living up to their potential, because the rich, needing few public services and worried that a strong government might redistribute income, use their political influence to cut taxes and curtail government spending. This leads to underinvestment in infrastructure, education and technology, impeding the engines of growth.”
Vermont, alone, isn’t going to solve income inequality, but we can start investing in people and infrastructure with the aim of reducing poverty, improving education, and helping Vermonters build for the future.
