Public Assets Institute > Policy Areas > Education > Spend wisely, tax fairly

Spend wisely, tax fairly

The governor made a compelling case in his Inaugural Address last week that Vermont needs to strengthen its education system—starting with early education and continuing right through college—in order to strengthen the economy and build a better future for all Vermonters. We’re all better off when all our children are well educated and have the skills they need to get along in the world and become productive members of society. That will help to strengthen the economy, and a stronger economy helps everyone in the state.

In that vein, he argued that Vermont was failing children of poor families, and he proposed to increase access to child care for these families to help insure that the children get a good start in life.

It was a visionary message, and it’s wise strategy for Vermont.

But then the governor lost his footing and fell back into the tired, old, manage-to-the-money mindset: We have a fixed amount of money we can spend on behalf of low-wage working Vermonters, and we think it would be better to expand child care for them than to keep their taxes down. So, he proposed to pay for the expansion of child care by raising taxes on poor, working families.

The governor made a great case for why his initiative to provide more and better child care would benefit the entire state, but instead of asking the entire state to pay for it, he proposed that working families with the lowest incomes in the state foot the bill.

Last year, the Legislature changed its approach to budgeting with adoption of People’s Budget principles. The goal, it said, should be to address Vermonters needs and improve their well-being, not simply manage to the money and match expenditures to whatever revenue happened to be available.

How the Legislature chooses to fund expanded child care has implications for other budget and tax decisions the state needs to make soon—such as highway maintenance and health care reform. We need to move away from the practice of looking in the till and divvying up the money in ways that won’t hurt the politically powerful. There is no vision in that approach. Instead, we should be developing a spending plan each year that helps to create a state that works for everybody, and then figure out the fairest way to pay for it.


Posted by Jack Hoffman on January 17, 2013 at 9:00 am

4 Responses to “Spend wisely, tax fairly”

  1. In the Governor’s justification for tranferring funding from the EITC to the CCFAP, I’ve heard him say that some EITC recipients will be losers and some will be winners. In looking at both the EITC and CCFAP together, it appears to me that some of the families whom the Governor is trying to help may actually be among the losers.

    Specifically, a family’s eligibility for the CCFAP and the funding they receive for their child’s tuition depends upon a number of factors. Depending upon how this change is implemented, they may lose more in the EITC than they will gain from the CCFAP.

  2. David Kraus says:

    Why not mention in your essays here about raising taxes on the wealthy in Vermont, who have been increasing in alarming numbers exponentially for more than a decade. How about taxing second homes higher. If someone can afford two, three, and even more homes, they can pay higher taxes. How about higher taxing American International Group, the epicenter of the credit default swap scheme who we bailed out in 2008 so the wealthy would not lose their investments, and who is the corporate owner of Stowe Mountain Resort (which 99.9% of Vermonters are oblivious to. And by the way…where are all of those 501 activist groups? I haven’t seen a protest or even a outcry in years.) Regardless of party as in national government, the wealthy run Vermont and in no way will their taxes be raised. Schumlin is seeing to that because they made him governor as Goldman-Sachs and others made Obama president. Vermonters live under a bubble of what they think Vermont is about, an image they don’t or won’t let go of. The days of Goddard, Bread & Puppet, the staunch stance of independent thinking and doing regardless of what the rest of the country did, the self righteous and arrogant idea that somehow Vermont was the moral and ethical thermometer for the country…these days are gone, and have been for quite some time. Until the general population lets go of this childish image of our state and take the time to have courage, do serious research, and learn what is really happening, not much will happen. It is sad, but true. I am not surprised at Schumlin’s move to raise taxes on working families and the poor. It was predictable even before he was elected. Our “elected” representatives here in Vermont do not represent “the people” but rather those who paid to put them in office, just like every other state and our federal government. It is time for Vermont adult citizens to give up their pubescent dream of what they think Vermont is and burst the bubble they live under, stop whimping out and instead put on the gloves. Unfortunately, I don’t see this anytime soon. Our mainstream media isn’t helping the situation with its lack of any investigative reporting with solid information. They are like Vermont’s version of CNN. I do respect what the Public assets Institute does. Not enough people read this. But I would like to see you begin doing deeper reporting with more background as to what had led to the decisions made. You need to become more aggressive. Stop being so “nice” about everything. We need more than soundbites and a few paragraphs with no background information. The economic and social conditions are dire at this point in ours as well as a hundred other societies. We need leaders and real in-depth information. We need a big “voice” to rally around. Thanks, David Kraus

  3. I understand your point of view, Jack Hoffman, and I share your deep appreciation to our Governor for insisting on the prioritizing of investments in early childhood. I also understand from others more knowledgeable than I that the projected impact on low income Vermonters will be an estimated average of $300 less in rebates from the Earned Income Tax Credit, from $2000 to $1700. The trade-off will be a significant systems change that will ripple out to many, many more Vermonters and guarantee a qualitative improvement targeted in the early care that our youngest receive. With 70% of a young child’s brain development taking place by age 3, it is critical to working parents, future employers, and the economic long-term health of the community at large that these children get the quality nurturing they need. Such targeted systems change is important right now. It’s a real judgement call as to whether or not Vermonters could accept tax increases today that would cover this need as well as a number of the other strategies, including health care reforms, that will similarly impact the lives of Vermonters at all levels of the economic scale.

  4. Deb Thayer says:

    I think this plan is a classic example of robbing Paul to pay Peter…….The poorest of the states citizens are going to be helped the least.The EITC was meant to help the lowest incomes and to take the money away from some of the lowest earners to pay subsidy’s for some of the other lowest incomes is silly!