The Vermont legislature returns in January with a long list of daunting challenges, all with potentially astronomical price tags for Vermonters, who are already some of the most highly taxed people in the United States.
Among this list includes a projected 6% increase in property taxes to fund an education system already topping $2 billion to serve a declining population of less than 80,000 students. The system is so dysfunctional that former House Education Committee Chair, Dave Sharpe (D-Bristol) recently claimed legislators were “hoodwinked” by special interests into supporting Act 46, the 2015 school district consolidation law that was supposed to lower costs by increasing efficiency. That has not worked out.
The Green Mountain Care Board recently authorized rate hikes of 12.4% (Blue Cross Blue Shield) and 10.1% (MVP) for people with Vermont Health Connect insurance plans, and approved a 59% increase to $1.42 billion for OneCare, the state’s latest healthcare cost-containment boondoggle. One suspects considerable hoodwinking here as well.
Also of concern is the state’s $4.5 billion in unfunded pension liabilities for teachers and state workers. To put this cost in some perspective, every Vermonter – man, woman, and child — is currently on the hook for over $7000 (a number that is growing quickly) to pay for these benefits, and feeding this beast will consume 14% of the state’s general fund in 2020. (In 2018 that general fund expenditure was nearly $200 million, and this is an annual obligation over the next twenty years.) If this is not addressed, public employees risk losing some or, in an unlikely but not impossible scenario, all of their benefits.
Act 64, the water quality law passed in 2015, is about to hit businesses, municipalities, public schools and even some individual residences full force with stormwater regulations and fines with associated costs and taxes that will run into the hundreds of millions of dollars over the next few years, and billions over the next decade. This has the very real potential of bankrupting many Vermont businesses.
These are costs already on the books. Here’s what we have to look forward to.
Leaders of the majority party seem poised to pass a minimum wage increase, which by last estimate, on top of the increased costs to employers and consumers, will require an estimated $86 million for Medicaid over five years either in tax increases or program cuts.
And, they seem resolved to pass a mandatory Paid Family Leave program which will come with a new payroll tax taking an estimated $76 million per year out of working Vermonters’ pockets, just to start.
If this weren’t enough, in what one legislator described as what will be “our banner legislation” for 2020, many lawmakers want to entangle Vermonters in the latest carbon tax scheme called the Transportation Climate Initiative or TCI. This multi-state collaborative would amount to a proposed 5, 9 or 17 cent per gallon tax on gasoline and diesel fuel, at a total cost to Vermonters of an estimated $20 to $90 million, a number that will grow annually ad infinitum.
These are just the big ticket items. Who knows what nickel and dime tax and fee increases they have in store, like plastic bag taxes, new and increased professional licensing fees, etc.
In all seriousness, how do our representatives expect us to pay for all of this? There are only about 320,000 taxpayers in Vermont. This ever-growing burden on so few shoulders is crushing. It has to stop. It would be one thing if we were getting our money’s worth out of all this, but the existing programs outlined above, apart from being wastefully expensive, are all examples of gross mismanagement. Can we realistically expect any better from the proposed programs?
A recent news story out of Rockingham, Vermont, described a community discussion billed as “Attracting and Retaining Young People” in which one person described as an “older resident in work jeans and boots” summed things up very well. “Our taxes are absolutely nuts,” he said. But, “There’s so much potential.”
There is so much potential in Vermont. This is a wonderful place, but these taxes and regulations are smothering the people who try to live her. As long as our taxes remain “absolutely nuts,” and the money is poured into programs that do not work as intended or promised, that potential sadly cannot and will not be realized.
— Rob Roper is president of the Ethan Allen Institute.