Keelan: Vermont leaders should focus on the one issue that matters

By Don Keelan

The Dec. 18, 2017 Wall Street Journal reported that manufacturers in the U.S have over 400,000 open positions and that there are 9 million men in the 25 to 54 age group that are not working. Here in Vermont, our legislative leaders, special interest groups, and leaders from the administration make announcements of what they believe are the most important issues facing the state. The list ranges from opioid addiction, climate change, the pollution of Lake Champlain, the need for a carbon tax, education funding reform (and spending), legalization of marijuana, and a single-payer health care system.

These are important issues. However, attempting to deal with them shifts the focus from what is the most critical state-wide issue: the shrinking Vermont workforce.

This phenomenon is so subtle and difficult to track and we are now witnessing its ramifications. The most obvious is the constant litany from employers that they have an untold number of jobs that they are unable to fill — in manufacturing, agriculture, retail, tourism  and health care — from entry-level to advanced positions.

Another area that is suffering is the nonprofit and municipal sector. They have unfilled board seats and programs canceled due to a lack of volunteers. And in many towns there is the discussion of transitioning to paid fire and rescue services.

And then, of course, there is the huge decline in state personal income taxes that depends on wage earners. This coupled with many high-income retirees leaving the state for places that have no income taxes or estate taxes only compounds the revenue problem for the state.

The fact that we have a shrinking work force did not happen overnight — there are many parts to it, and if focused on, we can reverse the migration as well as attract out-of-state employees. But first, those who are in charge must be convinced that this issue is the one that needs immediate and constant attention.

We must begin to make living in Vermont affordable for young people. One way of doing this is to provide a period of time — five years — where they are not subject to Vermont income taxes and possibly to local real estate taxes. An additional incentive would be for the state to provide free child care for a limited period of time.

Another incentive would be in the area of housing. The state has approved a $35 million bond program for such housing, but additional incentives could be for the state to create a financing agency that would lend funds for a new employee’s down payment and closing costs. Also, [I recommend a] look into providing a rental subsidy for the first three years of residing in Vermont.

It has been noted that Vermont’s younger generation is leaving the state. However, there is a large percentage of that generation which resides here, but for one reason or another — usually for illegal drug use, petty crimes or lack of needed skills — they are no longer employable.

This segment of the population cannot be ignored. If their behavior can be changed, they could be a big part of the solution. These young adults are not only sidelined from the workplace, they are major consumers of welfare and health care funds, housing, child care and legal expenditures paid by the state.

Vermont is fortunate that so many companies stay here for a host of reasons. What should not be taken for granted is that they will continue to do so.

The state Chamber of Commerce recently reported that 10,000 new employees are needed — I would urge those in government nonprofits and special interest groups to table what they believe are important issues and focus on how we bring to Vermont the resources state employers desperately need — employees willing to work and live here.

Don Keelan writes a bi-weekly column and lives in Arlington, Vermont.

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3 thoughts on “Keelan: Vermont leaders should focus on the one issue that matters

  1. To further hammer down the point of high taxes: The Top 10% of filers pay (Those over ~$122,000/year) account for over 61% of income taxes Vermont Collects. The bottom 30% have an effective negative tax income tax burden.

    Regarding property taxes, of the total revenue from the Education Property Tax (including non-residential tax revenue), 14.3 percent was based on household income and the remaining 85.7 percent was based on the fair market value of property. Ouch! Talk about a total disconnect for voters.

    http://www.leg.state.vt.us/jfo/reports/2017%20VT%20Tax%20Study%20Summary%201-17-2017.pdf

  2. Another issue related to high income files is that in recent years more high income files have left then have come. Since Vermont relies more on these filers then most states and it’s a relative small portion of the state population (Vermont is a poor state relative to it direct neighbors) it tends to be very fluid, the burden that will be put on other tax payers to make up for the windfall will be significant.

    “Vermont’s top-income taxpayers often are not the
    same people from year to year because high income
    is frequently a one-time event. Nevertheless, the total
    number of high-income filers is relatively stable from
    year to year.
    • Roughly the same number of high-income filers
    have come to Vermont as have left over the 10 years
    examined. Yet in recent years, more high-income
    filers have left than have arrived. Every year some
    high-income filers leave Vermont and some move
    to Vermont. The majority were here permanently,
    meaning they filed a Vermont resident return for all
    years in the period. ”

    Page 6
    http://www.leg.state.vt.us/jfo/reports/2017%20VT%20Tax%20Study%20Summary%201-17-2017.pdf

  3. “And then, of course, there is the huge decline in state personal income taxes that depends on wage earners. This coupled with many high-income retirees leaving the state for places that have no income taxes or estate taxes only compounds the revenue problem for the state.”

    The single largest shrinking segment of VT’s population is he 35-54 age group. The group that happens to be in their PRIME earning years. Page two from :

    https://legislature.vermont.gov/assets/Documents/2018/WorkGroups/House%20Education/Agency%20of%20Education/W~Rebecca%20Holcombe~Introduction%20to%20the%20AOE%20Staff%20and%20Priorities~1-6-2017.pdf

    You have two many people voting with other peoples money that removes them from the burden of their decisions. The VTNEA runs the show, and if your not part of it you’re going to get screwed.

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