By John Klar
Vermont is suffering a crisis of big government, a bureaucratic tax-and-regulate strangulation that is destroying what is already the smallest economy in the nation. Even before COVID struck, Forbes had predicted that “The state’s economic outlook is … weak with job and income growth expected to badly lag the rest of the country over the next five years.” Post-COVID, the Green Mountains finished near the bottom of the national pack (42nd) in the first quarter of 2020, with a 6.1% drop in GDP.
During the COVID-19 threat, Vermont’s Legislature gave itself a raise while it rammed numerous pre-planned progressive initiatives through a remotely-convened legislative process. The state announced an expected $459 million budget shortfall due to the pandemic, and has yet to revise it’s estimated $4.5 billion pension shortfall to reflect the impacts of COVID. Yet, the Legislature appropriated millions of dollars to subsidize EV cars, and seeks to enact a Global Warming Solutions Act that grants legal standing (and a statutory claim for attorney’s fees) to out-of-state special interest groups to sue the State to compel compliance with arbitrary carbon emission “targets.”
These efforts spray gasoline on Vermont’s fiscal flames. In the years since 2013, Vermont employees have been granted wage and benefit increases that outpace inflation: in only one of those years has Vermont median income risen faster than inflation (median income numbers are not yet available for 2019, but state workers gained 2.6% in salaries and 3.9% in benefits in 2019, exceeding annual inflation of 2.3%). Thus, in all years but one Vermont citizens’ income did not keep pace with inflation: their net worth is steadily deteriorating.
But as COVID shows, just because Vermont taxpayers suffer economic woe does not mean state employees will share in those losses — they are insulated from the economic winds that blow across the real economy. Farmers cannot demand higher prices than their milk will attract — they’ve had to dump milk on the ground. People whose businesses have been shuttered cannot just skip off to other work.
Vermont’s clueless legislators have been scurrying to find federal or other funds to replace that $459 Million in lost revenue — but that tax revenue reflects just a portion of income lost by taxpayers. Instead of tightening belts as Vermonters have, the Legislature has launched new spending schemes before it has either replaced lost revenue or reassessed its gargantuan state pensions obligations (it has been bypassing appropriate funding of pensions for decades).
Going forward, the pain for taxpayers will be very real. While Vermont’s governor has made COVID-19 the dragon he slayed to save the people, he has unleashed an economic gracken that is just beginning to feed. The governor lacks the weaponry to fight that mighty beast — he won’t even peer over his castle walls to see the thing coming! Federal COVID spending will fuel inflation, further eroding elderly and other fixed incomes in Vermont; undermining efforts to start or rebuild businesses. Many of Vermont’s restaurants and businesses will never reopen.
But Vermont’s Legislature never closed it’s business of siphoning wealth off taxpayers with endless pretenses and gimmicks. On the contrary, there has been a steady chorus of progressive calls for higher taxes on the rich, deaf to the fact that those pockets too have been diminished by COVID — that’s why revenues are down. Vermont government is in the business of picking pockets, using the suffering of taxpayers to justify an ever deeper grab.
As the true losses of income caused by COVID are absorbed, taxpayers will see in 2020 more clearly than ever that Vermont’s government is taking care of itself at their expense — then employing the resulting economic hardship to extract more in taxes for yet more social programs. Vermonters could sit around waiting for Robin Hood to arrive and reclaim their hard-earned wealth on their behalf from this bevy of Nottingham Sheriffs. Or, they could vote for fiscal common sense and accountability before this whole government Ponzi scheme collapses around their ears.
Thanks to COVID, this ongoing pilfering is now exposed, as is Vermont’s broader economic vulnerability in the event of national downturn. Vermonters were some of the most independent people in America in 1929, but now are reduced to groveling servitude before legislative lords and out-of-state millionaires.
To be dependent on tourists is humiliating. To be dominated by government is more so. Native Vermonters have become tourists because of government overreach — they are fleeing to freer lands.
John Klar is an attorney and farmer residing in Brookfield, and former pastor of the First Congregational Church of Westfield. He is running for governor in 2020.