McClaughry: Recovery and moving forward

By John McClaughry

On Nov. 3, 1927, Vermont took a hell of a shellacking. October had been extremely rainy. Then in two days nearly a foot of torrential rain fell on most of Vermont. The soggy mountain forests couldn’t hold it. Down it came in gushing brooks and wild brown rivers, sweeping away nearly 200 years of settlement and improvement.

The flood waters made 9,000 people homeless, damaged or destroyed 1,258 bridges, washed out 250 miles of the Central Vermont Railroad, and claimed the lives of 84 people.

“The low-lying farms suffered the greatest disaster. Where topsoil was not carried away, layers of gravel and sand three feet deep had buried it, and when the flood subsided, fields and pastures were strewn with half-buried cattle and other livestock. … In a few hours of violence Vermont had suffered a property loss of some thirty million dollars in farm, industry, highways, private and public buildings,” according to historian W. Storrs Lee. That’s the equivalent of $445 million today.

John McClaughry

John McClaughry is vice president of the Ethan Allen Institute.

Bear in mind, in 1927 there was no health or unemployment insurance, no small business loans, no farm disaster payments, no Social Security or welfare checks, and no federal recovery programs. The only federal money Vermont got from Washington was $2.5 million for rebuilding major roads and bridges. The Red Cross played a noteworthy role in disaster relief, but “most of the mopping up was done by Vermonters themselves,” Lee wrote.

Now move forward 93 years. Vermont’s population has grown by 74%, to 623,000. Our state is tied together, to New England and the world beyond, by a network of major highways, railroads, air freight and internet. The village-based agricultural economy of 1927 has become an economy strongly dependent on trade.

Now we have been shellacked by another natural disaster, COVID-19. But where in 1927 the unflooded parts of Vermont kept the economy running and brought relief to the people of the flood damaged areas, this time the whole country has taken the shellacking. Even if our death toll — 35 as of April 16 — remains below the 1927 level of 84, the shutting down of the economy for fear of virus transmission has produced still-uncalculated millions of dollars in lost incomes, closed schools and colleges, and tottering businesses.

Not the least of the catastrophic effects is the disappearance of hundreds of millions of dollars in tax revenues over the next two or three years. The Federal CARES Act and its successors will help individuals and businesses stay alive in a way inconceivable in 1927, but Washington will not supply much or any of the lost millions in tax revenues needed to sustain state and municipal governments.

Just one example: The consumption taxes that provide a third of the Education Fund revenues are expected to shrink by $89 million by the end of the 2020 fiscal year two months from now. After spending all of its reserves, the Education Fund will likely come up $40 million short by that date. Voters have already approved school year 2020-21 elementary and secondary school budgets $73 million larger than this year’s, even as the school population continues to decline.

Our school finance law makes residential school property taxes the last resource to cover shortfalls. Absent dramatic changes in spending and/or taxes, that fact points to shocking increases in school property tax rates — at a time when many thousands of Vermonters won’t have enough income or savings to pay their property tax bills.

If there is any silver lining to this dark fiscal cloud, it is that it should cause wise policy leaders to reason thus: “We’re already spending $17,873 per K-12 pupil, fifth among the states, 51% above the 50-state average. We can’t possibly increase local education spending when the taxes to finance it are tanking, along with income and other taxes. We must reexamine what Vermonters are getting for their billion and a half dollars of education spending.

“This will require knowledge, imagination, and especially courage. Our high-spending K-12 education system got that way by 50 years of decisions heavily influenced by special interest (“stakeholder”) pleading. The economic shock of the pandemic forces us to do things differently. We can maintain today’s educational quality, and probably improve it, but it will have to be done over the fervent resistance of those interests.”

That will require not just wise policy, but a strengthened civil society in our towns and cities where, as after the 1927 flood, citizens come together to improve the education of our children, the wellness of families, the care of old people, the economic strength of our small businesses and every other aspect of mutual aid and flourishing community life.

John McClaughry is vice president of the Ethan Allen Institute.

Images courtesy of Public domain and John McClaughry

22 thoughts on “McClaughry: Recovery and moving forward

  1. Recovery depends on our ability to take control of our own destiny by resisting and rejecting the so called experts who have created this circumstance. The solutions are obvious at this point, continue to let the new world order plunder and pillage our state by controlling the narrative, or say no to them and insist that sovereignty of Vermonter’s is our paramount priority!

    We can only move forward when we control our own destiny!

    If we cannot make this commitment to ourselves and state it boldly so their is no question where we stand, then we are doomed!

  2. As I see it and has been a proven fact over the past eons. Bad times bring out the best or the worse in people. Directing to the VT Government people, this has brought out the worse. For instance, the Governor among the worse, governs by knee jerk reactions.

    1) Gun Control. Stated repeatedly he was against gun control. Then some jerk (one jerk) pulls a funny in Fair Haven and was caught. Immediate response from Scott, sign all gun control bills on his desk. Making the citizenry conform to mostly egoistical controlling Flatlanders in Montpelier over riding years of VT freedom history. Boy did Scott cave. Did outside forces (people, groups) get to him, Agenda 21 & NWO?

    2) This CV 19 Is another example. Almost immediately he shuts down the state. Little or no movement allowed. There was NO studying the situation and taking reasonable measures, but NO, just shut it all down and now there’s a state crisis. There wasn’t any evaluation as to what happens if this or that was done to really protect the people. Total lack of leadership. Certainly not a general in time of war. Did outside forces (people, groups) get to him, Agenda 21 & NWO?

    3) The Attorney General. Using Nazi tactics to control the citizenry via the State Police and their snitching policy against neighbors, reminiscence of Communist country leaders, Hitler, Mao, Stalin. He’s just a damn lawyer in a state position that is controlling without any Legislative or Governor authority or direction. The State Police should have a conscience and respect the documents and ignore such instructions as have police / sheriffs in other states. This will only result in disdain for the striped pant people. Did outside forces (people, groups) get to Donovan, Agenda 21 & NWO?

    4) NO governmental people has gotten their heads together and apply any plan to help the people and state on a fiar and balanced program. Instead it’s all about dictatorial control and without Constitutional guidance or oath that was sworn to. Communism seems to be the way to solve problems in their minds——-really? There will be revolts as you cannot destroy the free human spirit as they hope to do. This is being proven in many states now, people have had enough stupid control. Did outside forces (people, groups) get to them, Agenda 21 & NWO?

    5) As a result, it has spurned resentment, hatred of the elected (supposedly to lead) people, financial ruin of both the State and people, control of freedom-movement-and life. This should not be, not in America, the bastion of freedom, liberty and property. And it all happened in about 30 days. Did outside forces (people, groups) get to them, Agenda 21 & NWO?

    6) As commentators have stated, VT may not recover from the stupid illegal decisions of the elected. Did outside forces (people, groups) get to them, Agenda 21 & NWO?

    7) These forces and people’s wealth (Bill Gates et al) have certainly found a way to shut America down and control kids minds to generate a different American future. Gates tried it also with Common Core a failure. Now he’s into global vaccinations of the world, a Hitler in sheep’s clothing. He plans on making mega $$$$ on each vaccine administered. Money in mentally deranged people’s hands kill more people than any gun. Of the two, see what’s allowed and not allowed.. Did outside forces (people, groups) get to them, Agenda 21 & NWO?

    Refer to the TNR article, a good one:
    Kill the Ratline

    • Agenda 21 & NWO?

      There are those who cannot see, and also those who WILL NOT see.
      Perhaps the CCP have unwittingly done us a service by allowing Wuhanese to travel world wide while denying them travel within China.
      Perhaps now there will be enough eyes opened to the manipulation that the world will awaken.

      I try to remain optimistic.

      • Hi Cranky
        Personally I’m a positive person and in these times generated by negativism I try to ascertain what’s happening on a logarithmic scale that has suddenly developed to control the populace. How does one react? I believe the protests now happening are a positive by positive people with survival and a way of life in mind as has been.

        How to eliminate the outside forces of control and a media that has run amuck and get on with life? It’s been a fast development into a new world mainly contrived by only a few for some agenda. In a short time life’s pyramid has been inverted, the base doesn’t control, the tip does.

        I like to go hunting with a gun and fishing with a good light fly rod, as the saying goes “the tug is the drug”. Both might become extinct in VT.

        • We’ll just have to wait and see whether positive results stem from tomorrow’s events in Montypeculiar, including the extent of press/media coverage.

          The pressures that are pushing the people off the land are relentless, and the people are tiring.

          Meantime, watch out ya don’t snag your back cast. :o)

  3. Only one positive solution remains. Make Vermont the most advantageous state to start a business or to move a business to. Businesses create jobs which create paychecks and the taxes that follow.

    The legislature needs to enact laws to release the spirit and full power of capitalism and the resultant wealth building it brings immediately, now before any other state does. It could happen relatively quickly if the will exists. Offer the business world deals it would be foolish to refuse.

    But if there is no will to do this in the Vermont legislature there will be no way out of this predicament called self-inflicted economic depression due to bone-headed policy and illogical mass induced fear. One thing is for certain; The status quo will change one way or the other.

  4. Well said John. I fear the total cost to Vermont and Vermonters due to the state shutdown will reverberate for years and cost an almost uncountable financial toll. Vermont was already balancing on the edge, and has been for the last 20 years due to a lack of a business/industry base, before the COVID-10 panic. I fear the writing is o the wall and it will be a toss of the coin as to whether it will be bankruptcy for the state or triple taxation for residents. God help us all.

    • John….Federal law says that States cannot declare bankruptcy. Only Cities can. So Vermont is toast. Cities can declare bankruptcy and then a bankrupcy court is able to VOID Union contracts, and all other creditors as well.. Vermont is soon totallly broke….I give about two years. I was guessung five years beefore covid hit. Now two years or less. Since VT cannot decalre bankruptcy…there are few choices. VT can ask fo a bailout from Trump (if he wns again). FAt chance of that. But even if a Dem wins 2020, NO WAY can they bail out VT…because CT, IL, NY, CA etc… are all in FAR worse shape in terms of magnitude of unfunded pension debt. You can;’t bail out VT without all other states demanding similar. So if no bailout? Taxes on the rich will have to be trippled, which will just make them leave even faster!. Vermont will also talk about a WEALTH TAX… that will be full boat Communism. That will force people to leave even faster! They talked of a wealth tax to fund ShumlinCare!!! There is no solution that will work. So protect yourselves, get out as fast as you can. In two years you will never be able to sell ANy higher end home. there are no buyers! The new property tax rates will be MASSIVE, and VT will still subsidiz the other 70%! Plan ahead. get out now. 40 years of my life were there. It was nice while it lasted. kumbaya 🙂

      • Blood out of a stone much? If we are looking at a situation where the state has no money and ppl also are flata*s broke, there are not enough businesses to extract revenue from – what then? This is the scenario VT is facing.

        We can cut 3/4 of VT State Employee jobs to the level NH employs – and make all 30 hours and four day work week. End 100% Cadillac health care plans…basic plan works for everyone else? Employees can add the higher end perks as needed.

        Greatly reduce pensions or better yet get rid of them entirely – do what could or would be done under bankruptcy protection for future obligations. And if VSEU claim they can do better in private sector then go do it – most of them couldn’t bc in private sector generally have to work.

        There is also such a thing a contract realignment this should be researched imho.

  5. Forget it. Vermont is toast. The stocks in the pnion fund got smacked down. The unemployment insurance fund is soon all spent. The education fund is insolvent. VT still has outstanding debt….SOON DOWNGRADED! We have a $4.5 BILLION unfunded Union retirement liability. Our roads and bridges are in terrible shape. Our population is decling. Many baby boomers will leave as they more to protect their assets…leave….either 100% as I did, or they leave six months and a day to be resident in LOW tax states.. Small business, the engine of the State…will not recover to pre covid times…thus less jobs and less revenue. IMO, many small business that were on the egde will just call it a day. ESPECIALLY if Amazon sells what you do! Vermont is not coming back until a fiscally INTELLIGENT legislature comes. THAT WILL NOT HAPPEN! Kumbaya. My advice? get out as soon as you can. Take any bid you can posibly get for your house. if you are not ready to leave, SEll it and then rent till you are!. Within two years VT will be asking for a bailout.

  6. Maybe, just maybe, Vermonters will see some serious questions in the way educational dollars/student continue to sky rocket. The folks in Montpelier must rise up and say “ENOUGH!” As the student population continues to decline, we can’t justify continued funding increases. It’s about time to tell the NEA, “GO FLY A KITE, NO MASS!!!!!”

    • What? No “stay at home or die; that’s more important that government wasting money”?

  7. The first thing that should be done is divorce ourselves form the global lobby!

    They will try to muscle their way to the head of the line, pushing real Vermonters needs aside!

    Help Vermonters, not non-profits!

    The Sovereignty of our people and State are the priority, we don’t need EV’s, as much as we need stronger farms and agriculture, and maybe more scaled back local schools with less administration.

    From what I’ve seen a good place to start would be to elect John Klar governor this November.
    His ideas are even more important now and we certainly need a change in direction if we are to pull out of this one!

    It’s a whole different game now, its time to get real!!

    • The 2,000,000,000,000 ($2 trillion) increase in national debt to cover these Gov’t gifts to the victims of ‘shut everything down for months”, plus the massive increase in State Debt.will never be repaid, Just like Obama doubling the national debt in 8 years, also will never be repaid.
      But our kids, grands and great grandchildren will be paying interest on this debt, either in cash, or by inflation of the money they ‘MIGHT” HAVE ACCUMULATED, or in the prices they pay for inflated prices.
      A perfect mess to try to take down the USA – perhaps by sinister forces outside our Countries control.

      • What better way to control a populace than to control its money.

        Part of the definition of money is that it has value and is storage of wealth. With the current global move toward digital currencies, cash money will be eliminated and the values of currencies manipulated more easily. Wealth storage will become subject to the whim of those who will determine the value of those currencies. We see this today with every new cash infusion (easement) by the FRB which dilutes the value of existing currency (which further emphasizes the necessity of having savings in hard assets — precious metals, real estate and even durable goods). We don’t need to look any further than the daily price increases at the markets/stores.

        As the spectre of insolvency of the USA looms ever closer, so does the spectre of war should default on the national debt arise as a real option. This cloud hangs over more than one nation.
        It’s hard to be optimistic in times like these.

    • Vermont is the nonprofit capital of the country or close to it. You start a nonprofit so there are no taxes to pay. They build a little dynasty. pay their board members a nice fat wage and if it’s a charity .25 cents on the dollar gets to the needy. Nice scam because they can be funded by like minded organizations outside of Vermont to push an agenda (gun control, climate change).

  8. They will eliminate the Property Tax rebate. That will cause a lot of budgets to be voted down. then they will sit on their hands on Mountstupid and wonder what to do next.

  9. With Vermont’s already atrocious tax burden and its anti-business atmosphere and
    the Governor pulling the plug on ” All ” business due to the Wuhan Virus, well it’s
    just another nail the working Vermonter’s coffin………….. what a shame !!

    Wake up, people……………. They don’t care.

  10. Re: Our school finance law makes residential school property taxes the last resource to cover shortfalls. Absent dramatic changes in spending and/or taxes, that fact points to shocking increases in school property tax rates — at a time when many thousands of Vermonters won’t have enough income or savings to pay their property tax bills.

    There is a caveat…. A pro rata Vermont Property Tax Credit takes effect if household income is less than $136,500. What worries me is that the Vermont legislature may amend 32 V.S.A. § 6061 to appease greedy special interest groups, while parents (property taxpayers all) step up to the plate during the Stay Home, Stay Safe order to homeschool their children.

  11. Yes—John spells out the challenge very clearly (as usual). Hard, though, to imagine the state government rising to meet it. But I pray they do.

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