Why Your Share of Vermont’s Economic Pie is Shrinking!

Here is a link to Power Alley profile of Senate action regarding the state budget and associated increases in taxes and fees.

http://www.campaignforvermont.org/power_alley_senate_875 

A link to House action on these three items was sent to you previously and can be accessed here.

http://www.campaignforvermont.org/mar_31_48_million 

To give context to these Power Alley profiles, please consider the following:

Federal Bureau of Economic Affairs (BEA) data profiles the Vermont economy as growing, on a nominal basis, at just 2.46 percent per year since 2007 and 2.81 percent since the bottom of the recent recession.

Gross State Product (GSP)

Fiscal 2007

Fiscal 2010

Fiscal 2015

Annual Rate - 2007

Annual Rate - 2010

$24.5 Billion

$25.9 Billion

$29.75 Billion

2.46 %

2.81%

Further, Vermont Tax Department data shows that the adjusted gross income (AGI) of all Vermont returns increasing at an annual rate of just 2.34 percent since 2007. This data also shows that around two-thirds of tax filers report incomes at below $50,000 and that the annual migration of filers from below $50,000 AGI to above $50,000 AGI is only 8/10ths of one percent. 

 

 Calendar 2007

Range

# Returns

AGI

% AGI

Average per return

% Income Tax

Avg. Tax

Below $50,000

206,645

$ 4,134,432,495

24.7%

 $  20,007

13.2%

 $     348

$50,001-$150,000

91,902

$ 7,472,289,294

44.7%

 $  81,307

40.1%

 $  2,372

>$150,000

13,912

$ 5,109,549,371

30.6%

 $ 367,276

46.7%

 $18,234

 

66 %

$ 16,716,271,160

 

 

 

 

 

 

Calendar 2010

Range

# Returns

AGI

% AGI

Average per return

% Income Tax

Avg. Tax

Below $50,000

201,716

$3,944,879,933

25.%

 $19,556

13.5%

 $     330

$50,001-$150,000

92,775

$7,623,018,601

48.%

 $82,166

44.2%

 $  2,337

>$150,000

13,184

$4,080,795,341

26.%

 $309,526

42.3%

 $15,728

 

66%

$15,648,693,875

 

 

 

 

 

 

 Calendar 2014

Range

# Returns

AGI

% AGI

Average per return

% Income Tax

Avg. Tax

Below $50,000

195,084

$ 3,917,105,930

19.9%

 $  20,079

10.3%

 $     343

$50,001-$150,000

101,505

$ 8,579,389,192

43.7%

 $  84,521

37.9%

 $  2,431

>$150,000

18,867

$ 7,157,516,882

36.4%

 $379,366

51.8%

 $17,844

 

62%

$19,654,012,005

Annual Rate =’s 2.34% since 2007

 

 

Clearly, these macro data sets underscore the Vermont reality; that is we live in a state where the economy and incomes are growing in the 2 to 3 percent range and upward mobility is near stagnant. 

Yet, from 2010 through 2016, the state budget (state dollars only) has grown at the rate of 5.22 percent. The fiscal 2017 budget increase currently stands at another 2.99 percent but that’s before the 2017 “budget adjustment” receives legislative action next January. Of note, the 2016 budget adjustment (BAA) added $28.5 million to the bottom line, increasing the growth rate over 2015 from 3.8 percent to 5.1 percent.

State Budget – State Dollars Only

 

Fiscal 2010

Fiscal 2016

w/ BAA

Annual Rate

Fiscal 2017 As Passed

Increase over 2016 As Passed

Increase over 2016 BAA

General Fund

1,087,466,830

1,478,505,557

5.25%

1,549,484,180

5.42%

4.80%

Transportation Fund

208,771,086

269,629,380

4.36%

277,972,370

4.48%

3.09%

TIB Fund

14,700,000

13,512,498

-1.39%

12,269,376

-9.11%

-9.20%

Special Funds

207,630,937

293,269,259

5.92%

290,337,777

-0.62%

-1.00%

Tobacco Fund

43,471,675

34,824,925

-3.63%

32,898,749

-3.22%

-5.53%

SHCRF (includes Catamount)

181,141,524

288,145,373

8.04%

286,005,627

4.41%

-0.74%

Fish and Wildlife

 

16,355,474

9,291,075

-8.99%

9,592,312

3.24%

3.24%

Total

1,759,537,526

2,387,178,067

5.22%

2,458,560,391

4.23%

2.99%

 

      Fiscal 2015 - 2,272,368,450

 

 

 

 

When our legislators and governor take an increasing share of economic and income growth, the private economy is proportionately diminished. Also, with laws such as Act 48, for example, which now centralizes power over health care institutions under the state’s five person Green Mountain Care Board appointed by the governor, the “invisible hands” of the market place of private decision-makers, who have traditionally guided our economy, are further weakened.

Some may like this result, and others may not, but it’s important to understand that this shift in Vermont’s economic decision making toward state house politicians is occurring incrementally more each year.

“But that’s not all”. With our electric bills statutorily used to subsidized energy efficiency and renewable energy investments, our education funds and health care premiums used to subsidize economic development projects such as the remodeling of Church Street Market Place along with other mandates like paid leave, unionized day care requirements and pre-k expansion; well it’s clear to see the reach of state government is expanding across-the-board.

Whether you support this expansion of state government or not, we believe in important that you be aware of its occurrence, especially as you consider candidates for state office during this important election season.

Be Well
Campaign for Vermont

We believe Campaign for Vermont offers substantive insight, information and advocacy on a non-partisan basis relative to Vermont's affordability crisis. We hope you have found value in the above presentation. A contribution of $50 dollars, $100 dollars or more would be greatly appreciated and well used to keep us working hard for you. We do recognize that not all of our supporters can afford this so a donation in any amount is highly valued. Please support Campaign for Vermont with a donation.

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