Commentary: Time is Running Out (John Pelletier)

This commentary is by John Pelletier, Director of the Center for Financial Literacy at Champlain College.

On July 10, Fitch, a major credit agency, reduced Vermont’s bond rating. This was expected, after Moody’s, another large credit agency reduced Vermont’s bond rating in October. Both rating agencies have the same concerns about Vermont and its economy. As a result, future state and municipal borrowings costs will increase.

Why is this happening? Because Vermont faces daunting “economic and demographic headwinds.” We have heard these concerns for years. Vermont’s population and its workforce is flat or declining, our economic growth is slow and our citizens are old. And our state’s unfunded pension and health care liability for current and future teacher and state employee retirees is large and growing.

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VT Bond Rating Downgraded...Again

Another rating downgrade. The previous downgrade by Moody's was estimated to cost Vermonters an additional $7 million per year. How much will this one cost us?
This should serve as a large red flag that, while not a crisis-level change (we still have the second-highest rating available), we must focus on our long-term financial viability and overcoming our demographic challenges. We need people. People come here for job security and affordability balanced with quality of life. We have the last one down. Without the first two, however, access to that high quality of life starts to become a limited luxury.
"The report underscores, once again, the State’s demographic challenges as a deciding factor. The AA+ rating ‘is sensitive to changes in the State’s fundamental economic growth trajectory,’ according to the report. It also notes: ‘Material and sustained improvement in the State’s demographic profile, such as through consistent population and labor force gains, could support revenue growth prospects and a more robust revenue framework assessment.’"

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Fiscal Responsibility: A Universal Concept

One day you jump into your car and turn the key. After ten seconds of chugging over, the engine finally catches and with big puff of blue-black smoke and a din that sounds like an asthmatic lion, off you go. 15 minutes later, as you sit on the side of the interstate listening to the tick-tock of your emergency flashers and waiting for AAA, it becomes undeniably clear: it’s time for a new car.

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Transparency Concerns With Corporate Incentives

“Over the last 20 years, the state of Vermont has authorized more than $10 million in payments to Keurig Green Mountain, Inc.”

So starts a new VPR investigative piece looking into how state funds have been allocated to the large company, specifically those given through the Vermont Employment Growth Incentive program (VEGI), and their return on investment.

However, there is no report. No numbers exist to show how much of Vermont tax payer’s money has been given to the coffee giant. No reports have been filed showing how those funds have been used. No data can be shown to prove their efficacy.

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Education Update from VISA

Key bills remain unresolved, and AOE announces new State Director of Special Education.

Thanks to our friends at VISA for this updated information. 

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Vermont is in Trouble

Vermont loves to tout its many media accolades, frequently showing up on top-ten lists praising us for our health, happiness, and sustainability. Pull aside the curtains, however, and anyone who is honest with themselves can only come to one conclusion: Vermont is in trouble.

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How We Got Here - a Timeline of Act 46 and Forced Mergers

The Legislature has been considering how to handle the State Board of Education’s forced merger plan since they convened the second week in November. Many towns feel they were treated unfairly, having submitted alternative governance proposals in line with the Act 46 process. They felt so strongly, in fact, that more than 35 towns have joined multiple lawsuits challenging the law and, perhaps more importantly, the manner in which the State Board of Education has implemented it.

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