Archive for February, 2009

Time to Think and Act Anew

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Thursday, February 26th, 2009

The Wall Street Journal’s Review and Outlook article was entitled, “The Decline of California”, but the table included Vermont as having the third highest income tax rate (9.5%, behind California at 10.5% and Rhode Island at 9.9%, and just above Oregon at 9.0%). This is the quote that caught my attention: “The tragedy … is that the political class still won’t address the root cause of its financial problems, which is that the state is becoming less economically competitive.” The article suggests that Californians will not solve their woes unless they reduce their tax burden and adopt more radical spending controls. (http://online.wsj.com/article/SB123491737158404543.html)

 

Everything is relative, but Vermont’s challenges are similar. Our public generosity has become unsustainable, our tax base is small and capacity is limited, and we now find ourselves on the horns of a dilemma. How do we make it through this recession while inflicting the least harm on the neediest, and how do we invest now in the near term so that we are positioned for a fast start when it’s over? There are certainly proposals floating throughout the halls of the State House that merit thoughtful examination. But in this era of profound pressures and demands on state government, do we have the will to think and act radically rather than incrementally?

 

In addition to rethinking the structural organization of state government, is there capacity and political will to think anew about how we fund state government? Some would suggest it’s time for temporary tax increases, or whatever euphemism is used to describe the same thing. But, does the current tax structure reflect the old economy or the new economy? Are we taxing the right things? Are the rates at the right levels? Would such an effort accomplish the intended goal?

 

There is spirited chatter on these questions from all sides. Perhaps it is time after all, as some suggest, for objectively examining the state’s tax structure and all its myriad fees so that we are encouraging those things we desire more of – like the creation of new wealth that can support the state’s reprioritized obligations.

 

 

 

 

Vermont Business Roundtable 2009 Position Statement on Electric Energy Policy

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Monday, February 9th, 2009

Approved by the Board on February 9, 2009

Introduction

Due to long-term, fixed-price contracts with both Hydro-Quebec (HQ) and Vermont Yankee (VY) that provide over 60% of our base load power, Vermont has had very little exposure to price variability in the electricity marketplace, and our rates are, relatively speaking, quite competitive within the New England/Northeast region. Looking to the future, however, these supplies will need to be renewed in significant measure, and demand for electricity could increase as economic growth expands and if Vermont consumers move away from their heavy reliance on transportation vehicles and home heating fuels. (more…)