A new deal for Vermonters
To the Editor:
This January, Vermont lost one of its members of what has been termed the "Greatest Generation." My 95-year-old grandfather, Henry Mills, passed away. He was born in 1919, and he lived through some very hard times. He never graduated high school, because he had to go to work as a Chesapeake Bay waterman to help the family pay the bills. He was drafted into the Army in WWII and served overseas in some terrible battles, seeing boys on both sides die because of Hitler's deranged view of how the future should be. He was a blue collar worker, he had a small engine repair shop and a Purple Heart. He loved President Franklin D Roosevelt. FDR was a real hero to him. For good reason, the man pulled us out of the Great Depression and he defeated Hitler. FDR instituted Relief, Recovery and Reform. That reform held until the Reagan era and the 1990s, when banking laws were suspended. FDR brought this country back by STRENGTHENING THE WORKING CLASS, by SUPPORTING UNIONS and by PUTTING PEOPLE TO WORK THROUGH GOVERNMENT PROGRAMS. He didn't get us out of the Great Depression laying people off and putting them out of work. I say we do what he did. Vermont's budget deficit is nothing compared to what FDR had to overcome. It is time to swing the talk away from the lingo of trickle-down economics and Tea Party no-tax mantras. These are the modern day versions of the Conservative Coalition that opposed FDR and his New Deal. It's time for a New Deal for Vermonters. It's been long overdue, but this year's budget deficit is the catalyst we need to make it happen. The Clean Water Fund is an example of the direction we need to take. This concept can apply across all state services. Raise the revenue needed to provide necessary services and achieve important goals for the state.
Vermont state statute says that "The state budget should be designed to address the needs of the people of Vermont in a way that advances human dignity and equity." It's time for Vermont state government to assume a greater responsibility for the state's well being, not by cutting government services but by growing them like FDR did. FDR's New Deal involved social programs to aid the unemployed and elderly. It didn't create more unemployed. It didn't reduce the government workforce serving the elderly.
I heard the testimony to the Senate Appropriations Committee last week. It was really discouraging. Each person testifying was testifying on behalf of our most vulnerable Vermonters and how the budget cuts were targeting them. Really? We are going to the disabled, the blind, the battered, and the elderly to balance our budget? These are the Vermonters we think can solve our budget crisis?
FDR said "It is a fundamental individual right of a worker to associate himself with other workers and to bargain collectively with his employer." Ten months ago, my employer, the Shumlin administration, agreed to a contract, a contract made in good faith with its worker, myself. Now my employer wants out of the contract. The better way is to stand by the agreement made and raise the revenue from those who can most afford it. Or, as FDR put it, quote, "Taxes shall be levied according to ability to pay. That is the only American principle."
According to the Public Assets Institute, a new analysis by Vermont's Joint Fiscal Office (JFO) shows that state spending has gone down as a percentage of the Vermont economy over the last 10 years. Vermont's gross state product is growing again and Vermont ties with Massachusetts for having the fastest growing economy in New England since 2009. Meanwhile, Vermont's revenues aren't keeping pace with Vermont's economic growth. There is a growing need for services in Vermont and cutting services to match revenue doesn't make sense, growing revenue does.
But where do we look for new revenue? The 2011 final report from the Blue Ribbon Tax Structure Commission to the legislature has the answer. It recommends using adjusted gross income and not federal taxable income as the base for the state income tax. According to the Blue Ribbon report, twenty-seven states including all the New England states and New York define income in this way. Public Assets Institute estimates this will raise an additional $80 million in revenue. That means Vermont can design its state budget "to address the needs of the people of Vermont in a way that advances human dignity and equity." That's not just a one time fix, it's one that will give year after year.
The change in the definition of income, will affect wealthier Vermonter's more, since they've got the deductions that get subtracted when income is defined as the federal taxable income. However, those deductions go away when income is defined as adjusted gross income.
Some worry this will drive wealthy Vermonters from Vermont. The fifth of six findings made by the Blue Ribbon Tax Structure Commission found that "there is insufficient data to claim Vermonters are migrating due to high taxes - current statistics demonstrate an in-migration of income. Available data suggests that those entering Vermont earn more than those leaving."
The Blue Ribbon report went on to say "The choice to define income as adjusted gross income by the majority of states ... means that these states create much larger personal income tax base. Accordingly, a basic comparison of personal income tax rates may be misleading as a smaller tax base artificially drives up tax rates." So, when you hear, Vermont has the 5th most progressive tax system of all the states, keep this in mind. Besides, who wants to be 5th at anything? Currently New Jersey and North Dakota beat us in this comparison. I think all Vermonters agree we want to beat those two states at anything we can!
Apparently, the Chinese symbol for crisis is the same as the one for opportunity. We have a crisis and I believe it is truly a REAL opportunity. Let's use the wisdom of FDR and not get sidetracked by adopting the talking points of the modern day Conservative Coalition. In memory of my grandfather, his hero said it best, "The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough for those who have little."