Elections and Budgets: Time to Leave Disneyworld
Commentary by Joe Blanchette,
October 21, 2010, page 2.....

Summer vacations are over and we are starting to face the realities of the approaching winter. It’s a good metaphor for what we ought to be doing as we head to the polls and build town budgets. While there are always those who use personal anecdotes to gloss over larger realities, this is no time to do so. Let’s confront the stark demographic and fiscal challenges that lie ahead, and perhaps we’ll have the discipline to make life better for ourselves and our children.

1. Vermont’s population is the second oldest in the nation. Census data indicate this trend will continue in the decades ahead. Additionally, emigration exceeds immigration as residents leave in search of lower taxes and more robust economic opportunity. In the years ahead, many more Vermonters will retire and cease to enjoy the income levels that have supported current spending levels. They will make smaller deposits to state and federal coffers while making larger withdrawals.
2. Vermont is fast approaching the point where a majority of the state’s 300,000+ tax filers pay no income tax. Politicians love to “cut” or reduce taxes for potential voters, both rich and poor, while growing programs. Charlotte has its own special deals. Wealthier Vermonters leave the state and/or retain consultants to protect their wealth, leaving a shrinking number of middle-class filers bearing a larger tax burden for ever-expanding government programs.
3. Traditional income measures consistently place Vermont at the mid-range among state rankings. Yet, Vermont’s combined tax burden (local, state and federal) ranks 4th nationally. Thanks to our dysfunctional school financing system, the impact of voracious education spending is masked locally by statewide taxes and rebate programs. The result? Over the past dozen years Vermont’s instructional staff has grown almost 21% while student enrollment dropped by 14%. Vermont now ranks 4th in education spending, almost 40% higher than the national average.
4. Without private-sector jobs, government jobs won’t exist. Government doesn’t create jobs, but it too often inhibits the risk takers who do. For too long, Vermont tax and regulatory policies have hindered job growth. The number of private sector jobs has been declining while the public-sector expands. This is unsustainable. Those who assess Vermont’s business climate give us failing grades. A few rankings:
Forbes Magazine: 47th
Small Business and Entrepreneurship Council:
47th.
The Tax Foundation: 41st
ALEC-Laffer State Economic Competitiveness:
49th
5. We’ve seen how disruptive it has been for Vermont policymakers to cope with the FY11 $155 million budget deficit. We’re not finished! Vermont is projected to average $100 million deficits for at least three more years. Just imagine the problem Vermonters will face when we finally confront the estimated $2.7 billion dollars (that’s $2,700 million) of unfunded liabilities for pensions and health benefits promised to state workers and teachers. Realists will admit that the money won’t be there to pay for these promises if the status quo remains. Yet few want to confront these problems. We keep kicking the can down the road.

Charlotte doesn’t live in a vacuum. Federal spending, debt, deficits and unfunded liabilities are so large that few comprehend their size or future effect. Social Security, Medicaid and Medicare are on the brink of insolvency. The full impact of ObamaCare and upcoming tax increases have yet to be felt. After three years of massive bailouts to favored unions, banks and businesses, too many Americans still struggle with less income, unemployment hovering around 10% and underemployment around 18%. Vermont’s spending, deficits, tax and regulatory policies only compound the problem. Meanwhile, some in Charlotte proceed as if nothing is wrong. They want it all as long as they can force others to pay for pet projects: trails that benefit the few, a tunnel under Route 7 or a host of smaller expenditures that collectively strain budgets and taxpayers.
We’ve been living in Disneyworld for too long, enjoying the rides and living large while using the charge card and ignoring the bills. Our vacation is over! Government at all levels has grown too large, promised too much, and has failed to respond to all the warning signals. Today’s politicians know that they won’t be around to face voter wrath ten or 20 years from now, and most are too wealthy and well-connected to feel the pain of the typical Vermonter. Rather than voting party, person or program, let’s support principles, like spending within our means, limiting the role of government and protecting individual freedom. If we really care about our youth, we won’t quibble over classes with a few more students. Rather, we will fight to reduce the crushing financial burden that lies in wait for our children because of our selfish, short-sighted desire to stay in Disneyworld.

Joe Blanchette