As legislators in the Statehouse work on the budget and the governor calls for fiscal restraint, Vermont Businesses for Social Responsibility held a policy forum this week to discuss possible revenue strategies.
Vermont Businesses for Social Responsibility Executive Director Roxanne Vought introduced the forum, “Planning for Progress: Exploring Revenue Strategies for Vermont’s State Budget.” She noted that budget policies the legislature is addressing are extraordinarily complex.
“Vermont lawmakers are currently grappling with budgetary constraints and this is in response to the end of that influx of pandemic era federal aid we loved having,” Vought said. “And now we are back to facing some pretty significant pressures related to the state's budget, $8.9 billion currently. We also are facing a number of big-ticket items in the next decade. School construction, climate infrastructure and resiliency measures, water and wastewater infrastructure, and housing are all very big-ticket items. There is a suite of bills that are aiming to address these challenges that Vermont lawmakers are currently considering.”
The panelists were asked a number of questions on potential tax policies and what strategies might work to generate new state revenues.
Public Assets Institute Executive Director Stephanie Yu is a public and private fiscal analyst who outlined key challenges the state faces.
“Three main points,” Yu outlined. ”Income and wealth inequality are increasing and that's bad for everyone. Second point is that our tax system, and this includes state and local taxes, is still regressive at the top end. And then the third is that I think it's pretty clear that, you know, there's a lot of needs that are going unaddressed.”
University of Vermont Professor Emeritus of Economics Art Woolf, who served as state economist for Governor Madeleine Kunin, says state leaders must do more long-term planning.
“I think we need to look a lot more about what we're getting for our tax dollars before we start raising new taxes to fund things that are going to be extremely expensive in the future, like health care, because as we age Medicaid spending is going to go way up because of long term care issues,” Woolf said. ”And I guess I could throw in that it'd be nice if the legislature had some long-term budgeting. Right now they go out two years, which isn't a whole lot.”
Center on Budget and Policy Priorities State Fiscal Policy Division Senior Fellow Michael Mazerov is a corporate tax policy expert. He says Vermont leaders should make adjustments to current tax laws rather than seek new revenue sources.
“There's an old saying among public finance economists that says an old tax is a good tax and I would much rather improve the policy of existing taxes, you know, rather than thinking about raising revenues in other ways,” Mazerov said. “There's a lot that can be done. There’s some crucial changes that can be made in the Vermont corporate income tax. My sense is that there's room for enormous base broadening of the sales tax in in Vermont. You know, my priority would be on fixing the existing taxes before you turn to new revenue sources.”
Vermont Businesses for Social Responsibility is a statewide nonprofit with 700 business members that prioritize their social and environmental impact.
