Economy

Economy

Vermont Edition: Vetting Vermont's Revenue Sources

February 14, 2013; Bob Kinzel; VPR

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Budget gaps are putting Governor Shumlin and the Legislature to the test to find new revenue sources. That means everything from the Earned Income Tax Credits to the gas tax to break-open tickets is on the table.

House Ways and Means Committee Chair Janet Ancel and Tim Ashe, Chairman of the Senate Finance Committee, offer their opinions on options that have been suggested.

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Economy: VPP Platform

Progressives believe that a vibrant and sustainable economy is one that recognizes preeminence of the “quality of life” concept and insists on a decent standard of living for all Vermonters. We will work to:

  • Establish and guarantee that the minimum wage must be a livable wage.
  • Advocate for the rights of workers to unionize and require all state contracts to be awarded only to businesses that pay a livable wage.
  • Insist that Vermont contract only with responsible employers that hire local employees.
  • Require that state-funded institutions buy products and services from Vermont farms and businesses wherever feasible.
  • Promote cooperative, worker-owned, and publicly owned enterprises as an alternative to huge profit-driven multinational corporations.
  • Calculate the economic impact resulting from the degradation of Vermont’s natural resources when evaluating the state’s economic development.
  • Change from Gross Domestic Product to another measure such as the Genuine Progress Indicator or Gross National Happiness indicator.
  • Fight to reverse the doctrine of “corporate personhood.”
  • Guarantee employment opportunity at a living wage to all working-age Vermonters.
  • Support the concept of a state bank.

Update from Rep. Weed

We began taking testimony regarding the budget adjustment for emergency housing last week. As the Department of Children and Families works to create better longterm solutions to the problem of increasing homelessness, the need for money for the state's cold weather policy -- to keep individuals and families from freezing -- continues to grow. My committee, General, Housing and Military Affairs, is actively encouraging DCF to look seriously at a host of policy changes in order to create longterm solutions.

On Thursday, we took an off campus field trip to the White River Junction area. We first visited Vermod, a new modular home building company that is in the process of building super efficient homes that fit on a mobile home footprint. Following that, we took a tour of Haven House, an amazing homeless shelter/food shelf; the new PTSD clinical research center; and the Veterans Administration hospital. At each of these facilities we saw firsthand how caseworkers are helping their clients change, grow and improve their lives.

In addition, my Committee began taking testimony around two bills that increase the minimum wage in Vermont to $12.50 per hour. Proponents are concerned that low wage earners must depend upon state services like food stamps and fuel assistance in order to make ends meet. This type of business subsidization drives up the state budget for taxpayers. Proponents also noted that higher wage earners would spend more in the state, thus stimulating our local economies.

Wednesday we are hosting a public hearing around the Earned Sick Time Bill. Four panelists at a Vermont Chamber of Commerce luncheon that I attended week supported the legislation. In addition, at last year's public hearing, the majority of individuals and small businesses testified in favor of the bill, considering it a pro-health, pro-families bill. We will continue to take additional one-on-one testimony on both of these bills, as well as others, through next week. If you would like to testify on this or any other bill being taken up in committee, please call the Sergeant at Arms (802-828-2228) for more information about scheduling. And please continue to contact me with your comments and concerns.

The Politics of Gas Prices

The House Progressive Caucus was split a month ago when we voted on the gas tax increase.  I voted for it because there is a good correlation between the price of gas and reduction in single-car travel.  I also believe we have to maintain our bridges, roads, and what public transit options we have.

A few members of our Caucus voted no because a gas tax is inherently regressive.  It tends to hurt those who can least afford it. This is a hard argument to ignore and so our split vote represents the two sides of the question.

At the same time, I have been pushing the House Transportation Committee to take up H.437, a bill that requires gasoline distributors to report how many gallons they are selling and where it's going.  The bill also requires advance notice of any merger in the fuel industry.  I've nicknamed this bill the "Skip Vallee Special" (after one of the biggest fuel distributors in Vermont).

If you follow US Senator Bernie Sanders at all, you are probably aware that we in Northwestern Vermont often pay much more for our gallon of gas than the rest of the state.  Nobody is quite sure why, though theories abound.  The most reasonable explanation centers on the fact that three gas distributors own the lion’s share of the distribution market and over 60% of the retail outlets around Burlington.  That's likely why Skip Vallee's Maplefields gas station in Middlebury (where independent distributors supply gas to Skip's retail competitors) often sells gas for 10-25 cents less per gallon than his stations in Chittenden County.

But we don't know that for sure, because we have almost no data. My bill won't solve this challenge overnight, but it will help us begin to answer some of the questions about why greater Chittenden is one of the most profitable gas markets in the country.

Interestingly, for the past few weeks local gas prices have been down and comparatively low compared to neighboring counties (unlike we've seen in recent years).  Maybe it's a coincidence, but House leadership has noticed this too, so hopefully they see this simple reporting requirement is worth pursuing (so far they haven't said no).

For anyone confused about why I would support the gas tax while also promoting this bill to keep prices low, remember where the money goes.  To my mind, finding the resources needed to keep our infrastructure in decent shape is very different than Skip and his friends taking money out of the pockets of consumers in order to build nothing more than higher profits for themselves.

The Free Press' coverage of the bill can be found here.

Weekly Update

There are several exciting national and state economic initiatives in progress.

U.S. Rep. Peter Welch announced last week that he introduced two bills targeted to help Vermont’s maple industry, the national leader in maple syrup production with over 1.1 million gallons produced in 2011.

The first bill, a Maple Tapping Access Program, authorizes grants for maple-related research and maple product promotion.  Grants could also be used to open state lands up to tapping or provide incentives to private landowners to do the same.

The second bill would streamline the grant application process for Vermont farmers working to make sugaring operations more energy efficient.  The grants would allow producers to install reverse osmosis systems that remove water from sap before it is boiled down, thus reducing the amount of energy consumed in the production process.

In Vermont, the newly established Working Lands Enterprise Investment initiative received twice as many grant applications as they could fund.  This year they are hoping to fund more job creating projects that boost the economy.  With help from the State of Vermont, the Enterprise invests in farm and forest-related businesses that contribute to the working lands while preserving the landscape and natural resources.

Everyone is encouraged to attend our next Legislative breakfast, April 13th, at the American Legion in Enosburg Falls.  The event is sponsored by the American Legion, the Enosburg Business Association and Franklin Foods.

Please contact me at any time at cweed@leg.state.vt.us

Representative Cindy Weed, Franklin-7, Enosburg and Montgomery

Blowing Up the Bridge Out of Poverty

The most distressing aspect of the Administration’s proposal to limit Reach Up benefits is that it will defeat, rather than advance, our goal of moving people out of poverty.  Passed as part of the national welfare reform efforts in the 1990s (remember President Clinton’s vow to “end welfare as we know it”?), Vermont’s Reach Up program is designed to get people into the workforce and permanently out of poverty.  One of the most important programs in our overall welfare-to-work design is the Post-Secondary Education Program.

Because (incredibly!) Federal law does not allow “work participation” credit for college, Vermont set up a separate state-funded program to allow Reach Up recipients (mostly very young women) to attend college, raise their small children and receive Reach Up support while doing so.  The success rate for this cohort has been impressive.  Not only do young mothers then stay out of poverty, they actually earn a livable wage (which is more than twice the minimum wage).

For reasons as yet unclear, the Department for Children & Families (DCF) is apparently reluctant to advise new welfare recipients that this option even exists.  House Human Services heard testimony last week from a mother who already has an AA degree and is taking classes to become a nurse.  Unfortunately, none of the time she spends taking class, preparing for class, or traveling to class (tedious because our public transportation is so inadequate) counts toward the work requirement for her Reach Up grant.  As a result, her family is now at risk of being “sanctioned,” that is, having their monthly food and shelter grant reduced.  Just to put this in perspective, the “full” grant is just 49% of what a family actually needs to get by in Vermont.  So this mother may have to give up school to accept a fast food job.

The Governor’s plan to throw families off Reach Up in October if they have received 36 months of cumulative benefits would further undermine peoples’ ability to move out of poverty.  Either the parents will take low-wage jobs (if any jobs are open) or they and their children will slide further into poverty, possibly homelessness.

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