Douglas Should Cut Tax Loophole To Save Jobs

Rather than threatening to throw up to 600 state employees out of work, Governor Douglas should close what he admits is a "grossly unfair" tax loophole, to raise revenue and avoid the job cuts. The Douglas Administration keeps attacking state workers and government services in the name of closing the budget gap. He claims there is just no alternative to massive layoffs if state workers don’t agree to even more wage cuts and higher health care costs. First, let's note, state workers have offered significant concessions. Second, lets be clear: the Administration is wrong to say there is no alternative to job cuts. Like the false notion that Vermont is the highest taxed state in the nation or “Jim Equals Jobs,” it is political spin to push a political agenda – undermining state government. Third lets realize that Vermont taxes workers’ wages more than capital gains income from the sale of stocks and investments. If a dollar is a dollar why does Vermont tax a dollar earned plowing the interstate more than a dollar made selling a stock. It makes no sense. Only nine states do it. Vermont has since 2002. We can’t afford it any longer. And, a new analysis by the Institute on Taxation and Economic Policy (released in Vermont by the Public Assets Institute) says closing our capital gains tax break will generate up to $35 million in new revenue annually, more than enough to avoid job cuts.

SOS/People's Plan Rally

Rallies were held March 30th to tell the Legislature and Governor Douglas: No to More Cuts to vital programs & services - Yes to New Revenue to stop the cuts. - for a People's Plan!

Working Vermonters are struggling to keep our heads above water. We did not cause the problem. This revenue shortfall, this economic crisis is a product of the actions of financiers, bankers and corporate executives. They created this crisis, and now they want us to pay for it.

We are fighting for an alternative to the Douglas Cuts – and those suggested by the legislative leadership as well!

We're telling them to stop the cuts, raise revenue by making the wealthy pay their fair share, and establish a healthcare system that respects the right to healthcare.

We are part of something much bigger. Tens of thousands of people just took to the streets in London saying “We won’t pay for their crisis!” Telling the world leaders gathering in London to “put workers first”, to tackle poverty, inequality, and climate change.

There are huge demonstrations, and even general strikes across the globe. Our resistance here, our fight for justice is just beginning! We are building a movement!

We’re told that we must tighten our belts. But self-sacrifice will not help us out of this crisis because our actions did not get us here in the first place. The reasons for the economic crisis are rooted in their system.

The Douglas administration’s proposals threatens the human rights of Vermonters - disregarding basic needs like healthcare, housing, education, and dignified work.

The Governor is using this downturn as the excuse for what he has wanted to do for years: cut essential services, lay off workers in state government and our public schools –almost the last remaining bastions of unionization in Vermont. He continues to push policies that could throw the economy into another depression. Douglas’ proposal to deal with the revenue shortfall by cutting another 600 state jobs would seriously harm our economy. This is exactly the wrong thing to do:  each position in state government that is cut leads to the loss of at least one job outside of government due to decreased economic activity on the part of those state employees.  It also leads to increased demands on the State unemployment fund which is going short.

The state employee’s offered to give back $2600 in annual pay. They reached out their hand to the Douglas Administration – and they bit it! They say this isn’t enough.

And now the legislative leadership too is demanding more concessions! Their current budget plan includes another $14 million in cuts on the backs of state employees!

Protecting workers with $14m in cuts?

The VSEA held a rally today at the Statehouse to protest the cuts to state employees proposed by the Governor and the House and Senate leadership. They had over 300 folks on the Statehouse lawn, and then brought most of them up to the Cedar Creek room. Governor Douglas was in the building, and his staff secured a cagey retreat for him through the well of the House and out the back door.  He is as skilled at sneaking away as he is at defining the message. House Majority leader Floyd Nease and Senate President Pro Tem Peter Shumlin showed themselves skillful at message craft as well. The Governor had proposed to cut $17m from the State Employees.  The legislature's target is $14m in cuts to State Employees.  When Nease and Shumlin addressed the crowd they tried to make the $14m in cuts they propose for state workers sound like a victory for workers. VSEA members attended the Dem caucus meeting that afternoon (I was not present).  Labor would be wise to ask what the difference is between death by a thousand cuts and death by eight hundred cuts.

Save Our State Rallies

Activists are calling for rallies across Vermont on Monday to stop the State budget cuts and support a "People's Plan." Rally Locations will be held in: • Burlington: on Church and Main; 5:30pm • Montpelier: at the Pavilion Building, 109 State St; 5:00pm • Bennington: at the Intersection of Rte 7 & Rte 9; 4pm • Brattleboro: at Pliny Park in downtown Brattleboro; 5:30pm • Randolph: at Main St in front of Northfield Savings Bank; 5pm • Middlebury: in the Traffic Island @ Middlebury Inn; 12 Noon • Rutland: on West Street; 5:30pm • Johnson: downtown; 5pm • St Johnsbury: in front of the Athenaeum; 5pm • White River Junction: at the intersection of Routes 5 & 14; 5pm For more details, e-mail Save Our State. Governor Douglas has been arguing that the budget shortfall facing Vermont is a spending problem, and the gap should be closed without raising new revenue, but but rather through program cuts that will primarily affect children, the elderly, and low income Vermonters. As readers here know, many progressives see this as a revenue problem, and that revenues should be adjusted in order to close the gap.  House and Senate leadership seem to be trying to split the difference, raising some additional funds in taxes while cutting some essential services. This from the Workers' Center:
The People's Plan has three main thrusts: ● Maintaining and expanding programs in areas of fundamental need, including human services, housing, education and employment; ● Instituting equitable revenue policies that increase the contribution of the wealthy and tax unearned income at no less than the same rate as other income; ● Establishing a system of universal healthcare that is equitable, is accountable to the people and eliminates all barriers to the enjoyment of the human right to health. Bills that currently constitute the People's Plan include H.100/S.88 (healthcare), H.177 (revenue) and H.257 (public services).
For more information on the People's Plan, visit the Workers' Center site.

Douglas worsening the crisis

This from a press release sent out earlier this week:
Progressive Legislators stated clearly today that they oppose the Governors proposed job cuts. Considering the State employees had come up with a reasonable approach to reducing costs for one year while we examine the structural challenges, these cuts smack of pure ideology, and not sound fiscal frugality. In one specific example, a position cut in the Water Quality Division helps farmers comply with water quality standards, thus keeping Lake Champlain cleaner.  This position is 75% funded by Federal dollars.  Not only is this position good for our drinking water and tourism, it is also a smart use of state money, leveraging $3 with only $1 of State resources.
That's right. Douglas would throw away $3 Federal dollars to cut one state dollar.  And in the process, that is one more person unemployed.  No longer purchasing stuff, no longer paying income taxes, now drawing unemployment. Rep. David Zuckerman in the release:
“The Governor’s actions make clear that he is not proposing cuts in order to deal with the financial crisis—rather he is using the financial crisis to justify cuts in programs that the people of Vermont want continued.”
And making the financial crisis worse in the short term.

What the Free Press Won't Tell You

The Brattleboro Reformer ran a hard-hitting editorial last week that shows how Gov. Douglas has actually increased the size of state government during his tenure. This is an issue that will be on the table for the rest of the legislative session so it's important that no one miss this excellent analysis. The 660 job cuts Gov. Douglas has proposed would take state government back to about the size it was in 2002 when Douglas first took office. The problem is that he would keep his highly paid political appointees and axe lower paid union workers -- you know, the folks who actually do the work. But who cares which jobs are cut or how much money is actually saved so long as he can get a big headline. (The most recent cut of 400 positions included jobs fully funded by the Federal government. Vermont lost services. We saved no salary expense. But the Governor got the headline, and 400 is a nice round number.) Meanwhile the Burlington Free Press continues to exalt Douglas and his henchmen and sounds like part of his PR machine. Its coverage last week of the Vermont State Employees Union’s offer of wage and benefit concessions was insulting to the hard work and good faith of state workers. I’m grateful we still have some newspapers in the state that believe citizens deserve real critique and analysis from the press.
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