As the Governor and the Legislature re-assess the state's financial situation, VBSR urges them to observe the following principles:
- Hold steady on the State's long-term goals. The goals of Vermont's economic and fiscal policy are stated in terms of increasing sustainable wealth for Vermont's workers and communities, while preserving Vermont's assets. This translates into salaries, wages, employee benefits, and tax revenues (payroll, corporate income, sales, and property) paid by businesses and individuals. The goals also include preservation or enhancement of Vermont's human and natural environment in order to permit long-term, sustainable, orderly generation of value. There is no justification for abandoning the fundamentals of this solid long-term perspective.
- Maintain a tax structure that is based primarily on ability to pay. Sales tax is a regressive tax, with a higher burden on low-income Vermonters. A property tax without income sensitivity would also be a regressive tax. A state income tax piggy-backed on the new federal income tax structure allows the federal government to make tax policy for the State and also reduces the tax's progressiveness more and more as time goes on.
- Use spending to protect vulnerable groups and contribute to broad-based growth. This is not, as is often suggested, an either/or proposition. As an example, the unemployment compensation paid to community members can help local businesses survive and fuel new ventures.
- Recall that since every dollar the state spends goes directly into the economy, and assistance given to lower income or unemployed people tends to be used for necessities, state budget cuts in tough economic times are a missed stimulus opportunity.
- Resist the easy answer of deep, across-the-board budget cuts. Neither opportunities nor needs present themselves evenly.
- Preserve the ability of local school districts to raise equal funds equitably. Maintain state per pupil funding levels. Education equity is a core value our children and our communities deserve without regard to economic or political cycles.
- Gather and provide information to schools, municipalities and state agencies on ways to improve quality without increasing expenses. Thrift and ingenuity are Vermont traditions. Share the success stories.
- Remember throughout the evaluation of policy options that money is the servant of our values, not the master.
* Economic policy's purpose is commonly viewed as managing the overall pace of economic activity, seeking to maintain high levels of employment.