By Christian Wade, for The Center Square
(The Center Square) — Vermont’s economy is poised to avoid a recession with inflation dropping and revenues improving, according to a new report, which comes as state lawmakers prepare to get to work on a new budget.
The report was submitted to the state’s Emergency Committee, which includes Gov. Phil Scott and lawmakers from the House and Senate budget and tax committees. It cited the state’s fiscal resiliency, efforts to bring down inflation, and historically low levels of unemployment in both U.S. and state labor markets for the post-pandemic economic turnaround.
Brushing aside previous concerns about a mild recession, Vermont’s economists told panel members that the economy and the state’s revenues are strengthening.
“Despite all the pessimism about this time last year, people who practice what we practice thought the economy would be hitting a recession. Here we are a year later, the economy’s still making forward progress,” Jeffrey Carr, an economist for the state Agency of Administration, told members of the committee in testimony last week. Inflation is, in fact, coming down.
Carr said the unemployment rate in Vermont is hovering near historic lows, at 2.5% last month. In 2024, the state is projecting a $29.3 million increase in the General Fund, he said.
The findings come nearly a year after the state’s economists predicted Vermont’s general fund revenues would drop nearly 9% in the fiscal year that begins July 1, outpacing even the 2009 downturn during the Great Recession.
While the likelihood of a session has subsided, the report’s authors told policymakers that the state’s economy will still slow, along with state revenues, in coming years. They also noted that federal pandemic-related relief is drying up, which will mean less federal revenue for the state.
“The ‘soft landing’ runway may be in sight, but sticking the landing still carries considerable downside risks and will require both skill and luck to achieve,” they wrote in the report.
The report’s authors said while commodity and other product inputs will drive down price pressures, lagging labor costs “could do the opposite” to state revenues.
“Wage increases are often associated with catch-up to past inflation, especially at the onset of an inflation spike, rather than anticipating future costs,” they wrote. “Amidst current labor market conditions, there is likely to be continued upward wage and salary pressure from both organized labor and occupations experiencing labor shortages.”
Categories: Business
I guess being on the State payroll, telling the plain Truth is discouraged and frowned upon. Then again, Arizona GOP Chair let it slip the cartels are operating in all 50 states – that is likely what is driving our economy here as crime and dead bodies are good for business I suppose.
Of course, these (deep) State officials are reporting economic optimism. They have a super-majority in the legislature to do their bidding. But that doesn’t make their vision any less short-sighted. The only people increasing employment and wage growth in Vermont are the tax subsidized government, healthcare, education, and utility sectors. This report is a continuing charade foisted on naive citizens who haven’t a clue about economics (macro or micro).
Never mind our outrageously expensive and failing education system, or the epidemic homelessness, drug overdoses, and suicides it fosters. Never mind our young professionals leaving the State in droves. Just wait until the legislature enacts its latest revenue enhancement scheme – imposing more new taxes on the state’s wealthiest residents, taxing people with more than $10 million in net worth on their capital gains, even if the gains have not yet been realized.
I mean really – if you want to drive wealthy people out of Vermont, what better way to do it. Only a fool would stay here. And these folks didn’t make their money being fools.
I suspect I’m spitting into the wind. But I want to be sure to be able to point to the idiots in Vermont’s legislature and administrative blob when the proverbial ‘you-know-what’ hits the fan.
Of course I hope that Jeff Carr is right, but even he is, an 18% tax increase on some of the most heavily taxed citizens in the country has got to affect these calculations, and my uneducated guess would tell me that affect would be negitive. No new taxes ! The spendthrifts under the Golden Dome remind me of a drunkin Imelda Marcos at a 50% off shoe sale. “Oh, I’ll take three of those, eiight of those, a half dozen of them, oh never mind, I’ll just buy the store, what the hey it’s not my money !”
“…efforts to bring down inflation…”. So inflation has tapered off recently yet overall inflation since Biden took office is in the neighborhood of 30%. I know my income hasn’t gone up anywhere near 30% in that time. How about yours? And yet, now we are supposed to swallow 18% school tax and a slew of new programs and government positions the Legislature is salivating over.
Apparently Vermont’s economists (paid by the state for their opinions) are more bullish on tax revenue than actual economic conditions. The still problematic lack of willing hirable employees-(growth requires people to work)- the amount of federal funds coming into Vermont- and the state and federal fervor over carbon atoms give the illusion of a strong economy, but don’t be drawn in by the pretending. If truly the economic (and tax revenue) outlooks were good- why the super-majority push for a wealth tax, assets tax- and why the 18% property tax increase coming this year? The greatest recipient of strong economic indicators is the state legislature as they collude for more spending….so why not pretend things are good?
state paid economists for the states narrative to justify higher taxes
they lie and get paid for it///
“Economists” aka perverts.
https://mises.org/wire/fed-prepares-bank-crisis-while-telling-americans-economy-strong
Here are the facts folks:
– the labor market is strong
– the unemployment rate is low (near historical lows in Vermont)
– the economy is growing (despite predictions last year of a recession)
– the rate of inflation is falling
– the federal deficit is too high – but it’s lower than when Trump was in office
And the 18% increase in property taxes? That’s only a projection. In Vermont, unlike any other state that I’m aware of, voters – not elected officials – decide how much to spend on their local schools. So get out and vote in March – it’s direct democracy.
Re: “The labor market is strong.”
Says who? If you look at the U.S. Bureau of Labor Statistics for Vermont, the labor participation rate, while slowly increasing since the pandemic, is still far below its pre-pandemic levels.
Re: “– the unemployment rate is low (near historical lows in Vermont)
If you look at the U.S. Bureau of Labor Statistics for Vermont, you can clearly see that employment increases are primarily in the tax subsidized sectors of Education, Healthcare, Government, and Utilities. Manufacturing, Construction, Transportation, Finance and other non-farm sectors are flat. We’re robbing Peter to pay Paul.
Re: “– the economy is growing (despite predictions last year of a recession)”
Again, what growth there is in the economy is due to tax subsidized spending in the above referenced sectors. Just look at the increase in education spending. That ‘grows’ the economy, at the expense of everyone else.
Re: “– the rate of inflation is falling”
Of course, it is. It couldn’t keep on rising at the rate it reached in 2021 – Biden’s first year in office.
In 2021, the rate of inflation was 7%.
In 2022, the rate was 6.5%… over the already high prices reached in 2021.
In 2023, the rate of inflation was 3.4%… again, over the already high prices in 2022.
In 2024, with the projected increase in education spending, fossil fuel carbon taxes, and the raises the legislature is sure to bequeath itself, how do you think will affect inflation?
In 2017, when Trump was in office, the inflation rate was 2.1%.
In 2018, it was 1.9%.
In 2019, it was 2.3%.
And in 2020, inflation was only 1.4%.
Re: “– the federal deficit is too high – but it’s lower than when Trump was in office”
The national debt was $20.25 trillion in 2017. Trump’s first year in office.
It was $21.56 trillion in 2018.
$22.72 trillion in 2019.
$26.95 trillion in 2020 – first Covid year – Trump’s last year in office.
The national debt was $28.43 trillion in 2021 – Biden’s first year in office.
It was $31 trillion in 2022.
$33.2 trillion in 2023.
And the national debt is already $34 trillion in 2024 – and projected to reach $36 trillion by year end.
Re: “And the 18% increase in property taxes? That’s only a projection.”
Of course it is. And the projection was predicted. As was my assertion that our education administrators would come back later and claim that they’ve cut the initial proposed budget in half, to only 9%. But is still a 9% increase – not a cut, even though “the rate of inflation is falling”.
Why is 9% the magic number? Because under Act 127, any district spending over a 10% increase will bring an audit by the Agency of Education.
Mark: Your commentary is pure sophistry. And it’s only feasible to continue the charade in a ‘direct democracy’. I.E., Two wolves and a lamb voting on what to have for lunch.
Great posts. (I cannot use the “thumbs up” feature). The issue is, as always, our unfree press. No one is aware of what is going on in VT as there is no press to report the news – except VDC & that takes a certain degree of autonomy, independent thought, & effort to access. The mass media thoroughly & effectively deceives the public through propaganda and through omission. The people remain ignorant.
Damn you, VT Digger, Seven Days, Bennington Banner and all the rest! You have forsaken your duty to the people, to this Republic, to your forefathers and your own children in exchange for relatively trifling employ at a pennyante press at the cost of destroying a once-free society! You possess no shame but only arrogance, and you remain assured that beyond this life there is nothingness……so what the “Hell”? So to speak.
Has it EVER occurred to any of you that just perhaps billions of faith followers, millions of scholars & scientists, Bible texts, and the equal number of completely unexplainable events that are evidenced as miracles might just be proving you wrong? If the existence of God were being tried in a courtroom today (far, far away from the kangaroo courts you lasso President Trump into) do you realize a preponderance of the evidence would prove beyond a reasonable doubt that He indeed exists and endures? Now what?
Lies damned lies and statistics. Consider this ‘inflation’ example.
You pay $1000 a month for an apartment in 2020.
With 7% inflation in 2021, the rent increases to $1070 per month. A $70 per month increase over 2020.
In 2022, with 6.5% inflation, the rent increases to $1139 per month. A $69 per month increase over 2021.
In 2023, with 3.4% inflation, the rent increases to $1178 per month. A $39 per month increase over 2022.
Yes, the 2023 inflation rate ‘declined’ 50% from the 2021 and 2022 inflation rate highs. But you’re still paying $178 more per month than you did in 2020. On a yearly basis, you’re paying $2,136 more in 2023 than you did in 2020.
And that’s just rent. If food and energy costs increase by the same amount, you would be paying $6,400 a year more than you did in 2020. That means you have to receive a $3.20 increase in hourly wage to break even.
Caveat emptor.
Kathleen, in all fairness, it’s up to you and every other voter in Vermont to see through the political and MSM’s commentary and tell the whole truth. It’s not rocket science. It’s basic math. Which perhaps explains why our public education monopoly isn’t teaching kids how to communicate or how to add, subtract, multiply and divide.
Faith takes you only so far. You must do the homework too.