By Sen. Randy Brock (R-Franklin) and Rep. Pattie McCoy (R-Poultney)
It’s happened – 2020 has finally ended, and a new year is upon us. Last year delivered a global pandemic that affected every Vermonter in ways that have not been seen in a century. As 2021 unfolds, dealing with the huge challenges that have emerged demands vision, determination and the recognition that hard work lies ahead.
That’s why Republicans in the legislature this year will make good on their campaign promises to have a laser focus on post-COVID recovery in three specific areas.
First, we must concentrate on addressing the needs of the individual Vermonters and Vermont businesses that need help now because of the way the virus has impacted their daily lives. We will work to ensure that federal stimulus money is allocated wisely and fairly. Republicans are committed to doing everything in our power to hold the line that our caucus did last year to make sure that as much money as is legally possible goes into the hands of those Vermonters who have been affected. We will avoid the temptation of some to use COVID funding as a way to channel that money back into existing state programs that have struggled because of prior financial mismanagement, not because of COVID and the response. Your Republican legislators will also be looking to sound the alarm and, when possible, stop any attempts to further burden COVID-affected Vermonters through unrelated new taxes, fees or costly regulations. In their attempt to help, we must make sure that others in the General Assembly first do no harm to an already weakened economy.
Second, we will propose new legislation that is designed to improve our economy and make government work better.
We are again introducing legislation that would end the tax on military pensions, taxes that only seven states continue fully to collect. The soon-to-be retiring armed forces nurses and other health care professionals are ideal candidates to help Vermont resolve our critical shortage of workers and to actually gain new revenues by adding to our tax base. The shortage of key skills today costs Vermont millions of dollars annually as we import travelling workers from other states to fill the need. We want Vermont to be an attractive place for those military retirees so they will bring their skills to our hospitals and other workplaces that need them.
To address important individual health needs, Republican legislators, with support from the Governor, again will be proposing a new voluntary Paid Family Leave program. The proposal would avoid adding a costly and burdensome statewide payroll tax on the businesses that can least afford it – but also provide a simple solution to those businesses that want to make it available to their employees on an opt-in basis.
Vermont Republicans will also propose new approaches for dealing with Vermont’s chronic shortage of truly affordable housing.
The pandemic has reinforced the need to bring high speed broadband and cellular service to all of Vermont. In conjunction with the Governor, we will be proposing new measures to bring modern connectivity to all Vermonters, especially those in rural areas. We hope that all of our colleagues will join with us in this critical effort.
Third, we’ll work to lighten the load on every Vermonter by making our state government more efficient, more secure and focused on the core programs that make the biggest impact. We need to examine everything we do and innovate to find new ways to make state government less costly and less labor intensive.
COVID has forced every business, and even many agencies within state government, to rethink what services and procedures are truly essential. We must get creative about ways to accomplish the same workload when we have less people in state office buildings. Dumping more work on fewer employees will only yield worse results for everyone. We must use lessons learned from COVID and apply best practices from elsewhere to equip our existing state workforce with streamlined tools and processes.
There are many other issues Republicans will face and fight for in this legislative session, but the work to recover from the pandemic and to rebuild our economy unite Republicans from across the state. This is our main focus; this is our primary mission. The Republican caucus will be working hard to keep the General Assembly on task and on mission.
We pledge to do this important work with a spirit of cooperation and collegiality with all members, regardless of political affiliation. And while we may not have the legislative majority, let it not be said that Vermont Republicans do not have the ideas and the resolve to move us all forward.
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Senator Randy Brock (R-Franklin) and Representative Pattie McCoy (R-Poultney) are the Senate Minority Leader and the House Minority Leader, respectively, in the Vermont General Assembly.
Categories: State Government
Not a word about the Teacher and Government Pension time-bomb.
Here’s the deal. If a teacher earns $56,000, on average, over a 25 year period, pays 5.5% into their retirement account, the total principle investment equals $75,000. At a 4% annual rate of return, that investment is worth $124,937 after 25 years.
If the teacher retires and has $124,937 in the bank, still earning 4% annualized interest, the annual interest return is $5000 per year, without spending any principle.
Now then, “for example, a teacher who works for 25 years with a final average salary of $70,000 would be eligible for an annual pension benefit worth 50 percent of their average final salary.” That’s $35,000 per year.
https://www.teacherpensions.org/state/vermont
Given that the 4% rate of return on the teacher’s investment nets $5000 per year, where does the remaining $30,000 come from?
Well, the amount of money in a bank account needed to provide an annual $30,000 return at 4% interest is $750,000. And an actuarial model assuming the retiree lives 25 years after retiring at 60 years of age would indicate that paying out the principle, with zero interest, at $30,000 each year would equal the $750,000 in the bank account. After 25 years there would be a zero sum balance …. not counting any interest earned.
So, at a 4% rate of return on that bank account, as its being reduced over the 25 year period, the account produced $50,000 in interest. In other words, after 25 years of retirement payments equaling $35,000 per year, there should be $50,000 still in each teacher’s bank account, if the plan has been fully funded.
OK. So, who funds the $750,000 nest egg the teacher didn’t pay? You guessed it. It’s the employer’s contribution. Yes, that’s the State. It’s the taxpayers.
Using the 4% rate of return assumption, the State has to invest $30,000 each year, for each teacher, to create the $750,000 nest egg required to fund the balance of the teacher’s annual retirement payment. If there are 80,000 students in Vermont with a 10 to 1 student teacher ratio, there are 8000 teachers for whom the State must contribute $30,000 per year – IN ADDITION TO THEIR SALARIES AND BENEFITS. The State’s retirement contribution for teachers alone costs Vermont taxpayers, give or take, $240 Million per year, again – IN ADDITION TO THEIR SALARIES AND BENEFITS.
And if interest rates are less than 4% per year, the liability increases. And this doesn’t count the 8000 or so non-teacher employees in the State’s public school system who have similar, albeit less expensive, retirement plans.
Now let’s consider government workers not employed in the education system. There are 8000+- people employed in the State government.
Are you starting to get an idea of what this Ponzi scheme looks like?
One time bomb of many – the era of vapor paper dollars, unabated deficits, and unlimited credit lines is over. In 2008, before the crash, many states were teetering on bankruptcy and many fully knew pensions were no longer feasible. The answer? Print more vapor paper, start more wars, and keep people believing in a failing, flailing corrupt system. In the meantime, prop up China and make them the world-wide economic engine. Silk road? For all the tea and toasters imported from China? How much investment money has gone through and to China, the Vatican Bank, and the Bank of England?
There are truly good points brought forth,but I still don’t hear a deep voice of we the people who need our voices heard.Freedom of speech is gone in Vermont,and legislators actually don’t need to take care of us!We need the government out of our lives to let us seek and find our God given Right to Life,Liberty and the pursuit of happiness through hard work,and not to be taxed without representation or social justice pressure!I am thankful of the legislators efforts,but you need to go by our Constitution that gives you your power through and by we the people,and nothing more or less!!
Freedom of speech isn’t gone. What’s missing are our so-called representatives who will either listen to us or give a hoot. I’m afraid we (those who appreciate our Constitutional Republic, and the freedom and liberty it brings), are on our own. As George Bernard Shaw said, ‘Liberty means repsonsibility. That’s why most men dread it.’
What we do about this circumstance is a topic for a different forum.
Again, no mention of the high property taxes due to the cost of educating our fewer and fewer students! This high cost affects senior citizens in a very real way. The current system is not working. Taxes should be on ability to pay (income) not the value of a property. Also senior citizens have been paying education taxes for years and when we reach retirement age we should get a real break, no education tax! The high education tax forces many retired folks into selling their home!