McClaughry: Blue-state Progressive budgets

by John McClaughry

Last week the Wall Street Journal compared blue state California with Red state Florida on government finances.

“Time and again,” they wrote, “progressives use putative budget emergencies to impose supposedly temporary tax increases that invariably become permanent as the revenue is baked into spending baselines. This is what happened in California in 2012 when Democrats raised the top rate to 13.3%.”

“California’s budget has since become even more dependent on the affluent. The top one-half percent of taxpayers pay 40% of state income tax, and their capital gains have plunged. Income-tax collections in this fiscal year are 34% below a year earlier and corporate-tax revenue is down 33%. Gov. Gavin Newsom last month increased the state’s projected budget deficit to $32 billion.”

“By contrast, tax revenue in Florida is exceeding forecasts. Florida’s corporate-tax revenue—at a 5.5% rate—during the first 10 months of this fiscal year is up 57% year-over-year. States tax corporate income based on the share of business done in their borders. … The opposite may be happening in California, New York and New Jersey.” Florida’s $117 billion budget this year is half as large as New York’s, though it has 2.5 million more people. The Sunshine State lacks an income tax and mandatory government collective-bargaining, which together create a tax-and-spend ratchet. An iron law in progressive states is that when revenue falls, taxes go up.”

With the enactment of the Democratic budget over Gov. Scott’s veto, Vermont may soon be another disappointing example.

The author, a Kirby resident, is founder and vice-president of the Ethan Allen Institute. To read all EAI news and commentary, go to

Categories: Commentary

6 replies »

  1. Thanks John for the comparison. Vermont’s liberals/progs in the legislature look up to their big brother, California for guidance in matters of environment and social policy and follow suit, as they go down the rathole. At least California once boasted being the world’s 8th largest economy, while Vermont’s revenue relies on tourism, maple candy and excessive taxation of it’s middle class citizenry…or what’s left of us. Tourism in Vermont is being destroyed now that the word is out that many of our hotels are now flophouses for junkies and others claiming to be un-housed, a program that was greatly expanded due to the COVID “emergency”. Vermont spends enormous amounts of funds on an education system that gives us pathetic test scores, because our legislature is owned by the VTNEA teachers’ union, but meanwhile we apparently cannot afford to maintain good striping down the center of our roads for the safety of the motoring public, including tourists. Ditto for the pathetic overall condition of our roads. Farmers who used to be “sacred cows” and exempt from aggressive regulations are now in the crosshairs of the legislature for their nutrient management practices. The libs in the legislature really dont know who butters their bread. It is the majority of Vermonters who buy into the left’s nonsense who vote to consistently maintain them in office. We have done this to ourselves. Liberalism is a mental disorder that primarily affects well-to-do, self-hating white people with this masochistic malaise. This economic death spiral could be reversed in one election cycle.

  2. It’s too bad that our legislators do not have the common sense to look at other states situations, like California, before they set such huge budgets, compared to the population, who ultimately have to pay it! When they start to see more and more people having to go onto state aid and the richer population start moving away, because they will be supporting the programs, maybe then!

  3. “Vermont may soon be another disappointing example.” Soon be ??? Those duplicitous self anointed purveyors of all things relating to cow manure have already made Vermont too expensive for all but the richest trust fund babies. Maybe that’s the plan ?

    • …richest trustfund babies, a few well-regulated tradespeople to keep their roofs and septic systems maintained and the rest are a majority of government-dependent serfs bribed with public money to vote every 2 years to maintain that status quo…

  4. When the exodus to open red states began in 2020, I figured people would find out the hard way that the scourge of the criminal, fraudulent, syndicate infiltrated throughout the country would manifest in due time. There is no escaping the ills of today’s society and we have the District of Corruption to thank for it. When the currency fails, there is no place that will escape the economic disasters of a worthless currency. The open borders to the North and South ensures that the millions of illegal border crashers are spread all over the country. The swamp runs sea to shining sea. The lesson is there is no place to run and hide in the United States. Stand up and fight for the Republic or be doomed to see it completely under the control of China or the Davos/UN psychopaths. United we stand, divided we fall.

  5. We only need to look at our neighbor and, yes, competitor across the river to compare the fiscal performance of red vs blue policy and balanced vs imbalanced legislatures.
    New Hampshire has 1.4M people and their budget is $7.6B per year. Vermont has 650k people with a budget of $8.5B. NH has a 12% smaller budget to support twice as many residents. Simply dividing budget by population, taxpayers or households will give you a relative ratio on how much more the tax burden and spending rate is in VT vs NH.
    Folks fixate on NH’s “higher” property tax but it’s only one part of the total tax burden. NH’s median property tax rate as reported by the VT Dept of Taxes is 2.13% where VT’s is 1.91%. Only 0.2% more is a pretty good deal when one pays in NH no income tax (VT 3.3-8.8%), no sales tax (VT 6-7%), and lower excise taxes (VT collects $1156 per capita where NH collects $711 per capita annually). Both Vermont and New Hampshire tax interest and dividends (I&D). Vermont taxes it as regular income. New Hampshire taxes it at flat 5% after $4800 on a joint return and after $2400 for individual returns. It also allows an exemption of $1200 for over 65 years old. The NH I&D tax will phase out by 2027. New Hampshire does not tax capital gains or social security. Vermont taxes both along with military pensions.

    Vermont has the 4th highest tax burden in the US, where NH ranks way down toward the lowest at 34th. NH ranks #1 for most effective use of and best return on taxpayers’ dollars. VT ranks #44.
    NH has a balanced legislature – VT has a liberal supermajority able to push through whatever agenda they “feel is best”. In Vermont, legislative discussions are controlled and limited, where committees can have no minority party membership (Senate NR&E for example), and the looming threat of a Governor veto override clouds the whole process.

    The New Hampshire House and Senate passed a 2024 and 2025 budget smaller than the budget originally asked for by Governor Sununu. That is how a balanced legislature, willing to discuss & compromise and cares about fiscal responsibility for its taxpayers, works!

    Oh yea, and NH lawmakers get paid only $100 per year! They deserve a merit pay for performance raise!