Republished from the April 4 Advocacy Update of the Lake Champlain Chamber
by Austin Davis, LCC Director of Government Affairs
We’re experiencing unprecedented volatility at the federal level and significant disruptions locally. This week foreshadowed monumental changes, both at the federal and state level, that will have lasting impacts for decades to come.
The past week injected many variables into the Vermont economy. Conventional wisdom is Vermont’s economy never runs too hot or too cold, something that has held us back as we haven’t seen the growth in boom times yet protected us in financial slumps.
- The caveat is that national slumps have traditionally meant more federal funds injected into the economy or at least steady federal funds, which had an outside impact on Vermont’s small economy
- This time is proving different, as any economic downturn will be paired with cuts to federal funds.
Hemorrhaging federal funds: This week saw more news of cuts of federal funding to Vermont – Vermont Food bank, $16.7 million in COVID-era funding was clawed back (the equivalent of roughly 1% on a Vermont property tax bill) from the education fund, and the future of Vermont’s $23 million in LIHEAP is in question.
Tariff-iying: The State Treasurer’s Office estimates Vermont households could see about $3,800 in additional costs per year due to tariffs, or approximately $1 billion annually in aggregate for Vermont, based on data from the Yale Budget Lab. Read more about that here.
In the nation’s capitol, the President’s budget advocates are counting $600 billion in tariff revenue over the next decade to cover the cost of their tax package, which the President refers to as “one big beautiful bill.”
The U.S. Senate passed a procedural hurdle Thursday that allows them to move forward with their budget resolution under reconciliation.
- The package would raise the debt ceiling, make the 2017 Tax Cuts and Jobs Act permanent, and go further with another $1.5 trillion additional in tax cuts.
- To make the math work, the resolution instructs committees to find a minimum of $4 billion in savings, which is why you hear so much concern from observers about Medicaid.