Posted by Chris Campion

The Vermont Department of Labor recently published the October 2014 unemployment numbers, showing an unemployment rate of 4.4%, matching September’s adjusted rate of 4.4%.  But let the Commissioner’s Message speak loud and clear so all can understand what’s going on with employment in Vermont:

Vermont employers are reporting increased opportunities throughout the state. During the summer months, there appeared to be some signs that the economic expansion was slowing.  Recent data from Vermont businesses are pointing in a different direction — towards ongoing economic growth in which jobs are being created and filled; and it is the private sector leading the way.

First of all, let’s correct the Commissioner’s thinking here:  There are 200 more unemployed people in October than there was in September.  That doesn’t seem to comport with the idea that businesses are “pointing” in a different direction, if, indeed, businesses are allowed to “point” in directions othen than that the State Board of Business-Pointing approves of in its annual review process.

An increase in the number of unemployed – and seasonally adjusted, by the way – does not reflect a “different” direction.  In fact, if you look at the state’s own numbers on this (which apparently the Commish here is not wont to do), the October 2013 to October 2014 trend in the number of unemployed is going up, not down.  Numbers courtesy of the VT Dept. of Labor:

It's pointing in a direction, all right.

It’s pointing in a direction, all right.

Vermont’s labor force is holding more or less steady at 350.6K, without a lot of variation in 2014.  The ideal situation would be a growing labor force, though, not a “hold steady” – and just to keep things in perspective, Vermont’s peak labor force for the last 38 years was in March 2009, at 361.8K.  It has gone downhill from that peak number ever since.

To compare that highest historical labor force number to 2014, the lowest monthly total in 2014 was 350,150 in August.  This means our labor force 5 years ago was roughly 10,000 people stronger than it is today – yet we’re told we’re heading in a “different direction”.  Well, the direction is different, that’s for sure – it’s different from what Vermonters would like to see.  This can more simply be called The Wrong Direction.

Similar numbers are reflected in the prior year as well:

Looks a lot like this 2014, for some reason.  Golly.

So, to help the Commissioner out, here’s what Vermonters really want (and yes, I’ll claim to speak for all of them today):

- A growing labor force.

- Higher number of employed Vermonters.

- Lower number of unemployed Vermonters.

That’s what Vermonters are looking for, not claims that Vermont is creating and filling jobs.  Because Vermont isn’t doing that, it’s that simple.  How can you tell?  Let’s try looking at averages for the Labor Force, Employment, and Unemployment for the past 5 years (Oct-Sept timeframes):

The number of unemployed drops, but so does labor force participation - which gives VT it's magically low unemployment numbers.

The number of unemployed drops, but so does labor force participation – which gives VT it’s magically low unemployment numbers.

While the number of unemployed is dropping, it drops in direct correlation to the number of people dropping out of the labor force.  The Employed number remains fairly steady for 5 years, yet the number of people in the labor force is dropping – which means that the jobs outlook is not improving, or you’d see a higher number of employed people, regardless of the labor force participation rate.

What’s also interesting is that while the state claims that the private sector “led the way” (as if this should be a unique event in Vermont’s economic history; shouldn’t that always be the goal?), the state’s seasonally adjusted data shows that gov’t “led the way” at an almost 2-1 margin from September to October.  Total non-farm gain was 900 jobs, with 600 from the government sector, and 300 from the private sector.

Is this what leading from behind looks like?

If this is what constitutes good economic news for Vermont, I’d really hate to see what bad news looks like.


by John McClaughryJohn McClaughry

The Vermont Administrative State is again on the march.

The Administrative State is one where many functions of government are centralized and controlled by state agencies and boards, and ever fewer are retained under the democratic control of local public bodies and the people themselves.

Since 1921 Vermont has had an Administrative State for Transportation. The State took control of state and federal highways, and generally supervised town roads and streets, airports and railroads.

This centralization has generally been noncontroversial. The state’s highway system is clearly a public good, and most of the financing flows from state and federal coffers.  Everyone agrees that the State has every right to license those who use the highways, and to tax vehicle owners and motor fuel users to maintain the system.

The first modern attempt to enlarge the Administrative State failed. In 1970 the legislature enacted the development control law, Act 250. The newly appointed Environmental Board was tasked with creating a Land Use Plan setting forth how every acre of the state could and should be used in the public interest.

Vermonters balked. It was one thing to have the State control the high end of the transportation system.  It was quite another to have a state Environmental Board control the allowed uses of all private land. From 1973 to 1976 citizens waged a heated battle against the State Land Use Plan, until its last weakened version quietly disappeared in the senate. In 1984 the legislature repealed the requirement that there even be such a plan. What remains of the original Act 250 are the permit criteria requirements for larger developments.

Gov. Kunin’s 1988 effort to revive state-enforced land use planning – in her words “uniform in standard, specific in requirements, and tough on delinquents” – led to Act 200. But her longed-for state land controls faded away soon after passage, when 128 towns adopted resolutions condemning the scheme.

The next leap forward came in 1997 with Act 60, which gave sweeping but not complete powers to the State Board of Education and (now) Agency of Education. Now there is a new proposal for going the rest of the way into the full-bore Administrative State for Education (see below).

In 2011 single payer health care activists, led by new Gov. Peter Shumlin, finally succeeded in creating the Administrative State for Health Care. When Green Mountain Care appears (supposedly in 2017), it will abolish private health insurance, and allocate all health care through the appointed Green Mountain Care Board. It will ensure “appropriate care at the appropriate time in the appropriate setting”. The Board will of course ration that care to keep spending within the amount that can be extracted from taxpayers.

Last month came the latest proposal to create the ultimate Administrative State for Education. Lt. Gov. Phil Scott, not heretofore known for his bold pronouncements on public issues, advocated creating the equivalent of the Green Mountain Care Board “to help rein in school spending costs and control education property taxes.”

Scott said his autonomous board of experts could control school budgets, adjust property tax rates, and force consolidations. At least by implication, it could take any action it saw fit to flatten out rising public school spending.

Interestingly, Scott’s Progressive opponent Dean Corren, an ardent supporter of the Administrative State for Health Care, called Scott’s all-powerful Board a “total state takeover”. Even Gov. Shumlin chimed in with this support for local control : “One of the worst ideas that we can endeavor is telling local communities that we’re gonna take away their power to choose what they’re gonna spend on education on town meeting day. That’s a basic right of Vermonters.”

It’s not likely that Scott will press forward with this ill-conceived brainchild, but there will ever be new proposals to centralize all power in the State. That is the central goal of modern (post-1912) Progressivism: put everything possible under the centralized control of enlightened experts, order ignorant and selfish citizens and their local governments to do their bidding, and extract the needed funds from taxpayers helpless to resist the power of the Great Administrative State. And if the disgruntled citizens are restive, restrict their political rights to make sure they cannot effectively resist.

The Great Administrative State leads to citizen powerlessness. It will ultimately crush citizen initiative, restrict liberty, and reduce its citizens to subjects.

Free Vermonters need to say: Not here. Not now. Not ever.

-  John McClaughry is vice president of the Ethan Allen Institute (


By Rob RoperRob Roper

Vermonters have been waiting years to find out how the state plans to pay for a $5 billion plus single payer healthcare system that will require at a minimum $2 billion in new taxes. The law putting Vermont on the path to single payer says that funding plan was to have been completed in January of 2013. It’s two years late because governor Peter Shumlin says, “We’ve got to get it right.”

Well, now it turns out the guy tasked with determining whether or not the plan will be “right”, Jonathan Gruber, has been all over the national news, captured in a number of embarrassing videos bragging about how he and others misled us “stupid” American voters into supporting (or at least not actively opposing) the Affordable Care Act under false premises.

In one video Gruber says:

This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies…. If you had a law which said that healthy people are going to pay in – you made explicit healthy people pay in and sick people get money, it would not have passed… Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical for the thing to pass… Look, I wish … that we could make it all transparent, but I’d rather have this law than not.

Translation: I misled the American people to see a bill I wanted to see pass pass.

Today, Vermonters are paying this guy $400,000 of taxpayer money ($500/hr.) to vet the most expensive, complicated and intrusive government program in state history – a program that Gruber really really wants to see implemented.

This is totally unacceptable. We cannot trust him. Jonathan Gruber is a single payer evangelist. He was a co-author of the Hsiao Report of 2011 that launched Vermont on the path toward the nation’s first single payer system. He has a personal and ideological stake in the outcome.

Will he tell us the truth about whether the numbers work? Will he tell us the truth about how single payer will impact businesses, families, individuals, and taxpayers? Qr, will he take advantage of our ‘stupidity’ to sell us a bill of goods because he’d rather have a “first in the nation” single payer program than not? The safe money has to be on the latter.

We also have to ask ourselves if the Shumlin Administration that hired Gruber and single payer advocates in the legislature share their high-priced consultant’s view that “lack of transparency is a huge political advantage,” and, when you’d rather have something than not, the ends justify the means.

Certainly the fact that the Administration has gone to extraordinary lengths to keep any details of a funding plan secret for three years, even despite court actions and Freedom of Information requests, indicates they agree with Gruber’s notion that lack of transparency is a good thing.

In the legislature, an interview by Vermont Watchdog captured Senate Healthcare Committee chair Claire Ayer’s reaction to the Gruber videos:

Ayer stopped short of calling for Gruber to be fired, saying his job is to provide important data to the Legislature. “We didn’t hire him to do public relations — we hired him to give us data. He’s a very highly nationally respected economist who specializes in the health care field. … I’m sure he knows by now we don’t expect him to ever say things like that again in a public setting.”

But in a private setting it would be okay? And, “highly respected”? Well, not so much anymore. Quite frankly, if all Senator Ayer is upset about is what Gruber said, she’s just as bad as he is. To quote former Vermont governor and physician Howard Dean, who weighed in on the topic, “The problem is not that [Gruber] said it, the problem is that he thinks it.” Either Ayer doesn’t get this, or she thinks it too.

In less than two months, Peter Shumlin will unveil a funding plan for single payer that he’s taken over three years to “get right.” If the person validating the notion that the plan we’re presented with is, in fact, “right” is Jonathan Gruber, nobody should believe it. The man has zero credibility.

Peter Shumlin came within a whisker of losing his election to Scott Milne, and Democrats in the legislature lost eleven seats to Republicans largely because they have governed with a lack of transparency, a lack of honesty, and a lack of competence. A good step toward regaining some credibility on these fronts would be to fire Jonathan Gruber, the poster child for all of these qualities, immediately.

- Rob Roper is president of the Ethan Allen Institute ( He lives in Stowe.



Posted by Shayne Spence

Despite the assurance that the now-infamous Jonathan Gruber would no longer be receiving money from his contract with the state of Vermont, it appears that this claim was simply more smoke and mirrors from the Shumlin Administration.  According to Breitbart News:

Lawrence Miller, Vermont’s health care reform chief, says the state of Vermont is going to cut Jonathan Gruber’s pay, but keep his $450,000 contract, according to the Burlington Free Press. Miller said that he had informed Gruber over the phone about the changed terms of the contract, and that Gruber had agreed to those terms.

Under Vermont law however, and under the terms of the personal services contract #27277 between Vermont’s Agency of Administration and Jonathan Gruber, signed by Gruber and Secretary of Administration Jeb Spaulding on July 16, 2014, the contract cannot be amended unless the amendment has been signed by both parties and subsequently approved by Vermont’s Attorney General and Secretary of Administration.

Breitbart’s Michael Patrick Leahy goes on to write, “Breitbart News contacted Mr. Miller’s office, the Vermont Attorney General’s office, the Secretary of Administration’s office, and Jonathan Gruber asking to see a signed copy of the amendment to the contract, approved by all parties. None of these parties have responded nor have any of these parties produced the approved amendment to the contract.”

Despite Mr. Miller’s continued claims that “we will not be paying him any further”, it would appear that there has been no change in Dr. Gruber’s contractual status with the state, and his previously agreed-upon compensation remains intact.  Even if it is only his team of graduate students running the economic models, he is still contractually guaranteed pay of $400,000 taxpayer dollars.  And the idea that his team will be able to run these models, which Gruber created, independent of the ghost of their professor’s reprehensible views, is laughable at best.  Even without Gruber at the helm, one has to question whether his opinions about the stupidity of the voter have rubbed off on his acolytes.

Many writers have already pointed out that Gruber has already received $160,000 for his work to date, and it would appear he still stands to receive even more.  But not many have noted that his team of programmers has invoiced for the same amount, at a rate of $100/hour.  So even though Gruber’s contract was for $400,000, the amount Vermonters are really going to end up paying could be as high as double that.

Gruber’s utopia of an opaque government, keeping important information from the voters and in some cases attempting to mislead them to achieve a political end, seems to be coming to fruition here in Vermont.  It is high time for the Governor to send this elitist back home to Massachusetts, and demand that he return the money he has taken from honest taxpayers.

Hat tip to Michael Patrick Leahy at Breitbart News for breaking this story.



Posted by Rob Roper

The Shumlin Administration announced that they would no longer be paying Jonathan Gruber for his services consulting on the financial feasibility of Green Mountain Care. The hoped for takeaway here is that Gruber’s gone; problem solved; end of story.

It would be nice if this was true, but it’s not.

This PR move is, in fact, exactly the kind of jiggering of the books to make a misleading political point that Gruber has been bragging about on video for the past few years.  Here’s the rest of the story. The part they’re trying to hide…

Despite the optics of Shumlin’s posturing, Gruber is not really going away. He will continue to consult, but will do so pro bono. (Losing $160,000 of the $6 million or so he’s raked in isn’t going to cost the man any meals). His team will continue to be paid. And, most critically, Gruber’s data, which he has admitted to manipulating in past consulting gigs to get politically palatable outcomes, will still be used to evaluate how much moving to a single payer healthcare system will cost Vermonters and impact our economy.  None of this is acceptable.

Shumlin wants us to forget about this story, and he and Gruber are counting on the same “stupidity of the American voter” that they’ve counted upon in the past to make that happen. I’d like to think we’re all a little smarter than we were a week ago.

Breaking news from North Carolina shows a proper response to revelations about Gruber. There, a spokesman for the state’s Auditor said after terminating their relationship with Gruber, “We can’t use you on a project where you have a bias or where people might even think you have a bias.”

At the end of the day, Vermonters cannot rely on the advice of someone who has admitted to misleading the public because he’d “rather have a law than not.” Not even if he’s willing to provide that advice for free.

- Rob Roper is president of the Ethan Allen Institute (


By John J. Metzler

UNITED NATIONS–The time is  ticking as American and NATO forces begin the countdown to military withdrawal from Afghanistan by year’s end.  But as Taliban militants watch the clock and the calendar, eagerly awaiting the foreign troop pullouts,  thus hoping to topple the country’s still teetering government,   still another threat as dangerous as the Islamic militants lurks in the shadows.

Over the past year, opium production surged 17% to hit a record high according to the United Nations.  Despite concerted international efforts to stop illicit narcotics production, the opium production in 2013 reached 6,400 tons compared with the previous year’s total of 5,500 tons.  And the scourge is getting worse.

Despite serious American anti-narco efforts of  $7.5 billion since 2001 to stop Afghanistan’s endemic drug trade,  the UN Office on Drugs and Crime (UNDOC) reports near futile progress.

UNODC Director Yury Fedotov warned that Afghanistan’s narcotics problem remains a major global challenge; “The illicit opium economy and related criminality and corruption continue to undermine security, the rule of law, health and development in the region and beyond.”
Besides local warlords involved in narcotics, there’s a direct link to the Taliban Islamic militants opposing the fragile central government in Kabul. 

According to the  UN, “Afghanistan produces some 90 per cent of the world’s illicit opiates. Hilmand province, in the south, remains the country’s major opium cultivating area, followed by Kandahar. “  Helmand province was the site of some of the bloodiest encounters between largely British forces and Taliban fighters. 

UNDOC’s Fedotov stressed that illicit narcotics had a “disastrous” impact on the already embattled country.  The UN agency adds that “Afghanistan suffers one of the world’s highest prevalence rates for opiate use and HIV hepatitis are widespread among injecting drug users. ” More than a million Afghans are drug dependent.

Tragically in Afghanistan, drug trafficking is part of a larger web of government corruption, money laundering and terrorism.  Both the Taliban terrorists  and sectors of the central government are mired in the narcotics trade.   Afghanistan accounts for 90 percent of the global heroin supply.  Thus the drug scourge has serious implications far beyond this South Asian country. 

UNODC  concedes that the Afghanistan is plagued by  “fragmentation, conflict, patronage, corruption and impunity.” Sadly that’s probably an understatement.

Washington’s special inspector for Afghan reconstruction candidly admits that  the “narcotics trade poisons the Afghan financial sector and undermines the Afghan state’s legitimacy by stoking corruption.” 

UNDOC official Jean-Luc Lemahieu is quoted in the Wall St. Journal as saying that he drug trade is roughly equivalent to 20 percent of the country’s gross domestic product! The narcotics industry indirectly employs over 400,000 people, larger than Afghanistan’s armed forces!

Newly elected Afghan president Ashraf Ghani has stressed the importance of anti-drug efforts but as part of expanding alternative agricultural opportunities. In Hilmand where the “food zone” alternative livelihood program ended in 2012, opium cultivation rose again by 13 per cent.  Even with an expansion of legal farming, opium provides six times the income as compared with growing wheat. 

Despite  the considerable American and NATO troop presence, opium poppy production has blossomed in this huge and rugged country.  So what after the Obama Administration’s mandated military pullout  by the end of 2014?  

Ironically Afghanistan’s  traditional tribal quilt of warlords and chiefs may become yet more dependent on revenues from the narcotics interests for funding as other foreign assistance support lessens or ends.   We must change this metric. 

So here’s the short term scenario: By 2015 there will be a strategic residual force of at least 10,000 American troops to help avoid the debacle the Obama Administration drifted into in Iraq earlier this year.  Psychologically a U.S. military presence stiffens Afghan military spirits and bolsters Afghan government resolve. 

But as vital to prevent the rise of a Taliban terrorist takeover in the next few years, both the U.S. and the Kabul government must equally focus on sustained opium eradication programs as to lessen Afghanistan’s global threat as a drug haven and exporter.  

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues.  He is the author of Divided Dynamism the Diplomacy of Separated Nations; Germany, Korea, China (2014).



Have you heard the joke about the crooked accountant? His client asks him what’s two plus two. He get’s up, draws the blinds, sits back down, and replies, “What do you want it to be?” The crooked accountant in Vermont’s story today is Jonathan Gruber. The client is Peter Shumlin.

Jonathan Gruber, for those who missed it, is the MIT healthcare consultant who has been caught half a dozen times on video shooting off his mouth about the “stupidity of the American voter, how “Lack of transparency is a huge political advantage” and, most importantly, how he helped mislead the American people about the true costs and impact Obamacare so that the bill could pass. “Basically that was really really critical for the thing to pass… Look, I wish… we could make it all transparent, but I’d rather have this law than not.” (Watch A Video Montage of Gruber’s Comments)


This flap is of particular concern to Vermonters because Jonathan Gruber is the person the Shumlin Administration hired (at $500/hr.) to vet their $2 billion plus funding plan for Green Mountain Care (single payer healthcare). The plan is supposed to be released to the public in less than two months. Vermonters need and deserve an honest, credible broker to do this job, and Gruber has disqualified himself.

However, Peter Shumlin refuses to fire Gruber.

In an interview with WCAX, Shumlin says, “We are going to continue to have him finish the job that he began, because he’s the one who is really digging into the numbers, he’s our calculator, he’s not doing policy for us, he’s not doing advice for us, he’s really our calculator.”

But this is precisely why Gruber can’t be trusted. He was the “calculator” for the Affordable Care Act. He abused that trust and misled the American people by massaging numbers so as to hide the true cost of the program and make passage politically palatable. Gruber: “This bill [the Affordable Care Act] was written in a tortured way to make sure CBO [Congressional Budget Office] did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies…” He also helped backload the costs so that the bulk of spending would fall outside the CBO’s 10 year horizon.


The president and Democrats were adamant that the Afordable Care Act cost less than $1 trillion. Gruber’s job, like the accountant in the joke, was to make sure it appeared to come in under that number, and he succeeded in gaming the CBO’s formula to get a cost estimate of $940 billion. The bill passed in 2010. Then in March 2012 when the CBO updated its Obamacare cost estimate and Gruber’s accounting tricks had done their job, the cost was revealed to be $1.76 trillion.

Peter Shumlin has promised that if we can’t do single payer for less than the cost of the current system, “we’ll take our marbles and go home.” Is Gruber going to give us an honest assessment of what single payer will cost, or will he cook the books to make sure Shumlin’s marbles don’t go anywhere?

When he said, “I wish… we could make it all transparent, but I’d rather have this law than not,” Jonathan Gruber obliterated his credibility as an impartial actor. We cannot trust him. He cannot be our “calculator.”  And we cannot trust people who defend him.

So please,


Thank you. 
Rob Roper, President of the Ethan Allen Institute


Posted by Chris Campion

Putney’s own Peter Shumlin, still not “officially” governor until a legislature likely votes him in, was recently “humbled” by the close election results.  But apparently not so humbled where he’s actually going to change his tune, according to VT Digger:

“We all know that the two biggest obstacles to prosperity are rising property taxes and rising health care costs that rise faster than our incomes,” Shumlin said. “We need to stem the growth of property taxes and continue to push for affordable quality accessible health care for all Vermonters.”

Shumlin seems to still think it’s OK, though, to grow the state budget at rates that rise faster than Vermonters’ incomes.  We don’t “all know” what the two biggest obstacles are, despite what a humbled Shumlin might say.  Health care costs rise because programs like Medicare and Medicaid do not reimburse at cost, so the shortfall is foisted on the private commercial insurers, that have to raise rates higher than the rate of inflation to cover existing federal “single-payer” shortfalls.  Vermont’s aging demographic worsens this trend, as the percentage of total Vermonters on Medicare and Medicaid go up, the cost-shift is put on a smaller and smaller number of people working who are covered under commercial insurers.

The biggest obstacle is not the fact that property taxes rise – they are rising because the budgets go up, local and state, and the money for education has to from somewhere.  Since we’ve hitched our wagon to the property tax star – and eventually had to change that to react to the reality that property values do not correlate positively with income levels – the would-be Governor is arguing to scrap the state’s property tax system that funds education, whether he realizes this or not.

Worse, Shumlin does not seem to think that the near-smackdown he received on election day wasn’t a vote against his own policies.  From the Rutland Herald:

The governor won’t change what he believes in, according to those close to him, but will look to make stylistic changes and do a better job of explaining to the public why he is pursuing certain policies.

He’s been explaining why he’s pursuing these policies for years now.  Making more noise about them is the solution?  Doubling down on a losing hand does not sound like the choices a rational man makes.

What Shumlin seems to be missing is that Vermont’s economy is failing, slowly, and has been for some time.  There are only two reason the doors stay open for the business that is the State of Vermont:

1.  35% of the state’s budget is federally funded – this is the governor’s recommended budget, by the way:

Aren't wish lists for kids?

2.  65% of all personal income taxes collected in Vermont come from households earning $100K+ in income (as of 2012) – a number that goes up every year (tax stats courtesy of the State of Vermont):

Numbers That Only A Bernie Could Love

It’s becoming increasingly clear that from a personal income standpoint, the entire state budget is hugely dependent on a tiny number of Vermonters.  They shoulder the increasing burden of being the biggest tax revenue component of the General Fund, the state’s 2nd-largest fund component of the budget, behind the Federal funds and in front of the Education fund.  In fact, of the 312,505 returns filed in 2012, the 100K+ households constituted 12.5% of that number – that’s 12.5% of households coughing up 65% of all net personal income taxes collected.

If more jobs were available – and not the kinds of jobs that the state is forecasting Vermonters can look forward to, like cashier and retail gigs (the biggest “growth” sectors in the state’s own labor forecast) – then you’d have fewer Vermonters struggling with property taxes and health care costs.  Low unemployment numbers does not equal job growth.  Low unemployment does not mean rising incomes, and it certainly doesn’t mean incomes rising faster than the rate of the state’s budget growth.

The state’s tax revenue structure is built upside down.  Vermont is far too reliant on a very small number of households to fund the state budget, and if incomes drop in this small demographic, the state’s budget goes into the tank – which is what seems to be happening right now.

So:  How are we going to pay for single-payer in Vermont, when we can’t pay for our budget now, without it?

{ 1 comment }

Posted by Chris Campion

Vermont’s tax revenues are unexpectedly drying up, according to Jeb Spaulding, Shumlin’s Secretary of Administration.  From the Vtdigger article:

Financial forecasts predicted more than $115 million would flow into the state’s General Fund during the peak leaf-peeping month. So-called consumption taxes — sales and use, meals and rooms — cleared their targets. But personal income tax receipts fell short by more than $7 million, or 11 percent.

It’s a good idea to think of budgets as a target – you try to hit what you’re aiming at.  In other words, if you’re off a little bit, that might not be a big deal.  But if there’s a major component of your targeted revenues falling short by over 10%, then that’s a miss.  Ask your mortgage company if they’re ok with you “missing” the full payment this month by 10% and see what their reaction is like.

What’s interesting is the revenue component that’s missing its target – personal income tax receipts.  Why?  How can receipts be underperforming when Vermont’s economy – according to Peter Shumlin, anyway – is a juggernaut, featuring low unemployment and boundless opportunity for those who might be involved in an E5-B project or, if you’re extremely lucky, you’re the state’s largest private employer and you’re able to wrangle out a few ducats from the state on your way out the door.

But revenues are off in the form of personal income.  Shumlin’s 2015 budget was based, in large part, on projections of revenue growth from FY2013 data, in July of 2013.  Fy2013 hadn’t yet closed, FY2014 hadn’t started yet, but those FY13 numbers were used in Shumlin’s Fy2015 budget – the budget year we are now facing shortfalls in.

What did Shumlin’s own FY2015 budget recommendations show for YOY growth in the General Fund revenues, through FY2013?  A 1.9% average YOY growth rate (FY2009A through FY14F).

Hey, we've had some tough years here - so let's double our expectations!

Hey, we’ve had some tough years here – so let’s double our expectations!

What did he propose in the FY2015 budget, for an increase in general fund spending?  3.56%, which he describes as “restrained”.

If you ignore prior history, this seems reasonable - which is kind of a big "if".

If you ignore prior history, this seems reasonable – which is kind of a big “if”.

In fact, if you look at the revenue projections from Shumlin’s budget, not just for the General Fund but for other funds, it’s a snapshot of irrational exuberance writ large:

Usually rosy forecasts are actually rose-colored, chief.

Usually rosy forecasts are actually rose-colored, chief.

Even allowing for the recession’s effects on general fund revenue receipts, casually tossing aside the most recent history and projecting rosy growth estimates does not comport with the realities of Vermont’s economy.  Diminishing median household income, middling to awful rankings for business climate, a low unemployment number relying heavily on an extremely low labor force participation rate, and the state’s own workforce projections showing the bulk of job growth at the low end of the salary spectrum, well, that forecast of revenue grow seems to be based much more on wishful thinking than on real, quantifiable data.

The actual performance of the fund, and its YOY increases, coupled with the rescission work that had to be done one month after the FY15 state budget waspassed, seems to indicate that the 2013 

A good thing the Fed can print money, or we'd be in big trouble.

forecasts were wildly optimistic.  If you’re trudging back to the statehouse to fix the budget you just spent months finalizing, that means your core assumptions are flawed.  The core assumptions, for the biggest revenue component the state has (excluding federal funds, which make up almost 35% of the budget’s revenues – a fact that should startle anyone who thinks Vermont’s budget is solid), will have to be revisited.

Oh.   And the state’s unfunded liabilities, the fact that the cost for Vermont’s version of single-payer will range into the $2 billion dollar realm, and the state’s (formerly) largest employer had to pay another company $1.5 billion dollars to take its “asset” off its hands does not seem to paint a rosy growth picture ahead, no matter what color the glasses Shumlin’s wearing while he’s crunching the budget numbers.



by Rob Roper 

I’ll cut right to the point: Jonathn Gruber, the guy Vermont taxpayers are giving $400,000 to vet the single payer financing plan set to be unveiled (finally!!) in January is on the record multiple times saying that he helped orchestrate a fraud in regard to passage of the Affordable Care Act.

It’s all over the internet. It’s all over the national news. Does anybody in the Vermont media (besides Bruce Parker of VT Watchdog) care? Because I can’t find a single story in this state besides Parker’s even commenting on the issue.

Former Vermont Governor Howard Dean commented on Gruber’s videos in the national media saying, “The core problem under the damn law [ACA] is it was put together by a bunch of elitists who don’t fundamentally understand the American people.” (Video). You’d think that connection would at least get the Vermont media’s attention. Nope. Nuthin’.

Here’s why this is a major Vermont story, and it’s not because some arrogant, Ivy League, elitist shot off his mouth about how stupid voters are. That’s entertaining enough, but it’s not the substance of the story. It’s a major story because Gruber said,

“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO [Congressional Budget Office] scored the mandate as taxes, the bill dies…. If you had a law which said that healthy people are going to pay in – you made explicit healthy people pay in and sick people get money, it would not have passed… Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.” [Emphasis added]

Translation: I lied to see a bill I wanted passed pass.

And this guy is vetting our single payer financing plan?! The definition of “vetting” is “to subject somebody or something to a careful examination or scrutiny, especially when this involves determining suitability for something.” This means that whoever is doing the vetting needs to have the highest degree of credibility. Gruber now has ZERO credibility.

So, when Peter Shumlin comes out some time in January and says we have a financing plan for the $2 billion we need to raise to pay for single payer healthcare and by gosh it works! — will this be the truth, or the fraudulent statement of a guy who’d rather see single payer move forward than not?

This is not acceptable.

Nor is it acceptable that Vermont’s media is ignoring the question. Perhaps they share Gruber’s sentiment. They’d rather have single payer than tell the truth about it, and believe Vermonters are too stupid to figure things out on our own.

Bruce Parker interviewed Senator Claire Ayer, chair of the Senate Health Care Committee about Gruber’s comments: “’I’m sorry that he said that. He certainly doesn’t speak for the Vermont Legislature,’ [Ayer] said. However, Ayer stopped short of calling for Gruber to be fired, saying his job is to provide important data to the Legislature. ‘We didn’t hire him to do public relations — we hired him to give us data. He’s a very highly nationally respected economist who specializes in the health care field. … I’m sure he knows by now we don’t expect him to ever say things like that again in a public setting.’”

Highly respected? Well, not so much anymore. And, quite frankly, if all Senator Ayer is upset about is what Gruber said — and only the fact that he said it publicly! — she’s just as bad as he is. To quote Howard Dean again, “The problem is not that he said it, the problem is that he thinks it.” It’s what he did. He lied to the American people to pass a bill he knew we would otherwise have opposed. That is what’s so heinously offensive.

The question Vermonters need to ask now is if they think Jonathan Gruber, an affirmed single payer healthcare zealot, would lie to us stupid Vermont voters about the workability of a $2 billion financing plan because he’d “rather have a law than not.” Personally, I think he would.

– Rob Roper is president of the Ethan Allen Institute (


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