Even with a tax revenue shortfall discussed by Art Woolf several months ago, Vermont has still managed to collect more taxes per capita than any other state in the region. The Census Bureau recently released its quarterly report for April, May and June of this year. Using the last 4 quarterly reports dating back to July of 2016, we deduced that Vermonters paid a little over $3 billion in taxes from July 2016 to June 2017. New Hampshire collected $2.5 billion. This is startling considering that New Hampshire has a little more than double Vermont’s population. If Vermonters are paying twice the total amount of taxes that New Hampshirites are paying, are we really getting double the public services? That’s doubtful.

The other states in the region collect more revenue than Vermont, but then again, all of the other states in the region have larger populations, with more incomes, to pull from. Putting these numbers in per-capita terms helps to draw meaningful conclusions.

The least taxed state of New Hampshire collected $1,825/capita, which is $1,257 less per capita than the next closest state of Rhode Island. Rhode Island and Maine make up the next tier of taxation in the $3000 taxes/capita range. Mass., New York, and Conn., gravitated toward the $4000 tax/capita mark. Finally, Vermont exacted a whopping $5000 in taxes per capita. The gap between New Hampshire and Vermont is enormous: Vermont exacted 2.75 times more per capita in taxes than New Hampshire did since June 2016. Vermont certainly has a long way to go if it wants to escape from our position as the most heavily taxed state in the region.


Taxes per Capita


by Frank Mazur

There is a push for consumerism to address our high health care costs.  Given the freedom to choose health options consumers will be more cost conscious when seeing a doctor or going to a hospital.  It’s part of President Trump’s health care reform efforts.

Most states are stifling consumerism though their certificate-of- need (CON) laws.  Vermont, which is the country’s leader in CON laws, has imposed 30 laws on health providers.  Florida, which is allegedly a consumer orientated state, has 17 laws including hospital and nursing home bed allocations.

There are several respective CON studies that conclude CON laws are protectionistic, anti-competitive, and stifle innovation.  They rely on central planning and are a hidden tax on health care consumers.

When a state representative was a few years ago asked why the CON can’t be eliminated his response was “there are powerful lobbies in the State House that are protecting health industry interests.”  This focus restricts entry, expansion and competition.

Lawrence Brown, in the Journal Health, Politics, Law” says there is no evidence the CON reduces costs.  The late Senator Ted Kennedy said the CON process fosters anti-competitive behavior.  The CON process is antiquated and the Federal Trade Commission has asked states to abandon it.

CON resource allocations by government bureaucrats can’t replace private decisions by health care entrepreneurs nor can they lead to better outcomes, less costly and timelier delivery of services to consumers.  The impersonal hand of government can never replace individuals’ freedom of choice.

- Frank Mazur is a former state representative from South Burlington, a former member of the EAI board of directors, and a former member of the Public Oversight Commission, which was responsible for overseeing the Certificate of Needs process in Vermont. 

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By Rob Roper

A recent examination of the Florida Tax Credit Scholarship program by Dr. Matt Chingos of the Urban Institute concluded that giving low income students access to vouchers that allow them to attend private schools increases the likelihood that they will attend a public college* and graduate.

*(Note: the study only examined enrollment at public colleges in Florida, and did not look at enrollment at out-of-state, private nonprofit, and for-profit colleges.)

The Florida program allows an income tax credit to corporations that contribute money to nonprofit Scholarship-Funding Organizations (SFOs), which in turn award scholarships to students from low-income families, those eligible for free or reduced lunch or from households making less than 185 percent of the federal poverty level.

The study concludes: “Participation in the FTC program increases college enrollment rates by 6 percentage points, or about 15 percent. Almost all of this effect occurs in community colleges.”

However, examination of a sub-group within the overall study notes, “…but for students who entered FTC in elementary or middle school, there is a positive impact on four-year college enrollment of 0.9 percentage points (15 percent) after three years of participation and 1.5 percentage points (25 percent) after four or more years.” In other words the longer these low-income students had access to private school options, the more profound and positive the impact was on their college participation.

Vermont’s state college system should take notice. We have a tuitioning system in much of Vermont that allows every student, most importantly low income students, to attend independent schools. The State Board of Education and some legislators are hell-bent on curtailing or eliminating the scope of the program, its effectiveness, or both. This could, if the Urban Institute study is correct, negatively impact future enrolment in state colleges, which are already facing enrolment challenges.

Taxpayers should also take note. The Florida Legislature’s Office of Program Policy Analysis and Government Accountability estimated that the program saved Florida taxpayers $36.2 million in 2008–09, or about $1,700 per scholarship.

Rather than scheming to eliminate Vermont’s tuitioning system, the legislature ought to be working to expand it to all Vermont children. Perhaps folks within the state college system will see the benefit of pushing this policy direction in the future.

Rob Roper is president of the Ethan Allen Institute.

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By David Flemming

UVM economist Art Woolf has a must-read piece in the Burlington Free Press titled, “Vermont’s record on health care spending deflates confidence.” In it he notes, “Over the last two decades Vermont went from being a low health-care cost state with a small percentage of uninsured to one of the highest spending states.” Certificate of Need laws as exemplified by The Green Mountain Care Board vs. Copley Hospital is a good example of why that is.

According to patients, Copley Hospital in Morrisville, Vermont, is a model of quality healthcare. When the GMCB issued a Certificate of Need (CON) to Copley Hospital for replacing its surgical center in February 2016, it did so expecting that there would not be “any appreciable change in projected surgical volumes.” Copley had been completing around 1,800 surgeries annually. In the past few months, however, Copley has begun “taking in more money from the surgical center than was originally approved as part of the CON process” because of an increase in surgeries. This money has nothing to do with price increases, since Copley is “one of just three hospitals in the state… that did not propose to increase prices in the upcoming year.” Rather, there has been an increase in demand for Copley’s services through “word of mouth.”

That Copley is efficiently meeting a pretty clear “need”, providing superior service at lower price, is irrelevant to state regulators. What matters to the Green Mountain Care Board (GMCB) is that Copley is taking in more revenue than expected, in violation of their bureaucratic spread sheet. And, taking business away from the Crown Jewel of bureaucratic design, UVM Medical Center. This cannot be allowed to stand!

In an era of ever increasing healthcare costs in Vermont, it would seem like a foregone conclusion that GMCB would ask Copley how they are increasing their surgery services with the same resources, so that they can advise other hospitals to do the same. Art Mathisen, CEO and President of Copley Hospital remarked “we’re not hiring any orthopedic surgeons. Rather, Copley is completing more surgeries with the same staff.

Shockingly (or, actually, not so shockingly), instead of praise, Copley has received condemnation from the GMCB, and the GMCB is currently considering whether to rescind the CON approval for Copley’s new construction.

Dr. Allan Ramsay, a former GMCB member, claims that Copley Hospital is not equipped to handle complex surgeries. “That’s not a trend that we want to see in a smaller community hospital… it does generate revenue, but there are other surgical facilities that are better suited to do complex surgical cases.” Translation: We want UVM Medical Center to get that money regardless of what patients want.

Maureen Usifer, a current GMCB member, says that “when I talk to anyone in the Burlington area, anyone who gets a surgery goes to Copley.” Her comment is intriguing: Vermont’s largest hospital, the University of Vermont Medical Center is in Burlington, and has long been seen as the standard in Vermont healthcare. Not only are patients in the surrounding area flocking to Copley for surgery, patients from outside the area are as well. The patients have voted with their pocketbooks to undergo surgery at Copley. Now, the Green Mountain Care Board is attempting to overrule their decisions because it deems certain medical facilities as “better suited” than the ones patients frequent.

The Certificate of Need process is an antiquated-old relic of a failed federal policy. The Federal Trade Commission has implored states to abandon it – as most states have — because it “pose(s) serious anticompetitive risks that usually outweigh their purported economic benefits.” The best way for the Green Mountain Care Board to show leadership in healthcare innovation is to call for the legislature to repeal Certificate of Need, which would remove the temptation to micromanage hospitals like Copley that are already leading the way in healthcare.


by John McClaughry

Do you think climate change is just a harmless obsession among certain weird people? Well, read this from True North reports’ Michael Bastasch.

“The U.N. issued a report in May encouraging activists to use the courts to circumvent legislatures and company board rooms to push global warming policies. Fast forward five months, and some local governments have taken the recommendation to heart.

“The global warming industry is increasingly turning to the courts to impose their agenda for the simple reason that it has failed through the proper democratic process,” said Chris Horner, an attorney and senior fellow at the libertarian Competitive Enterprise Institute .

Most recently, California local governments have filed suit against dozens of energy companies for damages allegedly caused by man-made global warming. That’s on top of a slew of lawsuits brought by environmental activists and Democratic state attorneys general.

San Francisco and Oakland filed suit against five oil companies looking for billions of dollars to pay for infrastructure upgrades they say are necessary because of global warming. Chevron and other oil companies named in the suit are partly responsible for rising sea levels, the cities argue.

In July, one California city and two counties filed suit against 37 energy companies they blame for global warming, including ExxonMobil and Royal Dutch Shell.

This is a really farfetched and shameful attempt at legal extortion, but some courts may let plaintiffs get away with it.

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


by John McClaughry

John McClaughry“Free electricity from the sun” has been a dream for decades. Although solar photovoltaic cells have been used for 40 years in spacecraft, the growth of the solar PV industry began around 1990, spurred by concerns about global warming from fossil fuel combustion.

“Clean, green” solar PV electricity can charge radios and cell phone batteries, but it’s challenged by powering a refrigerator or home freezer. That’s because sunlight is diffuse and intermittent.

“Diffuse” means that the amount of direct sunlight that falls on a PV cell, even in a cloudless desert, is pretty weak. Overcoming the “diffuse” problem requires lots of collector area – full roof coverage for a home, or acres of solar panels for supporting the power grid.

“Intermittent” means that most solar PV electricity is produced during six or eight hours of a cloudless day, and almost none with heavy overcast. The “intermittent” problem for a home or neighborhood system can be solved (at considerable cost) by battery storage, but solar PV can’t realistically power the grid. It can only augment baseload power generated by hydro, nuclear, geothermal, tidal, biomass or fossil fuels like coal, oil or natural gas.

Beyond the political rhetoric about stopping climate change, the driver for solar PV deployment is profit. And the fact is that, except for remote and unique locations, there would be precious little if any profit in solar PV were it not for the cornucopia of special benefits offered by the federal and state tax and regulatory laws.

The big hitter is the 2005 solar investment tax credit of 30 percent of installed cost, used to offset the solar company’s income tax liability. When this credit was slated to expire at the end of 2016, the solar industry went into overdrive to postpone the deadline. It won a six-year phase-out, ending in 2022.

Vermont offers a parallel tax credit at 24 percent of the federal rate, plus exemption of solar equipment from the sales tax and from the education property tax.

There are two major solar PV models. One is the large-scale solar farm. The other is the homestead “rooftop” or backyard system. The profit driver is net metering.

This is a special deal where the solar installation inverts the DC electricity from the panels and runs it back through the utility meter, reducing the electric bill. The subsidy occurs when the homeowner is credited not at the wholesale generation price, but at the maybe 40 percent higher retail price. The net metering customer thus pays little or nothing toward the costs of maintaining the utility’s transmission and distribution systems, or its management. The other “ordinary” customers have to pay for that.

A common solar industry deal is structured as a limited partnership. The partnership installs and owns the solar panels, claims the tax credit, sells the renewable energy credits, and routes the generous depreciation deductions to the partnership’s high income tax shelter-seeking partners.

The homeowner enjoys net metering for a specified number of years, which under some circumstances can result in zero-cost electricity. When the partnership has pocketed the upfront tax credit and the declining depreciation for (typically) five years, the homeowner can buy the system for a nominal price, and own and maintain it thereafter.

How important is net metering? The New York Times (July 26, 2013) quoted the executive director of the advocacy group Vote Solar as saying, “Net metering right now is the only way for customers to get value for their rooftop solar systems.” That is to say, unless taxpayers and other ratepayers can be made to cover the subsidies, homestead solar installation will be attractive only to those who are willing to spend their own money to display green energy virtue.

The price of solar PV panels has dropped gratifyingly over the past decade. But last month the International Trade Commission found that solar panels are being “imported in such increased quantities as to be a substantial cause of serious injury to the domestic industry.” The two plaintiff companies, one bankrupt and one insolvent, are urging President Donald Trump to impose a big tariff on imported panels, mainly from China.

News of the petition caused a rush by speculators to stockpile panels before the price shoots up. A significantly higher price for panels, along with the disappearance of the investment tax credit in 2022, will dramatically change the economics of net metering deals, meaning that the solar boom may well peter out, except in off-grid locations. This would also seriously undercut Vermont’s (actually Peter Shumlin’s) Comprehensive Energy Plan, which declares that 90 percent of all Vermont energy must come from renewables by 2050 (or else what?).

That’s the risk solar PV entrepreneurs may be facing. If the higher price of panels and the declining investment tax credit undercut the viability of their business plans, expect the next phase: an urgent appeal for a taxpayer bailout for solar installers, to counter the government tariff bailout of the solar panel makers.

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


by David Flemming 

For much of the Minimum Wage Study Committee’s meeting on Oct. 2  proponents of the $15 minimum wage happily downplayed the likely increase in lost jobs and rise in prices that would come as a result of the hike. This is why it was so refreshing to hear one proponent of the $15 minimum, Dr. Beth Ann Maier (VT Chapter of American Academy of Pediatrics) admit that “raising the minimum wage may cause prices to rise (and) maybe some job hours would be lost.”

But, with this admission, we’re left to wonder why then Dr. Maier supports the $15 minimum. She tries to explain: “…but maybe many of those lost hours would be the extra hours that workers are spending away from their families just to stay in the same place.” And now we know why Maier is a doctor and not an economist.

Unfortunately, a higher minimum wage will give some parents a LOT more time with their families — because they will be unemployed.

Much of Maier’s rationale hinges on the theory that Vermont employers will evenly distribute the reduction in hours across the workforce, and pay every low-income worker more for every hour worked. In the real world, this is not the case. If a $15 minimum is implemented, the most productive workers might work less and be paid more per hour worked, but the least productive workers will be let go entirely. Vermont’s Joint Fiscal Office (JFO) estimates that Vermont’s economy will have 2,830 fewer jobs by 2028 if Vermont enacts a $15 minimum wage, while the Heritage Foundation estimates that Vermont could lose as many as 11,000 jobs.

Though it’s nice to think that parents with less hours to work (or no hours to work) would use the opportunity to spend more quality time with their kids, it is more likely that the resulting un- and under employment a minimum wage hike would usher in would hurt rather than help Vermont children. A 2010 Boston University study analyzing data from 1990-2008 concluded “each one percent increase in unemployment rate correlated with an increase in the number of child maltreatment reports one year later.” They further note, “We’ve observed over the last couple of years just a real level of stress in a large portion of our families, and when we engaged them in conversation quite often it starts off with one of them [losing] their jobs.”

Sadly, raising the minimum wage and decreasing employment would risk creating more frustrated and unemployed parents who might take their anger out on their children.

No doubt there is something to be said for parents who work long hours needing to spend more quality time with children. But given that the alternative is unemployment, and potential child abuse, legislators have another reason to renounce a $15 minimum wage.

David Flemming is a policy analyst for the Ethan Allen Institute. 

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by Rob Roper

A recent Op-Ed by Sabrina Melendez, a self-described climate activist and student at Bennington download-8College, leaves one’s mouth agape, wondering if the author actually expects anyone to buy what she’s saying about the Carbon Tax, or if she even buys this baloney herself.

This remarkable piece starts off, “Imagine getting a $500 check in the mail once a year…. To top it off, imagine that merely receiving this $500 check is in some way helping to reduce the worst effects of climate change, creating a better future for generations to come. This is what is means to put a price on carbon.”

Folks, this is what it means to run a scam. Put it up there with the email you got from the guy in Uganda who wants to wire you lottery winnings. Just hand over your bank account number! Support the Carbon Tax, and get free money! The lie here is in that even in the best case scenario the $500 check Melendez imagines would be significantly less than the amount paid in Carbon Taxes. More accurately, imagine giving the government $500 in taxes and getting back $450 (90%) minus an undetermined amount of processing fees. And, not for nothing, the state reserves the right to keep more or all of that money depending upon its own priorities. Ready to sign up now?

Nor would this policy in little old Vermont have ANY impact on global climate trends, let alone “reduce the worst effects.” Late night commercials on cable TV for miracle weight loss pills are more honest than this!

She admits, “We used to call it a carbon tax, until we realized that it gave individuals the impression that they would be taxed for their carbon emissions.” It gives the impression because that’s exactly what an excise tax – which is what the proposed Carbon Tax is — does! Do smokers not pay the excise tax on cigarettes? I guess we should at least thank Ms. Melendez for admitting that she and her fellow Carbon Tax advocates have made a conscious decision to be dishonest and deceptive about what it is they are proposing.

Melendez also has the stones to say, with a straight face, “Unlike climate activists.., the billionaire CEOs of ExxonMobil and Shell are not concerned with the disproportionate burden that raising gas prices would have on low- and middle-income Vermonters,” when it’s the climate activists themselves who are the ones calling for this massive increased price in gas, etc! It is they who would be the cause of the disproportionate burden that would (thanks again for being honest on this point) hammer the middle class. And, no, they don’t care.

In fact, they celebrate the negative impact because it would force middle class, and every class, Vermonters to not buy fossil fuels. That’s their point! If you don’t feel acute pain, you won’t change your behavior, so, you will be made to feel acute pain. Hooray!

Seriously, take a moment to read this article. It’s both scary and amusing. I can’t believe this young, educated woman thinks such nonsense can possibly be persuasive or even helpful to her cause. She has either been brainwashed to the point where she’s not thinking about what she’s saying, or thinks that the rest of us are incredibly stupid.

- Rob Roper is president of the Ethan Allen Institute.  


by John McClaughry

Here’s the latest on the green campaign to punish ExxonMobil, for not having been a champion of green climate change solutions for the past thirty years. A bunch of  environmental activist groups, led by the Conservation Law Foundation (CLF), sued ExxonMobil for allegedly failing to sufficiently prepare a facility in Everett, Massachusetts, for the effects of climate change, including sea-level rise and more frequent and severe storms.

Well, hey, it’s Exxon Mobil’s facility, but that doesn’t deter enviro groups from suing anybody they want to cripple or extort.

On September 12 U.S. District Court Judge Mark Wolf partially granted ExxonMobil’s motion to dismiss CLF’s case, ruling that CLF was unnecessarily injecting climate change into its complaint, to the detriment of its own argument. Wolf says the case is about whether ExxonMobil violated the terms of a Clean Water Act permit from the U.S. Environmental Protection Agency, ordering CLF to refile its complaint with all references to climate change removed.

Wolf’s order made it clear for CLF’s claims to move forward, the organization needed to show ExxonMobil had either caused harm to the plaintiffs,  or that harm was “imminent,” and references to the projected effects of climate change by 2050 or 2100 wouldn’t qualify as such. If the plaintiffs were concerned about the effects of climate change on the facility in 2050, Wolf said, “they should refile their case in 2045.”

All I can say is, Hurray for Judge Wolf.

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

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by John McClaughry 

One certain result of the horrific Las Vegas massacre will be the revival of the cry to somehow control the firearms used by the shooter. And once again, this will show how difficult it is to control crazy people by putting the government in charge of their lethal guns, poisons or explosives.

Suppose one takes the position that the government should proscribe and confiscate all privately owned firearms. That would theoretically stop all firearm related crime, but only after the coast to coast civil war was suppressed.

The gun control advocates thus fall back on Obama’s prescription that we – the government – need to keep firearms out of the hands of people who oughtn’t have them. Convicted felons are already banned from possessing firearms, and also persons involuntarily committed at some point in their lives to mental institutions. But beyond that, the government has to sort out the rest of us to identify the real or potential nut jobs. Ponder the enormity of that task.

The 64-year old Las Vegas shooter provides a special illustration of the problem. Apparently he had no criminal record, no allegiance to Hitler or ISIS, no personal revenge motive, no grievance against the world, no mental health history, no questionable associates, not anything that might suggest he would go haywire and spray a concert crowd with hundreds of rounds of ammunition.

So what test would this shooter flunk to be denied possession of a firearm?

- John McClaughry is vice president of the Ethan Allen Institute


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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

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