(12/04/06) You don’t need a Next Generation Commission to tell you there’s a direct link between taxes, a growing economy and keeping young workers in Vermont. Training programs, loan forgiveness programs and lower college tuitions help but if high taxes persist in Vermont, our economy will continue to suffer and our youth exodus will persist.

The Tax Foundation ranks Vermont 46th out of 50 in state tax competitiveness. To become competitive our tax burden needs to be reduced and only then will our economy improve, employment opportunities increase and our youth will be able to stay here and sustain our quality of life.

Today, the major economic drivers in our economy are government, health care, and education. These aren’t wealth creation industries; their lifeline is directly tied to government.

The total cost of state government in Vermont exceeded $4 billion in FY06 and if current trends continue it will exceed $6.5 billion in 2012. The current level of spending is growing 3 times the rate of our inflation and population growth. On a per capita basis, Vermont’s state expenditures rose 55 percent, from $4,400 in FY 01 to approximately $6,800 in FY 06 compared to the inflation rate of 16 percent.

If the spending were limited to the combined rate of inflation and population growth between FY01 and FY06, the amount each Vermonter paid for state government would be $1,700 less per person. That’s a savings of $6,800 per family of four.

Other states have recognized that tax climate attracts and/or retains a good work force. Its impact is immediate, whereas increased funding for job training, infrastructure improvement, loan forgiveness programs and New Generation Commissions can take years to have any effect.

The facts are clear. To achieve economic independence Vermont must change its taxing policy and curb its spending appetite. Our state coffers are filled to the brim right now and should provide an opportunity to improve our competitiveness for decades to come.

Frank Mazur
South Burlington

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Frank Mazur, a small business owner and former state representative, is chair of the advisory board of Vermont FreedomWorks.