This commentary is by Will Patten of Hinesburg, a retired business executive and author of the forthcoming book, “Rescuing Capitalism.”
It was, in a way, a remarkable moment when Vermont homeowners opened their tax bill this year. Whether conservative or liberal, living in Essex or Chittenden counties, in a mobile home or mansion, I suspect there was unanimity of shock and dismay at the increase in property taxes, in many cases in the double digits. Annual real estate taxes in some cases now exceed mortgage payments.
We fund our education system with a complicated statewide property tax, and in March of this year nearly a third of Vermont school districts voted down proposed budgets, attempting to head off the inevitable that came in the mail last month.
Our governor did what he does best, articulating and complaining about the problem. Our legislators did what they do best, agree to study the problem. Solutions, you see, are elusive. And when we find them, they’re going to be draconian. So, no hurry. Like losing weight (eat less, move more), the solution will require raising taxes and reducing spending — a politician’s nightmare.
America’s democratic capitalism has been a tremendous success. Our democracy has survived 235 years since George Washington was elected in 1789. Our capitalist economy has produced unprecedented prosperity that is the envy of the world. It is a brilliant system built upon a natural conflict between public and private interests.
Vermont has navigated that conflict better than most states. We have regulated private interests that would have threatened our natural resources and we have invested in human resources with relatively high tax collections. And now we are forced to resolve that conflict anew.
During our country’s four-decade long experiment with supply-side economics, the government was assigned the role of aiding and abetting corporate profits. And so, Vermont spent taxpayer money to lure tourists to the state, to subsidize the dairy industry, to give tax breaks to companies who promised to create jobs and many other expenditures aimed at growing Vermont’s economy instead of growing healthy Vermonters. Our health care system is now “corporatized” through mergers and acquisitions and public tax dollars now fund private schools.
It is ironic that we can’t raise taxes because we pay so much for health care and child care (real estate taxes). But the Legislature already has good guidance for restructuring our tax burden. Two “blue ribbon” commissions offered well-considered recommendations in 2011 and 2021 to spread our tax burden across a broader base so that some new revenue could be generated.
But we certainly will have to reduce spending and here is my guidance for doing that: In a democratic capitalist society like ours, the first obligation of government is to nurture and protect the well-being of the people, not corporations. Simply put, the highest and best use of tax revenues is investment in health care and education. Not because they are human rights but because a healthy and educated population is the foundation of a vibrant and competitive economy.
Let’s remember that IBM moved to Vermont because it valued our sense of community. As mayor, Bernie Sanders sparked economic vitality in Burlington by investing in people-friendly infrastructure and community organizing. And when Dealer.com was lured to Riverside California with sweet tax and real estate incentives, they chose to stay in Burlington because of its lifestyle. When international conglomerates buy up iconic Vermont brands they choose to keep them right here.
The big increase in property taxes has ignited a political firestorm. Angry homeowners are looking for retribution. I hope our state leaders can redirect that passion toward the need to reimagine our education and health care systems and keep them as the number one budget priority. Our economy depends on it.
Read the story on VTDigger here: Will Patten: Investments in health care and education make our economy competitive.