VBR & EPR Release 4Q17 and 1Q18 Business Conditions Survey and Index

Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q4 2017 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index.

Overall Finding
The latest survey, which was conducted during January of 2018, achieved a response rate of 69 percent overall and included a 50 percent or greater response rate from 13 of 14 represented sectors within the membership.  Survey results show that:

  • A supermajority of respondents (69%) shared negative outlooks specifically with ease of hiring for available positions, a decline from the previous survey (63%);
  • Slightly more than 40 percent of responses to the question about the state’s overall business climate outlook were neutral (42%), an improvement from the previous survey (63%).  The remaining responses saw a doubling of positive responses this quarter compared to last (38% vs 19%), and also a slight uptick in negative responses (20% vs 18%).
  • The information sector again had the most optimistic outlook on the general business climate (100% optimistic), while the education sector again had the least optimistic, but improving outlook (50% pessimistic, 25% neutral, 25% optimistic).  This is the third quarter in a row that the information sector led in optimism about the general business climate.

Continue reading “VBR & EPR Release 4Q17 and 1Q18 Business Conditions Survey and Index”

David Coates – More Bad Pension News for Vermonters [2.8.18]

by David Coates, Managing Partner, KPMG (Retired) and member, Vermont Business Roundtable

More bad news has arrived for Vermonters, and especially Vermont taxpayers, with the release of the State Actuary’s 6/20/2017 Reports. The reports cover Pension and Retiree Health Care Benefits (OPEB) for State Workers and Teachers, and results are, frankly, quite startling.

The 2017 reports show that Vermont’s combined unfunded liability has increased by over $900 million (over 25%) in just one year. So as of June 30, 2017 our unfunded liabilities stand at $4.5 billion, an amount that is now three (3) times our General Fund revenues and seven (7) times our bonded indebtedness.

In other words, this is the biggest liability the state owes, is more than all of our other liabilities combined, and overwhelms the state’s balance sheet.

This large increase only compounds the problem we already had in paying for these generous benefit programs. Keep in mind that the state is not making any of the annual required payments on the OPEB.  For 2017, the unpaid amount for OPEB was $85 million…yes, $85 million…a 57 percent increase over 2016. These payments do swing from year to year by several million dollars due to a combination of factors; for example, the unpaid amount in 2016 was $54 million. It is also important to note that these liabilities would have been over a billion dollars more were it not for changes already made by the Treasurer.

The state has made the annual required pension payments for several years how and, in 2017, that payment was $137 million. The annual required payment for 2019 is $177 million, an increase of $40 million or 29 percent in just two years. (These amounts are taken from the Actuary’s Report.)

We must ask the hard question: What programs will be cut or taxes raised, to cover this gigantic increase given that revenues are projected to only increase around 3.5%?  Put another way, in 2008 the pension payment was 2.25% of revenues, in 2012 6.4%, in 2017 9.4% and in 2019 it will increase to 11.5%. And keep in mind, as mentioned earlier, the state is not paying anything against the 2017 OPEB obligation of $85 million.

To compound matters, another problem is likely to occur soon, which relates to the assumption used by the state for the return on the pension investments. In 2016, the assumption was 7.95% and in 2017 it was lowered to 7.50%. This assumption is still high compared to other states who are moving their rates to 7% and lower. For example, if our rate were lowered to 6.5%, a more reasonable assumption, it would have the effect of increasing our unfunded liability by $600 million. This would result in increased annual required pension payments in the millions of dollars … putting additional pressure on our revenues.

Failure by the state to make these pension payments would likely result in Vermont losing its coveted Triple A rating. That result would increase the state’s borrowing costs and those of other state-related agencies such as VHFA, VSAC, VMBB and VEDA who rely on the state’s rating when issuing their bonds…costing taxpayers additional millions of dollars.

Having said all this, there is some more promising news to report. The Administration and the Treasurer have reached an agreement to have a “stress test” performed on the pension and OPEB systems.  My understanding is this will include testing how the systems will perform under different market and volatility conditions. Importantly, it will also address affordability, which is critical as to whether or not the systems are sustainable.

At the end of the day, does anyone think our state can possibly meet these obligations?  I doubt even those legislators supported by the labor unions can believe this, given the preponderance and magnitude of this factual information.  Without strong leadership to change our structural problems inherent in these pension and OPEB programs, our state is headed for a financial tsunami!

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Business Roundtable Elects New Leadership for 2018 [1.12.18]

At its 31st Annual Membership Meeting held at Stoweflake Mountain Resort & Spa, the Vermont Business Roundtable elected two new directors to their first three-year term: Mark Crow, Tenth Crow Creative and Don George, BCBSVT. Elected to their second three-year term were the following directors: Tom Dee, Southwestern Vermont Health Care; Mark Foley, Foley Services; Walter Frame, Trapp Family Lodge; Judy O’Connell, Champlain Investment Partners; and Mike Walsh, NFP. Continue reading “Business Roundtable Elects New Leadership for 2018 [1.12.18]”

Roundtable Announces 2017 New Medallion Award Recipient [1.3.18]

(So. Burlington, VT) Today, Lisa Ventriss, President of Vermont Business Roundtable (Roundtable) announced the recipient of the Roundtable’s 2017 New Medallion Award, which recognizes exceptional school leadership and progress toward the state’s goals of equity, access, and quality of proficiency-based learning experiences for all Vermont students.  Continue reading “Roundtable Announces 2017 New Medallion Award Recipient [1.3.18]”

Roundtable Hires Executive Director To Support Vermont Talent Pipeline Management Project [12.21.17]

VTPM Executive Director, Mary Anne Sheahan

Today, the Vermont Business Roundtable announced that it has hired Mary Anne Sheahan of Shelburne, as Executive Director of the Vermont Talent Pipeline Management Program (VTPM).

“The Roundtable and its VTPM partners around the state are very excited about this important next step toward the full realization of our program, which will improve alignment of employer needs with education and workforce programs, and grow Vermont’s economy,” said Roundtable President, Lisa Ventriss.

The Vermont Talent Pipeline Management Project is an employer-led and demand-driven model created by the U.S. Chamber of Commerce Foundation to address our statewide workforce shortages. VTPM leverages lessons learned from supply-chain management and expands the role of employers as end-customers of education and workforce systems. In 2017, VTPM has focused on building employer collaboratives in the construction and health care industries. In 2018, its focus will expand into manufacturing and technology industries. Continue reading “Roundtable Hires Executive Director To Support Vermont Talent Pipeline Management Project [12.21.17]”

VBR & EPR Release 4Qtr Outlook Survey Results, Showing Continuing Neutral Outlook [11.9.17]

Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q4 2017 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index.

Overall Finding
The latest survey, which was conducted during the first two weeks of October 2017, achieved a response rate of 68 percent overall and included a 50 percent or greater response rate from 10 of 15 represented sectors within the membership.  Survey results show that:

  • Roughly two-thirds of respondents (63%) shared negative outlooks specifically with ease of hiring for available positions, improved from the previous survey (71%);
  • Approximately two-thirds of responses to the question about the state’s overall business climate outlook were neutral (63%), a decline from the previous survey (48%).  The remaining responses were split between positive and negative, 19% and 18%, respectively.
  • The information sector had the most optimistic outlook on the general business climate (100% optimistic), while the education sector had the least optimistic outlook (50% neutral, 50% pessimistic).  This is the second quarter in a row that the information sector led in optimism about the general business climate.

Continue reading “VBR & EPR Release 4Qtr Outlook Survey Results, Showing Continuing Neutral Outlook [11.9.17]”

Ventriss VPR Commentary on Pension Reform [10.25.17]

A recent review of public retirement and healthcare plans by Pew Charitable Trusts shows that many U.S. jurisdictions are on an unsustainable path.

Vermont is in the middle of the pack relative to other states, but it can legitimately be argued that Vermont’s risks are greater than other states. And it’s imperative that Vermont, with a $3.6 billion unfunded liability, not join the growing list of states with severe benefit problems. Continue reading “Ventriss VPR Commentary on Pension Reform [10.25.17]”

VBR / EPR 3Qtr2017 Business Conditions Survey Results Show Neutral Outlook [7.10.17]

Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q3 2017 outlook results of their joint initiative, the VBR-EPR Business Conditions Survey and Index.

Overall Finding

The latest survey, which was conducted during the first two weeks of July 2017, achieved a response rate of 71 percent overall and included a 50 percent or greater response rate from 12 of 15 represented sectors within the membership.  Survey results show that: Continue reading “VBR / EPR 3Qtr2017 Business Conditions Survey Results Show Neutral Outlook [7.10.17]”

Ventriss Op-ED: Summer Study: Connecting Business, Educators, and Students to Prime Vermont’s Talent Pipeline

by Lisa Ventriss, President, Business Roundtable

The Roundtable and strategic partners[1] in the Vermont Talent Pipeline Management[2] project (VTPM) are heavily involved in the roll out of two employer collaboratives, one in construction and the other health care, aimed at increasing the availability of and access to skilled workers for the most critical roles in these vital industries. Taken together, over 50 geographically-diverse companies have agreed to engage in a demand planning process that creates short-term projections of job openings based on a set of assumptions chosen by the employers. Those data will be aggregated and talent flows analyzed to determine where their best hires are being produced, then competencies and credentials will be communicated to the education and training provider communities across Vermont with the express goal of closing our workforce gaps. Already, 40+ public/private/not for profit educators and workforce training providers have stepped forward to indicate their strong willingness to partner on VTPM.

The enthusiasm and commitment to this project from groups around the state has been extremely gratifying. VTPM is a pillar of the Agency of Commerce’s strategic work plan; the State Workforce Development Board (SWDB) has endorsed this initiative; and the J. Warren and Lois McClure Foundation, a supporting organization of the Vermont Community Foundation, has awarded funding during our pilot phase. The Roundtable has adopted college and career readiness and VTPM as our strategic foci for the next several years. Indeed, the flywheel has begun spinning in a more coordinated fashion. Continue reading “Ventriss Op-ED: Summer Study: Connecting Business, Educators, and Students to Prime Vermont’s Talent Pipeline”

Roundtable Receives Grant from the J. Warren & Lois McClure Foundation to Support Vermont Talent Pipeline Management Project [6.13.17]

SOUTH BURLINGTON, VT – The Vermont Business Roundtable, through its VBR Research & Education Foundation, was awarded a grant of $10,000 from the J. Warren and Lois McClure Foundation to advance the work of the Vermont Talent Pipeline Management Project (VTPM).

“The Roundtable is grateful for this support, which comes at a crucial point early in the life of the VTPM project and lends credibility to our efforts to improve the employability of Vermont students, to improve alignment of employer needs with education and workforce programs, and grow Vermont’s economy, “ said Roundtable President Lisa Ventriss. Continue reading “Roundtable Receives Grant from the J. Warren & Lois McClure Foundation to Support Vermont Talent Pipeline Management Project [6.13.17]”