1st Quarter 2019 Business Conditions Survey and Index
Results Show Continuing Neutral Outlook
(South Burlington, Vt.) Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q1 of 2019 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index.
(South Burlington, Vt.) At its 32nd Annual Membership Meeting held January 17th at The Essex Resort and Spa, the Vermont Business Roundtable elected new officers: Chair Mark Foley, Foley Services; Vice-Chair Judith O’Connell, Champlain Investment Partners; Treasurer Scott Giles, Vermont Student Assistance Corporation; Secretary Stephanie Mapes, Paul Frank + Collins; Immediate Past Chair Michael Seaver, Peoples United Bank; and, President Lisa Ventriss. (more…)
Roundtable Announces 2018 New Medallion Award Recipient
Ken Cadow, Randolph Union High School, is Recognized
(So. Burlington, VT) Today, Lisa Ventriss, President of Vermont Business Roundtable announced the recipient of the Roundtable’s 2018 New Medallion Award, which recognizes exceptional, innovative school leadership and dedication in the design and delivery of proficiency-based learning experiences for Vermont students. (more…)
Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q4 of 2018 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index.
The latest survey, which was conducted during October and November of 2018, achieved a response rate of 65 percent overall. Survey results show that:
Results Show Continuing Neutral Outlook
Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q3 of 2018 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index.
Overall Finding
The latest survey, which was conducted during July and August of 2018, achieved a response rate of 61 percent overall, down from previous levels due to summer schedules. Survey results show that: (more…)
It’s well accepted that a picture is worth a thousand words, as any visual learner or marketer will attest. But, how does one visualize something as enormous as the U.S. economy – the largest in the world at $19 trillion – and how do we view Vermont’s economy in comparison?
Recently, I’ve been fascinated with a comparison of each state’s GDP from 2017, with that of equivalent countries. California, Texas, and New York are the top three state economies, which align closely with the GDPs of the U.K., Canada, and South Korea, respectively.
Yes, Texas’s GDP is larger than that of our neighbor to the north. (more…)
(South Burlington, Vt.) At its 31st Summer Membership Meeting held at Sugarbush Resort, the Vermont Business Roundtable elected five new members to the organization including: Dan Bennett, CEO of Gifford Health Care; Phelan Fretz, Executive Director of ECHO Leahy Center; Sarah Morris, Fifth Generation Host at Basin Harbor Resort & Boat Club; Premila Peters, President and CEO of Data Innovations; and Dawn Terrill, President of Jani-Tech. Also at the meeting, the members installed Pennie Beach, Founding Director of Vermont Business Roundtable and Fourth Generation Host of Basin Harbor Resort & Boat Club, as Honorary Member.
The Roundtable also welcomes newly installed CEOs of existing member companies including: Joanne M. Conroy, MD, President and CEO of Dartmouth-Hitchcock Medical Center; Jay Fayette, CEO of PC Construction; Scott Finn, President and CEO of Vermont Public Radio; Peter Kunin, Managing Partner of Downs Rachlin Martin; Ralphine O’Rourke, Shareholder of Primmer Piper Eggleston & Cramer P.C., and Associate Members, Jody Cole, Regional Manager of Commercial Banking at People’s United Bank; Sandy Mayotte, COA and Senior Vice President of A.N. Deringer, Inc.; Cassie Polhemus, Chief Operating Officer of the Vermont Economic Development Authority; Gregory Woodworth, SVP and General Counsel of National Life Group.
# # #
Please Visit VermontTPM.org for more information on the Vermont Talent Pipeline
by Lisa Ventriss, President
Exclusive for Vermont Business Magazine
While disappointing, the recent announcement that Revision Military had decided to move its official US headquarters to Portsmouth, New Hampshire was not shocking. As a worldwide leader in the manufacture of protective military and law enforcement gear, Revision’s demand for its products means it needs access to a larger talent pool. So proximity to Boston and Pease AFB’s cluster of military tech businesses made great business sense. And there are other examples of companies that have found they cannot expand in Vermont for lack of human capital, and are considering expanding into other regional markets.
This perspective is verified on a quarterly basis with the VBR/EPR Business Conditions Survey, in which “ease of hiring” is viewed negatively by over 70 percent of respondents in the latest survey, and which is the biggest contributor to a sustained “neutral outlook” on the state’s overall business climate over the last several years. (more…)
by John Pelletier, Director of Champlain College’s Center for Financial Literacy
If you pay income or real estate taxes in Vermont, you are like an insurance company. You are insuring, with your taxes, the retirement pension and healthcare benefit promises made to state employees and public school teachers. Here are the risks you are insuring: investment risk, longevity risk and economic growth risks.
Like all insurance companies, you are only on the hook if there is a big loss that has not been saved for. But here is the problem—our state retirement and healthcare plans are currently on an unsustainable path. Without changes, it’s likely that in the future Vermonters will be hit with big tax increases to pay for these promises.
Since 2001 Vermont’s pension obligations have grown much faster than the assets held in the pension plans. In 2001 the funded ratio (the ratio of the actuarial value of assets to actuarial accrued liability) for the state employees’ and state teachers’ retirement plans was 93% and 89%, respectively, and in 2017 was 71% and 54%, respectively. Vermont has no funds set aside to pay for the expensive and growing healthcare retirement benefits.
Investment Risk is the risk that plan returns are below expectations. According to USA Today we are currently in the midst of the second longest bull market in history (9+ years) and second in terms of investment gains (over 300% in market gains). Are Vermont’s pensions prepared for the next inevitable bear market—a decline in the value of equities that is greater than 20%?
Many in the investment industry are warning investors to expect lower equity investment returns over the next decade because stocks appear to be expensive right now.
Bonds are a very important source of pension plan income. In 2000, ten year treasury bonds returned about 6.4% in interest a year, but only 3% a year today. Experts expect interest rates to continue to rise. If a pension’s bond portfolio has a 7 year average duration, these bonds will decrease in value by 7% if interest rates increase by 1%.
Our state pension plans are based on an expected return of 7.50% a year. Is that a realistic expectation for the future? Calpers, one of the largest pension plans in the country, reduced its return expectations to 7% in 2016. Milliman, the world’s largest provider of actuarial services, in a 2017 study, stated that a more realistic rate of return assumption for public pension plans is 6.71%.
This return estimate is consistent with actual public pension returns according to a recent Wall Street Journal article: median annual public pension returns were “6.79% over the past decade and 6.49% over the past 20 years.” In fact, over the last 10 years the Vermont state employees’ and state teachers’ retirement plans have had average annual returns of 4.8% and 4.6%, respectively.
Longevity Risk is the risk that plan beneficiaries live a lot longer than we expect. If you were born on this date in 1948, you are 70 years old today. In 1948 the life expectancy of a newborn child was 70 years. Today the life expectancy of someone born in 1948 is 85 years. Life expectancy has increased by two years each decade. A World Economic Forum report titled “We’ll Live to 100—How Can We Afford It?” notes that people born in the US in 2007 have a life expectancy of 103 years. Our public pension and healthcare plans were designed for 10 to 15 years of retirement, not 20 to 45 years. Without changes, many individuals will collect retirement benefits for more years than they worked.
Economic Growth Risk is the risk that Vermont’s economy and tax revenues do not grow as quickly as expected. The current economic recovery (9+ years) is the second longest in US history. At some point in the future we will have another recession and that will result in a material drop in Vermont’s tax revenue.
Vermont’s economic growth has been slow since the Great Recession. According to Bureau of Economic Analysis real gross domestic product growth in Vermont has ranged between 0.5% and 1.5% a year from 2014 to 2017.
Vermont’s population and its labor force are shrinking. This puts severe limits on Vermont’s economic growth potential. Vermont should expect subpar economic growth in the future compared to other states.
Vermont is the second oldest state in the nation. Only Maine is older. In fact, 1 out of 6 Vermonters is older than 65. Unless things change, Vermont will have many fewer wage earning taxpayers in the future. How will Vermont fund these retirement benefit promises with a shrinking tax base and low economic and tax revenue growth?
Vermont has made promises to its state employees and teachers. We need to make sure that we can keep these promises without drastically raising taxes on Vermonters or dramatically reducing state services through budget cuts. There will be another stock market crash and recession. Will Vermont be ready or will it submit a big insurance claim to its taxpayers?
# # #
John Pelletier is the Director of the Center for Financial Literacy at Champlain College, and a member of VBR’s Pension Reform Task Force
A few times a year I take the plunge and buy a handful of lottery tickets, especially when the prize money catches my attention.
I absolutely understand the statistical probability of my winning, but as the adman says, “You just never know!” And that’s enough to motivate my occasional purchase and fuel my imaginings for a posh retirement.
But we know that’s not the way to build a retirement nest egg, and in fact, doing it the right way requires knowledge and informed decision-making as early in life as possible. (more…)
30 Kimball Avenue, Suite 300
South Burlington, VT 05403
