Mr. Margolis’s commentary in VTDigger, entitled “Why Vermont Has Little to Fear From Florida” (July 10th) identified some interesting information regarding income tax filers, issues that can impact their mobility, and the demographics of those entering and leaving Vermont. At the conclusion of his piece, he casually states that “Vermont, like every other state, has its economic problems and some things to worry about. Rich folks moving to Florida is not one of them.” I’d like to offer another perspective; rich folks moving to Florida is a big problem that we should worry about.
I certainly agree with the comment that Vermont has its economic problems. Perhaps most troubling is that Vermont’s General Fund budget grew 27 percent during the period 2011-2016 while our GSP barely registered a heartbeat. This pattern more than any other speaks to a political culture of big ideas disconnected from sustainable fiscal policies. Such lack of fiscal discipline has resulted in ritualized budget deficits backfilled with tariffs, special fees, and odd tax increases that target individual companies and industry sectors. This is not responsible leadership and all taxpayers have suffered in this scenario, but none more than the middle class.
Vermont was one of only nine states whose population shrunk in 2015. In fact, in-migration has been slowing since its peak in 2003 and went negative in 2014, so I take issue with Mr. Margolis’s comment that “net domestic outmigration might (or then again, might not) be something to worry about.” Shifting mobility patterns matter a great deal ~ just ask any business attempting to expand ~ and we should be doing everything we can to make Vermont the primary residence of choice, regardless of age cohort. At the very least, Vermont should stop doing those things that make us a less desirable place to call home.
A closer look at Boomers aged 65 years or older reveals that they made up between 27-31 percent of all Vermont tax filers whose AGI was $1 million + , and generated $1.2 Billion in taxable income (2011-2014). Perhaps they never thought of relocating while they were in their prime earning years, but, perspectives change with a looming retirement. To assume, as Mr. Margolis does, that our beautiful natural environment is enough to distract people from burning through their retirement funds faster than they could in Florida isn’t rational. This native Vermonter knows that there are many other beautiful and less expensive places to live.
In fact, according to www.howmoneywalks.com , when Vermont has historically lost wealth and population, it has largely been to slightly more tax friendly, warmer climes with a seacoast (e.g., Florida, the Carolinas, and Maine). When we have gained wealth and population, it has come from people relocating from states in the congested Northeastern Corridor that have slightly worse tax policies than ours (e.g., New York, Pennsylvania, New Jersey, Connecticut, and Massachusetts). So let’s do less of the first and more of the second scenario. It’s not rocket science, but it does require backbone.
The late Geoffrey Shields, President and Dean of Vermont Law School, and Roundtable member was known for suggesting that Vermont should market itself as a retirement location of choice. Our colleges, communities, and vibrant arts and cultural institutions are appealing to active and engaged retirees with means and mobility. Vermont would be foolish to disregard the importance of this demographic to our economy, yet any accounting firm will tell you that increasing numbers of their clients are planning to relocate away from the Greens upon their retirement.
So, our state policies (i.e., economic, fiscal, social) do matter very much, and the potentially adverse implications of a shifting mobility pattern should also matter to everyone. Vermont would be hard pressed to make up that lost $1.2B in taxable Boomer income on a stagnant/shrinking workforce population.
How our new political leadership in the Executive and Legislative branches shape policies and priorities in their first term will be an early warning signal. Will there be a continuation of the expansive and costly growth policies of the last six years, or will there be a pivot to more sustainable government that is welcoming to all taxpayers?