The economist contracted by the Legislature for consultation and analysis has sent a scathing report back to the Joint Fiscal Office in regards to a bill before the Senate Finance Committee called “Vermont Recovery and Reinvestment Act of 2009 (S.137).” Tom Kavet is an economist from Williamstown. As part of his introduction, he says, “Virtually none of the proposed programs that reduce revenues or increase spending represent any net economic stimulus benefit to the State.” He questions essentially all of the measures as benefitting near-term economic stimulus. He suggests that maximizing federal stimulus funds is by far the best opportunity for the state to recover from the current recession. He also makes a case that a fully funded “rainy day fund (a reserve fund used to make up for lost tax revenues in bad times and replenished during good times)” would be logical public policy, rather than cutting taxes in good times and raising taxes in bad times, but which would require a significant change in political will. The current balance of this fund is $60 million.He goes on to say that the state lacks a comprehensive economic development plan. And even mentions that the popular “sales tax holiday” from last summer and touted as a stimulus measure, “probably actually resulted in a small net economic loss.” He also says that cutting state programs or laying off state workers also would result in a net loss to the economy over the next two years. Below is his overview to the report (click here for the full report).To: Steve Klein, Legislative Joint Fiscal OfficeFrom: Tom KavetKavet, Rockler & Associates, LLCWilliamstown, VermontWebsite: www.kavetrockler.com(link is external)CC: Senate Finance CommitteeDate: April 8, 2009Re: Requested Review of Proposed Vermont Recovery and Reinvestment Act of 2009, S.137OVERVIEWPer your request, I have summarized perspectives on the: 1) Costs, 2) Near-Term Economic Stimulus Effects and 3) Policy Considerations, associated with the 121 relevant sections proposed in S.137, the Vermont Recovery and Reinvestment Act of 2009.While the bleak economic conditions that were originally cited as the rationale for this legislation are real and present, the efficacy of many of the 121 measures contained withinthem to address these conditions can only be described as minor, and in some cases, misguided. Many of the measures are revised versions of programs that have either had little or no beneficial impact as previously enacted or proposed measures that have been rejected in prior legislative sessions.Many of the measures represent substantial State expenditures of revenues – whether as tax expenditures that reduce revenues, loan loss guarantees that may reduce revenues, or direct expenditures – at a time of severe revenue stress. Virtually none of the proposed programs that reduce revenues or increase spending represent any net economic stimulus benefit to the State. This is because they must be funded with offsetting tax increases or spending cuts (see page 2 insert for more a more detailed discussion). Few of the proposed measures provide clear goals stating expected public benefits for these public expenditures, and fewer still provide transparent public oversight to insure that these benefits are achieved. Most importantly, the larger policy framework and supporting analysis within which these measures fit, is absent. As noted in comparable pending House legislation, Vermont lacks a shared statewide vision of its economic future ¦[and] lacks a single, holistic, integrated state plan for economic development. (See H.313)Without a coherent plan and credible planning entity, such measures accumulate, overlap and add to administrative (and user) chaos with those already passed, many of which are unused, unevaluated and of uncertain benefit. Without a strategic plan, the efficiency of public expenditures is diluted and policy priorities remain vague. Economic development becomes a catch-all for anything any other state is doing and anything that might help. While the political impetus to do something is understandable at times like this, it is important to understand the limitations of state economic policy options that can truly impact the broader economy. For example, the beneficial economic impact of almost all of the non- ARRA measures proposed in the subject legislation would be exceeded by the expenditure of the State Rainy Day Fund (about $60 million) and would be dwarfed by the negative economic impact of laying off substantial numbers of state workers and cutting expenditures for essential state services.The most impactful portions of the proposed legislation are those related to maximizing the receipt and expenditure of federal economic stimulus dollars. There is no other single public policy action the State can take with greater beneficial impact on the State s economy over the next two years than measures to aggressively attract and utilize the massive ARRA funds now becoming available (see chart, next page). Proposals in this legislation that maximize and rely on this funding have powerful beneficial economic and fiscal impacts because, for the most part, they do not require any additional State taxation or offsetting spending cutbacks to finance. With nearly $1.5 billion in potential state investment, these policy areas should receive the highest legislative priority.Administrative concerns associated with these proposals should also be given fair weight. All too often, programs are rushed into existence without careful planning regarding compliance, operation and public oversight. The VEPC EATI program, for example, was developed with the best of intentions, but without careful consideration as to how the program would be policed and managed, and resulted in the loss of millions of dollars in taxpayer money due to program loopholes and abuse. All of the large programmatic proposals should be thoroughly vetted by the Tax Department, Joint Fiscal Office and other administrative agencies to determine administrative costs and concerns regarding program operation before passage, and all should have some form of public oversight and follow-up to insure that the expected benefits are received.The below assessments for individual sections of this bill should be considered preliminary, since new information is being made available daily and statutory revisions are being constantly introduced. This memo is based on statutory language as of March 27, 2009. Updated analyses will be made available to various committees upon request as these proposals move through the legislative process.
RelatedPosts EPL: Son fires four past Southampton Bale completes Tottenham return from Real Madrid Tottenham re-signs Bale on loan World Cup runners-up Croatia stayed on course to qualify for Euro 2020 after a dominant display gave them a 4-0 Group E win in Slovakia. In another fixture, Wales kept alive their own hopes after a 2-1 home victory over Azerbaijan on Friday. Croatia are level with Hungary at the top of a tight group with both teams on nine points from four games, three ahead of Wales and Slovakia. Azerbaijan have no points. The Croatians hit the woodwork three times in the first half in Trnava and Slovakia keeper Martin Dubravka pulled off several good saves. However, Nikola Vlasic fired the visitors ahead in the 45th minute with his first international goal. The midfielder took the ball in his stride and fired a stinging low shot past Dubravka from 20 metres after the home side had survived a fierce Croatian onslaught. Ivan Perisic, who hit the crossbar and the post in the first half, made it 2-0 less than a minute after the break when his heavily-deflected shot from 25 metres left Dubravka stranded. Striker Bruno Petkovic added the third with a simple close-range finish after a flowing move as Croatia kept their feet on the pedal. OSlovakia could only muster a pair of shots from Robert Mak at the other end. Defender Dejan Lovren put the icing on the cake for Croatia with a diving header from a tight angle in the 89th minute. A bizarre Pavlo Pashayev own goal fired Wales ahead in the 26th minute as Gareth Bale’s deflected shot looped into the air and went in off the defender’s shoulder with keeper Salahat Agayev coming off his line to smother the ball. Mahir Emreli silenced the home crowd in Cardiff when he capitalised on Neil Taylor’s blunder and beat Wayne Hennessey at the second attempt, slamming in the rebound after the Wales keeper parried his initial effort. But the Welsh had the last laugh as Bale beat Agayev with a looping header in the 84th minute after a deflected Joe Allen effort fell kindly into his path. Reuters/NAN.Tags: CroatiaEuro 2020Gareth BaleMartin DubravkaWorld Cup
MATTHEW KUTZ/Herald photoAs the Badgers approach their rematch with Penn State, the signs might point to a season sweep for the Nittany Lions.No. 3 Penn State (19-2, 10-0 Big Ten) comfortably parked itself atop the Big Ten volleyball standings with a two-game lead, thanks to a perfect first half of the season.But while the Lions are clicking on all cylinders, the Badgers (16-3, 8-2), who slipped four spots in the rankings to No. 11, have sputtered a bit at midseason. With an illness plaguing senior outside hitter and co-captain Aubrey Meierotto, UW barely got by Michigan State in five games, then lost ground in the conference race with a heartbreaking defeat — 16-14 in the fifth game — at unranked Michigan.”Aubrey brings so much to the team in a couple of different areas,” said head coach Pete Waite. “She is a great attacker with great pace on the ball. She’s able to block some of the best hitters in the conference, and she probably has the toughest serve on our team.”You take those three factors out, and you’ve got to make up a lot to stay at the level we’ve been playing,” Waite continued.Now, with Meierotto expected to return for Friday night’s match at University Park, the Badgers will try to recover and steal a win against Penn State tonight, followed by a match with Ohio State (14-5, 7-3), just one game back and nipping at Wisconsin’s heels.With the surprising loss to Michigan, and two upcoming games that UW could potentially lose, the Badgers are determined to not tumble from their elite status in the Big Ten.”[The Michigan loss] motivated us. That game showed us how much harder we have to work,” outside hitter Audra Jeffers said. “I think it was just a great learning experience for everyone, and it’s helped us prepare for this weekend.”Outside hitter Maria Carlini is coming off the best match of her career, posting a personal-best 29 kills against the Wolverines. Obviously, Carlini found it difficult to enjoy her breakout match in defeat.”I just wish we could have come out with the ‘W,'” Carlini said. “It was hard, losing 16-14 in the fifth game. It was just tough. But everyone battled, everyone fought hard.”Carlini said that the Badgers learned some things from a lesser Michigan team that can be put into effect against Penn State.”It taught us that we have to be aggressive right from the get-go, and not wait until we’re down four or five points before we start to really play our game,” she said. “It taught us we need to be stronger when we do get the lead and maintain it, to not let anyone take it from us.”On Oct. 8, the Lions came into the Field House and were greeted by a crowd of 6,774 fans, the third-largest attendance in the country this year. Seeing as Penn State was unfazed by the road atmosphere, the Badgers have had to undertake some extra preparation before going to University Park.”Where we thought we were working hard, we weren’t working hard enough,” Jeffers said. “This week, everyone has come in with the mentality that we just have to step it up every play in practice, every drill, and just work a lot harder as a team.”Like any good team, Wisconsin has kept a short-term memory when it comes to past results against both the Lions and the Buckeyes. The Ohio State match on Oct. 7, one night before the Penn State defeat, was just as decisive, but fell in UW’s favor.”We’re trying not to focus on those matches, we’re trying to look at what we did wrong when we played Penn State the last time, what we need to improve on,” Jeffers said. “We’re not dwelling on the loss or celebrating the win, we’re just going to move on and try to beat [both teams] this weekend.”Waite said the team is staying positive about its chances to knock off a faster Penn State squad by remembering that upsets do happen.”We’ve got to realize that on any given day, anybody can play great ball,” Waite said. “Michigan had been a team at the middle of the pack, but they are very capable of playing with the best in the conference.””Any time you’re a higher-ranked team, people are going to go after you,” he continued. “So obviously, against Penn State, we’re going to have to raise our level of play and the speed of our game to stay right with them.”