2. This Economic Outlook Seminar was presented to the State Chamber of Commerce members on January 14 th, 2015. Full data are available upon request. This document may be reproduced with attribution given to Tom Pelham and Campaign for Vermont. For more information: http://www.CampaignForVermont.org

3. 200820122015 ANNUAL RATETOTAL CHANGE Total Population624,151625,953628,346 0.10%0.67% 25 - 64 Years338,986340,353340,098 0.05%0.33% 65+ Years87,70395,126107,364 2.93%22.42% Vt Enrollments94,11489,42887,344 -1.06%-7.19% 200820122014ANNUAL RATETOTAL CHANGE Vt’ers Employed 341,450 339,300 336,550 -0.24%-1.44% Population Trends Employed Vermonters - November Consensus Forecast Vt. Dept. of Labor

4. 200820112013 ANNUAL RATETOTAL CHANGE Median Household Income $54,051 $56,734 $55,616 0.57%2.90% 200820112013 ANNUAL RATETOTAL CHANGE U.I Covered Wages (Billions) $11.599$11.905$12.6801.80%5.78% 200820112013 ANNUAL RATETOTAL CHANGE GROSS STATE PRODUCT (BILLIONS) $25.2$27.1$28.92.78%14.68% INCOME, WAGES, and GROSS STATE PRODUCT Median Income Wages Gross State Product U.S. Census Bureau Vt. Dept. of Labor Consensus Forecast

5. 200820122015ANNUAL RATETOTAL CHANGE CPI - INDEX 215.3229.6242.11.69%10.17% 200820122015ANNUAL RATETOTAL CHANGE GRAND LIST VALUE ( BILLIONS ) $80.711 $78.306 $78.905 -0.32%-3.20% 200820122013ANNUAL RATETOTAL CHANGE HOSPITAL COST SHIFT ( MILLIONS) $103.6$151.9$153.26.74%47.93% INFLATION, GRAND LIST and MEDICAID COST SHIFT GRAND LIST GROWTH MEDICAID COST SHIFT Consensus Forecast Green Mountain Care Board Consensus Forecast

6. 201020122015 (SO FAR) ANNUAL RATETOTAL CHANGE STATE FUNDS $1,759,537,526$2,027,380,397$2,294,102,1065.45%30.38% TOTAL FUNDS $4,680,907,712$4,715,953,207$5,470,583,4723.17%16.87% 201020122015 (SO FAR) ANNUAL RATETOTAL CHANGE STATE FUNDS $715,330,173$914,503,693$1,034,773,0367.66%44.66% TOTAL FUNDS $1,862,366,034$1,986,685,493$2,312,819,2394.43%24.19% 201020122015 (SO FAR) ANNUAL RATETOTAL CHANGE EDUCATION SPENDING $1,313,476,522$1,352,114,573$1,513,944,2682.88%15.26% “NET “ PROPERTY TAXES $909,400,000$913,700,000$1,022,300,0002.37%12.41% SPENDING PER EQUALIZE PUPIL $ 13,957$ 14,766$ 16,9623.98%21.53% STATE BUDGET TRENDS HUMAN SERVICES BUDGET TRENDS EDUCATION FUND SPENDING Joint Fiscal Office Joint Fiscal Office – Ed Fund Outlook

7. 201020122015 (SO FAR) ANNUAL RATETOTAL CHANGE STATE FUNDS $1,759,537,526$1,866,693,361$2,039,786,2373.0%15.9% $254,315,869 WHAT IF AND WHY NOT? STATE BUDGET TRENDS AT 3% - THE SUSTAINABLE DIVIDEND

8. 2007 20092012 2013 ($116,270) ANNUAL RATE TOTAL CHANGE # OF FILERS 31,24630,48631,25131,4010.08%0.50% INCOME (AGI) 7,194,781,8505,942,721,7977,237,383,2567,201,039,3740.01%0.09% % OF TOTAL INCOME 43.0%39.5%41.9%40.9% TAX 326,883,991274,435,980349,500,597345,418,6590.92%5.67% % OF TOTAL TAX 60.1%58.2%60.4%59.0% 2007 20102012 2013 ($355,100) ANNUAL RATE TOTAL CHANGE # OF FILERS 3,1253,0773,1253,1400.08%0.50% INCOME (AGI) 2,856,432,6251,415,712,5382,705,202,1332,534,384,261-1.97%-11.27% % OF TOTAL INCOME 17.1%9.0%15.7%14.4% TAX 153,413,37584,571,394166,717,533155,556,4440.23%1.40% % OF TOTAL TAX 28%17%29%27% TAX FILERS – Top 1% TAX FILERS – TOP 10%

9. OPTIONS FOR RECOVERY 1. MOP-UP WITH TAXPAYERS: INCREASE GENERAL FUND TAXES BY 8 PER CENT ($100 MILLION)  LET’S HOPE THE PROBLEM IS ONLY $100 MILLION 2. MOP-UP WITH STATE SERVICES: REDUCE GENERAL FUND SPENDING BY 8 PER CENT 3. STRATEGIC WORK-OUT: FY’S 2016 - 2019: ASSUME 3 PERCENT ANNUAL REVENUE GROWTH  FINGER IN THE DIKE – 2016: TAN’S AND BORROW AGAINST RESERVES FOR CASH FLOW o NOTE TREASURER’S MISSTEP OF $36.5 MILLION  LEVEL FUND FY 2016 – NOTE ANNUAL INCREASES OF 5.5% OVERALL AND 7.6% AT AHS  FY 2016 – 2019; LAZER FOCUS ON REFORMS AND EFFICIENCIES ABANDONED IN 2011 o 1.5% SPENDING GROWTH – 2017-2019, BALANCE FALLS TO BOTTOM LINE o REIGNITE “CHALLENGES FOR CHANGE” – 2011 TARGET AT $72 MILLION GF  NOTE $1 BILLION STIMULUS LOST OPPORTUNITY o REIGNITE “TIGER TEAMS - MEDICAID, AFFORDABLE HOUSING, MENTAL HEALTH, ETC. o FAST TRACK INTEGRATED MANAGEMENT SYSTEM AT AHS