Art Woolf, Free Press contributor Published 2:02 a.m. ET March 2, 2017 | Updated 2 hours ago<\/p>\n
Vermont ranks No. 1 in per capita health care spending, third in welfare spending and fourth in transportation spending. Clover Whitham\/Free Press <\/p>\n
A bed at the Porter Medical Center in Middlebury.(Photo: FREE PRESS FILE)Buy Photo <\/p>\n
Vermonts state government and all of its local governments collect $3.5 billion in taxes, $2 billion in federal revenues, and more than one billion dollars in additional funds from a variety of other sources. Vermont governments'largest single expenditure item is for education, which I will focus on at another time. Lets just look at where governments spend the remaining $4.2 billion. <\/p>\n
The single largest expenditure is the $1.7 billion we spend on public welfare, which includes many different programs that primarily go to low income Vermonters. Some of that comes from federal government grants and some from Vermont taxpayers. On a per capita basis Vermonts spending on public welfare is 50 percent more than the 50-state average, ranking us third highest in the nation. We cant tell exactly how much of that spending comes from the federal government and how much from Vermont taxpayers, but compared to most states, we spend a lot more tax dollars to support our low income population. <\/p>\n
Double health care costs <\/p>\n
Closely related to that is the $343 million the state spends on health care. Although a great deal of health care spending goes to low income people, in Vermont a lot of people who are not poor also get their health care and health insurance from the state. On a per capita basis, Vermonts health spending is thehighest in the nation and we spend nearly twice as much as the average state. <\/p>\n
Vermont is not a poor state our incomes are about average so its somewhat surprising that we spend so much more on health care than most states. One reason is that 28 percent of Vermonters under the age of 65 are on Medicaid compared to 20 percent nationally. That difference translates into a higher cost out of the state budget. The state has enacted programs and policies over the past several decades to encourage people to enroll in Medicaid. But that has not significantly reduced the number of uninsured Vermonters. Many of the non-poor people on Medicaid were formerly on their employers health care plans or bought health insurance on the private market. Over time that number has fallen and the number on Medicaid has increased. <\/p>\n
Transportation costs are higher <\/p>\n
While health and welfare spending go primarily to poor and low income Vermonters, the third largest expenditure item for Vermonts governments, transportation, benefits everyone rich, poor, and especially the middle class. The nearly $700 million we spend, mostly on roads, bridgesand highways, comes to more than twice the national average per person and ranks us the fourth highest spender in the nation. Part of the reason we spend so much is that maintaining highways is expensive in cold, snowy, northern climates. But there is more to our high spending than just climate. Because Vermont is a rural state we have a lot of miles of roads to maintain and not very many people to pay for it. <\/p>\n
The bridge carrying Route 2 over I-89 at exit 17 in Colchester, seen on Monday, February 27, 2017, has been classified at structurally deficient by the state.(Photo: GLENN RUSSELL\/FREE PRESS) <\/p>\n
What do we get for our above-average level of transportation spending? Forty-five percent of our roads, according to the U.S. Department of Transportation, are in either poor or mediocre condition. That sounds bad, but 26 states ranked worse than Vermont. The U.S. Department of Transportation also says one-third of our bridges are in bad shape, but 42 states have higher percentages of poorly maintained bridges. So we spend a lot on our highways, but that spending seems to make our transportation system better than most states. <\/p>\n
Those three areas welfare, health, and transportation account for nearly two-thirds of our non-education spending and we spend a lot more than most states on all of those. As far as most other large categories of spending go, Vermont is close to average. We spend slightly less than most states on police and on prisons. Despite our reputation as a green state, we also spend a little bit less on parks, sewage treatment, solid waste, and other natural resource areas. But those three below-average categories account for only 15 percent of total non-education spending so they are relatively small potatoes. <\/p>\n
Economies of scale? <\/p>\n
Our small size does seem to affect how much we spend on the general cost of governmental administration everything from paying the governors salary, financing the legislature, supporting our town offices, maintaining government-owned buildings, and the judiciary. It costs every Vermonter $472 for those services, 17 percent more than the average state. We may spend more because were a small state and with 250 mostly small towns, we cant realize economies of scale in state or local government. But maybe thats not the case. Two of the largest states in the nation, New York and California, spend even more per capita than Vermont on the government administration. <\/p>\n
In general, Vermont government spends a lot on health, welfare, transportationand government itself and is not much different from most states for most other spending items. But the biggest difference is how much we spend on education. More on that later. <\/p>\n
MORE FROM ART WOOLF: <\/p>\n
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Are VT taxes high? Art Woolf counts the ways <\/p>\n
THE BURLINGTON FREE PRESS <\/p>\n
Are VT taxes high? Art Woolf counts the ways <\/p>\n
Vermonts future: Raise taxes or eliminate programs <\/p>\n
Art Woolf is associate professor of economics at the University of Vermont. <\/p>\n
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