Agriculture is, of course, a vital component of the economy; according to the Vermont Department of Agriculture, Food & Marketing, agriculture contributed $508 million to the state economy in total cash receipts in 2001, and of that sales from milk were about $400 million.  The state has about 6,700 total farms.  Tourists, attracted by the state's clean, green image, provide a substantial boost to the economy.  According to the Vermont Department of Tourism & Marketing some 4.3 million visitors travel to the Green Mountain state annually.

Among the top employers are IBM, which set up shop in Essex Junction in 1957 and now employs about 7,000 people in facilities of 3.5 million square feet producing microchips; IBM Burlington has also generated a number of semiconductor manufacturing innovations, contributing to the Burlington area's ranking of seventh in the U.S. in patents per capita.  C & S Wholesale Grocers, Inc., headquartered in Brattleboro, has a large freezer and dry grocery facility, which handles some 820,000 cases of dry grocery items and 360,000 cases of freezer items per week.  Fletcher Allen Health Care is "a private, publicly supported integrated health care system" that serves a population of one million in Vermont and northern New York; it has three main campuses and 30 sites overall and is served by about 650 physicians and 1,000 registered nurses.  IDX Systems Corporation, founded in 1969 as Burlington Data Processing, provides software systems for healthcare organizations and has grown to over 4,800 employees.
 

There are many thousands of small enterprises, down to the corner bookstore...

The recent recession has affected Vermont.  In a presentation to the state Emergency Board on July 10, 2002, economist Thomas E. Kavet noted the loss of more than 5,000 manufacturing jobs in the previous 18 months, with a consequent effect on state revenues.  In particular, Kavet reported that  from FY 2001 to FY 2002 revenues from personal income taxes declined by 11.2 percent and that revenues from corporate income taxes declined by 36.7 percent.  Revenues in FY 2003 were also substantially below initially forecasts.  As a result, in August 2002 Governor Dean will have to propose about $38 million in budget reductions.

The Joint Fiscal Office's annual "Fiscal Facts" reports provide a clear and comprehensive picture of the state budget.  According to "2002 Fiscal Facts," in FY 2002, the total state budget was about $3.1 billion, including federal funds (about $947 million or 30 percent), the General Fund ($871 million or 28 percent), the Education Fund (26 percent), the Transportation Fund (7 percent), and other smaller "pots of money."  The personal income tax is the largest source of General Fund revenue; in FY 2001 the personal income tax (the rate is 24 percent of federal income tax liability) brought in slightly over half of the General Fund revenue, or $454.3 million.   Next was the sales and use tax which brought in $213.5 million in FY 2001.  The Education Fund is funded by a statewide property tax introduced in 1997.  Overall, Vermont ranked 27th of the 50 states in total taxes per capita in FY 2000.

In terms of spending, the three biggest functional categories were: Education (40.6 percent), Human Services (33.0 percent), and Transportation (11.0 percent).  As with other states, Vermont faces a significant challenge in meeting the growth in expenditures on Medicaid.  An August 2000 report by the Joint Fiscal Office noted that state expenditures on Medicaid increased at an average annual rate of about 13.7 percent in the decade from 1990 to 2000, while the General Fund increased at an average annual rate of 4.1 percent.  Further, Medicaid expenditures were expected to increase by 8 percent annually over the next five years.
 

Copyright © 2002  Eric M. Appleman/Democracy in Action