Tuesday, August 26, 2008

The Word on the Street

The Word on the street is…


In response to deteriorating economic conditions, the State of Vermont has exacted its first “pound of flesh” from government agencies and is telling us to expect a second round of cuts in another month or two. The state is doing this because it is anticipating significant economic dislocation and social unease during the coming winter season. The state is encouraging municipalities and other "units of local control” to put in place emergency plans that will encourage neighbors and families to move in with each other, to purchase food staples in bulk, to car-pool, and even prepare to have sheriff’s deputies and/or the National Guard accompany heating oil delivery trucks on their rounds in case they are hijacked! Zoicks! Zounds! Is it really that bad? Evidently…

I appreciate the foresight it takes for people working in the public interest to cut costs and manage expectations in the face of a Vermont winter. But what I don’t get is why an administration that gets so specific with the “cost” side of the state’s budget is so frequently wrong about their revenue forecasts. I get frequent emails from the administration touting the fact that “income for the month exceeded forecasts by X million dollars.”

How does this happen? Don’t the budgeting pros know that every budget has an expense side and an income side? Don’t they know that some agencies’ impact is almost entirely on the income side of the budget, and that cutting their costs is, in effect, hurting the state’s ability to enhance its revenue? When are the Budget and Finance “experts” going to understand the relationship between the work that, say, the Tourism Dept., Parks and Recreation, the Film Commission, and the Arts Council does to market Vermont (including its products, services, culture and creative industries) and the State’s revenue?

A large portion of the state’s revenue comes from income tax. So what, you might ask, does the Arts Council have to do with job creation? If you ask people like Paul Millman of Chroma Technology who located his business in Bellows Falls, it was because the community was on the rise with a strong cultural sector and relatively low-cost housing. Entrepreneurs decide where they want to live first, then build their businesses there. The cultural sector is one of the leading “attractors” of business development and job creation in any community.

I think it goes even further.

I believe that the health of a community’s cultural sector is the best indicator of a community’s economic health and quality of life. The quality of schools is another great indicator. And if you have schools with great arts programs, you have achieved the “Quality of Life” trifecta because all three (schools, arts sector, and economy) are mutually dependent.

All of these attributes attract and retain businesses. And even when some businesses fail, these communities tend to weather it well enough to enable workers to reorganize, and create new businesses out of the ashes of the old.

It seems a bit short-sighted to me to be looking for a few thousand dollars here and there from these “revenue-enhancing” engines of state government, when the only sure result will be lower State revenue.

The next time the state’s revenue exceeds expectations by a significant margin, I’m going to suggest to the revenue forecasters that they find out why. I would love to know, once and for all, just how much does our state’s revenue depend on the health of its arts and cultural sector. I suspect it’s a lot more than people think. If that realization holds true, then maybe next time there is an economic downturn, the administration will actually INVEST money in the arts and cultural sector, not take it away!


1 comment:

Anonymous said...

I hope you get some answers Alex. I am told it is the legislature that cuts budgets, so why can't we convince "Montpelier" that cutting the tourism budget will cut tax revenues? Less tourists spending money in Vermont equals less tax dollars -- seems like a simple equation to me. Likewise our area has had a dramatic decrease in cultural activity, and guess what? We have had a dramatic decrease in business.