State workers warn of fallout from cuts
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By DANIEL BARLOW Vermont Press Bureau - Published: March 6, 2009
MONTPELIER – Lucas Herring of Barre called it the "multiplier effect."
When state workers are laid off, they stop shopping at local businesses. Those businesses see their sales drop off and lay off staff, increasing unemployment. Less taxes are paid to the state, compounding the problem of revenues.
"People are scared," said Herring, who works for the Vermont Department of Banking, Insurance, Securities and Health Care Administration. "And when they are scared, they're not spending."
Nearly a dozen Washington County lawmakers met at the Statehouse on Wednesday evening to hear from residents – including numerous state workers concerned that their jobs might be next in line to be cut – as the Vermont Legislature struggles with how to boost the state's sagging economy.
Rep. Mary Hooper, D-Montpelier, who also serves as the city's elected mayor, said future layoffs of state workers will have a dramatic affect on the region – including downtowns from the capital city to Waterbury.
She read an e-mail she received this week from the owner of Montpelier's Capital Stationers saying state workers equal about 25 percent of its business. The poor economy has already resulted in about a 20 percent loss in business for the store, the e-mail said, and the owner is worried about its future.
"Quite frankly, if the trend continues, I won't be here by the end of the year," Hooper said, reading the e-mail. "We have more going out than coming in."
Shelly Martin, a resident of Westfield who works at a state office in Waterbury, began her testimony by listing off the businesses that she and other co-workers frequent in the town they work in – businesses they could no longer support if they lost their jobs.
George Malek, the executive vice-president of the Central Vermont Chamber of Commerce, told lawmakers to hold the line on increasing taxes. He said he was especially worried with the possible increase in unemployment taxes on businesses to refill that account, which is quickly being drained as more and more people lose their jobs.
Dona Bate, a Montpelier small business owner and one of the organizers of the Lost Nation Theater, said the state needs to expand its Catamount Health program, adding that the "only way you can make [the program] work is by letting small businesses buy into it."
Lee Lauber, the executive director of the Family Center of Washington County, praised state officials and Gov. James Douglas for a proposal to allocate $7.2 million more toward child care assistance, explaining "If families don't have child care, they can't work."
But she warned that the subsidies to families for the program are based on a model that is 10 years out of date. Vermont uses a poverty guideline from the year 2000, she said, despite that the federal poverty guideline has been updated for 2009. This means less families who need this help will have access to it, she explained.
"It's heinous that Vermont is using poverty guidelines that are 10 years old," she said.
Sen. Ann Cummings, D-Washington, the chairwoman of the Senate Finance Committee, said talks continue on how best to bring Vermont's state government budget in line closer with revenues.
But even between cost-cutting measures, increased fees or taxes and the federal stimulus money – there will need to be some further staff reductions, she said.
"No matter what we do, we're still millions of dollars in the hole," Cummings said. "We can't make promises that it will all go away."
Contact Daniel Barlow at Daniel.Barlow@timesargus.com.
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