MIDDLEBURY — Doug Hoffer, Democratic candidate for state auditor, has based his campaign on two principles: asking tough questions of government and state policies, and making sure the numbers cited in studies and reports — as well as those used by the Legislature and political leaders — contain the full picture of any issue, not just a slice of the pie to favor one political perspective over the other.
This fall he has been particularly vigilant about setting the record straight on Vermont’s tax policy, a political punching bag for the current Douglas administration and gubernatorial candidate Brian Dubie — both of whom have claimed Vermont’s property taxes are the “highest in the country” while making similar claims about the state’s income tax. That claim, Hoffer notes, is a gross simplification and is, in fact, misleading.
The details behind Hoffer’s explanations are an indication of how he would serve as state auditor, if elected over his Republican opponent Tom Salmon.
Putting the property tax claim in perspective, Hoffer explains that Vermont is the only state in the country that has shifted education costs to a statewide property tax, rendering the claim that Vermont has the highest property taxes in the country next to meaningless. But when state and local per capital property taxes are compared to other states, Vermont ranks seventh — behind New Jersey, Wyoming, Connecticut, New Hampshire, New York and Rhode Island.
Even then, Hoffer says, the problem with the tax comparison is that the figures don’t account for the property taxes paid by non-residents — an important measure in a state with the second highest percentage of second homes in the nation. When those taxes are subtracted, as well as commercial property owned by non-residents, Vermont ranks 16th from the top, not the highest in the country.
It is similar with the income tax, Hoffer explains. Earlier this fall, he took Dubie to task on his claim that Vermont’s income tax is higher than Maine, Massachusetts or Rhode Island. When Dubie makes that statement, Hoffer notes, he refers to Vermont’s highest marginal rate, which applies to less than 1 percent of Vermont taxpayers. But Vermont doesn’t have just one income tax, Hoffer emphasizes. It is a progressive tax system with Vermonters paying at very different rates based on their income.
Hoffer goes on to explain that even with he highest rate, Vermont’s top rate doesn’t take affect until after the first dollar over $372,951, whereas in Maine, the top rate kicks in on the first dollar over $19,750. When comparing the three states, Vermont has lower income taxes that either New Hampshire or Massachusetts for those with incomes under $109,000 and is lower than Maine’s even at incomes over $357,934 (Maine’s income tax would be $23,417, while Vermont’s would be $20,872, and Massachusetts would be $18,030.)
Nor is this information known only to bean-counters. Hoffer explains that the Legislature’s Joint Fiscal Office produced a chart showing this detail in the 2007 Tax Study, which was widely distributed amongst the Legislature and administration.
Hoffer’s insistence on detail, accuracy and putting the information in the context of the fullest picture, he says, is critical when developing public policy. Otherwise, he says, poor policy is based on political rhetoric that often intentionally misleads the public. Pursuing accuracy over a political agenda, he says, is what makes him the best candidate for the office.
“Too often, the current auditor misses the elephant in the room… but I’ve been asking the hard questions for the past 20 years, and then try my best to answer them. Results are supposed to be based on facts, and that’s all there is to it.”
BACKGROUND, LOOKING AHEAD
Hoffer, 59, has a B.A. from Williams College and J.D. from SUNY Buffalo Law School. He came to Vermont in 1988 to work for the city of Burlington in its Economic Development office, a position he held until 1993 when he went off on his own as a policy analyst and consultant.
He has written dozens of reports for legislators and government officials. A policy analyst and certified public accountant, Hoffer says he has no higher political ambitions other than state auditor. His opponent contemplated running for governor until Dubie got into the race.
Hoffer worked with former state auditor Ed Flanagan for five years as a consultant, doing audits for the state and drafting several of the periodic tax studies. Of that experience, he recalled that Flanagan “understood something very important: asking the question, ‘Did we get value from the money spent?’”
“Traditionally,” Hoffer said, in explaining the office’s role, “the auditor would follow the money only… You make sure that the state didn’t make double payments to a contractor, or that checks were going to the people who were supposed to get the checks. You’re looking for fraud, waste and abuse and you make certain that the state’s financial statements have been audited… The auditor is also required by statute to audit the sheriffs in each county, and the state’s largest business tax incentive program, Vermont Economic Growth Initiative (VEGI)…. At the end of the day, there is always a little bit of money left over for the auditor to use at his or her discretion, and that’s where you learn something about the auditor.”
Asked what initial things he would tackle as auditor, Hoffer was blunt: “It’s prudent to follow the money. It makes sense to look at the biggest programs, where, at least in principle, there is the most likelihood to find a problem. In our state that would be Medicaid, transportation and corrections… That doesn’t mean I expect to find problems, just that I would start with the big guys… The second opportunity, given the times, is that the administration has cut a lot of jobs in the last few years and there were assumptions about how that would affect the quality of the services provided, or even the quantity, but nobody has measured that yet…. I would like to see a systematic review of some of the programs that really got chopped, to see what happened…
“Another area to tackle is in the Challenges for Change environment. We need to identify areas where there are information gaps. In order to have a conversation about the return you’re getting for the money you’re spending now, you have to have performance data. One of the biggest and most obvious is tourism, and another is the tax credits through VEGI. Those two represent almost half of all state funds in economic development. In the absence of good hard data, we waste a lot of money.”
While he has not yet held statewide public office, Hoffer cites his experience as an independent auditor for the state and private business, as well as authoring many studies for the state, as testament to his readiness to do the job.
Those studies have included: a Job Gap and Livable Wage study, which changed the discourse several years ago about livable wages in Vermont; another Job Gap Study on the Leaky Bucket, which “quantified the economic benefits of increased local production of food and energy,” two movements that have recently taken hold and become mainstream economic forces; a Leaky Bucket fallout study for the state treasurer which led to a new policy by the pension fund’s investment committee to look for opportunities to invest more money in the local and regional economy; and two accountability studies, one which led to the shutting down of a state funded “corporate welfare” program for financial services that was “a failure and wasting money,” Hoffer said, and the other an aspect of the job gap study that looked at economic development budgets holistically by asking three questions: “How much money have we spent for economic development? For what? And with what results?”
Hoffer’s tough approach has earned him respect, if not necessarily a fan club. “Doug was born for this job,” Rep. Warren Kitzmiller, D-Montpelier, told the Burlington Free Press earlier this summer. “(He) has spent a career watch-dogging economic issues. I don’t know of anyone more ferocious about going after claims made without proof. He wants to make sure we are getting measurable results for our money.”
Hoffer, who has been critical of incumbent Salmon for not asking tougher questions in audits on some of the state’s most pressing issues, says he’s ready to tackle those challenges.
“I’d like to raise the bar for the auditor’s office and I think I’m the right guy to do that,” he said. “I’m a numbers guy, I ask hard questions and I think it’s all about performance measurement.”