Commerce secretary shares views on post-Irene economy

MIDDLEBURY — For 20 years, Otter Creek Brewing founder Lawrence Miller had joined a chorus of Addison County entrepreneurial voices pushing for government policy changes to promote business interests in Vermont.
Now Miller — secretary of the Vermont Agency of Commerce and Community Development — finds himself the leader of the state’s economic development choir. He returned to his roots on Thursday to talk to representatives of the Addison County Economic Development Corp. about how he is trying to boost a statewide business climate that is still smarting from the global financial crisis and from the after-effects of Tropical Storm Irene.
“A lot of the risk factors have nothing to do with anything we can control,” Miller said. “It’s entirely unclear what the European economic crisis will do; it’s entirely unclear what Congress will do; and we are sort of just dragged along by both of those very peculiar entities.”
The federal deficit, Miller noted, is prompting President Barack Obama and Congress to consider sweeping cuts to programs that states, including Vermont, have depended upon to stimulate economic development.
“We are looking at major cuts in areas like affordable housing supports, aid for fuel oil, support for export promotion,” Miller said. “What we’ve got to work with from outside is really at risk, and we shouldn’t count on it at all. What we’ve got is our creativity, innovation and ability to work together.”
Tropical Storm Irene, Miller said, made state government “turn on a dime” to react to infrastructure repairs and help devastated homeowners and businesses.
Once the storm hit, Miller said, the Agency of Commerce and Community Development had to serve as a rebooking agency for stranded tourists and those who had booked weddings and vacations at some locations that no longer existed.
The agency also fielded calls from businesses that suffered losses.
And those losses were substantial.
“Going down to southern Vermont, in the midst of that — I can’t tell you what it was like,” Miller said. “It was absolutely terrifying to try and imagine what we were going to do to put things back together.”
But just three months removed from Irene, Miller said he is amazed by what has been accomplished.
State officials calculated $750 million in infrastructure damage following the storm. Around $500 million in repairs have already been made, according to Miller.
Instead of pursuing the conventional process of setting out elaborate detours and temporary bridges, Miller said transportation officials plunged headlong into repairs.
“Everybody was dedicated to actually doing work and not interrupting that work to let a couple of cars go past,” he said, noting motorists ultimately figured out the detours through signs and driving habits.
“It was about getting the job done in a much more efficient way,” he said.
Still, Miller realizes a lot more work needs to be done, particularly in the area of housing. He recalled working with Federal Emergency Management Agency (FEMA) officials who toured the flood-ravaged landscape looking for suitable areas to place mobile homes. Those officials, according to Miller, even deemed some of the state’s mobile home parks not affected by Irene to be unsuitable for habitation.
Miller also recalled recently visiting a woman who was still living in the one habitable room of a home otherwise destroyed by Irene. In Vermont, there is no condemnation process for a private home, according to Miller, which complicates FEMA grant assistance.
“We need to do something about that,” he said.
At the same time, he said the state and homeowners must work to relocate residences that were built, many decades ago, in floodplain areas or next to rivers.
But not all the news is bad, according to Miller.
He said Vermont retailers and lodgers saw a good foliage season, in spite of the many roads and bridges — especially in the south part of the state — that were rendered impassable by Irene damage.
“(Tax) revenues have been pretty good,” Miller said. “We have got a $100-million smaller gap to fill this budget year than we did last year, but there is still a budget gap to fill.”
Miller said the state will employ a variety of strategies in trying to woo businesses amid the sluggish economy. Among those strategies:
•  Establishing connections with alumni of Vermont colleges to encourage them to lay down roots in the Green Mountain State.
•  Using social media to reach out to entrepreneurs.
•  Encouraging Vermonters to return with their business ideas after they have had a chance to dip their toes in the global marketplace.
“Personal connections make a huge difference,” Miller said.
While some state officials have been lamenting the exodus of Vermont’s high school graduates to other states in search of adventure and jobs, Miller has a different opinion. He believes the younger generation needs to get a first-hand glimpse of how things are done in other parts of the country and world.
“Competition is ferocious,” Miller said. “If our kids don’t get out in the world and see what’s going on and have those touch-points and references, they won’t be able to come back to Vermont and thrive. If they stay here, they will become too isolated.”
Vermont, Miller added, needs to do better in assessing the jobs and industries to which it is best suited and then pouring its limited resources into playing to those strengths.
“Trying to work against our weaknesses isn’t going to do us any good,” Miller said. “To the extent that we exploit our strengths, we will be much further ahead.”
The state must also show a more forceful financial commitment to higher education, according to Miller.
“While we are top in the country in terms of dedicating resources to education through 12th grade, we are near the bottom in resources to higher education,” Miller noted, adding that Vermont businesses need to do a better job communicating to schools what skills are needed to fill what he said are hundreds of high-tech jobs that are currently begging for applicants.
“There is a big communication gap; we are working on that,” Miller said.
He served notice that he and the business community will be watching the Legislature’s health care reform efforts very closely.
“I firmly believe that if we can de-couple health insurance from employment, it will be phenomenal for entrepreneurship,” Miller said. He said he knows many people who haven’t started small businesses because of the financial toll of providing health care benefits to employees.
Miller said Vermont spends $5 billion per year on health care, a number that is steadily growing. He said one-third of that amount is covered by the federal government; another third by employers; and another third by individuals.
“We are talking about a couple billion dollars that needs to find a different financing mechanism,” he said.
Reporter John Flowers is at [email protected].

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