Opinion: State can change business strategy
Emerson Lynn’s editorial in the Nov. 27 issue of the Independent, “How do we grow if our political leadership balks?” is instructive regarding the anemic growth in Vermont’s economy and the shortfalls in state revenues. As Mr. Lynn notes, the pro-growth sentiment does not exist among Vermont’s political class.
A look at state revenues as recently reported in Vermont Business Magazine shows that, through October 2014, personal income tax receipts are running over 6 percent behind the “target” on which the current state budget was based, and are only up a bit over 1 percent from the prior year. The shortfall in personal income tax receipts, when combined with the significant lag in inheritance and estate tax receipts, accounts for the lion’s share of the overall gap in state revenues versus those assumed in the budget. The Shumlin administration is taking steps to cut spending to match the lower revenues, much to the dismay of many Vermonters who decry the squeeze on various support programs.
As Mr. Lynn further notes, the consistent pattern of hostility to economic growth, covered extensively in most Vermont media outlets (the Independent being much more balanced) helps explain Vermont’s consistent low marks in various comparisons of growth potential among the 50 United States.
Mr. Lynn suggests later in his piece that the growing influence of Republicans, particularly at the state level, as well as Republican control of both houses of Congress, may not bode well for states like Vermont. People looking to start and grow their businesses tend to gravitate to areas where the climate supports growth and expansion. This pro-growth climate can, and does, exist in states where Democrats are in control and will remain so.
Vermonters have only to look a bit south to Massachusetts where Democrats control the Legislature (even with an incoming Republican governor). However, these legislators have long recognized that the best way to support the education and social programs they consider the core fabric of the local economy is a supportive climate for business investment and growth. The most prominent example is the pharmaceutical and biotechnology sector, where Massachusetts is a world leader in research and product development. But the state has also shown strong long-term support for the technology sector (think software and “apps”) among others.
Folks in the Middlebury area need look no further than the Middlebury Business Partnership and the great work being done by Jamie Gaucher to help bring new businesses, and jobs, to the area. He’s identified Middlebury’s core strengths and is working hard to attract organizations that would benefit from the area’s educated workforce and forthcoming supply of natural gas to foster growth in the region.
If only those elected to the Legislature from Addison County would show a greater interest in what makes the local economy more attractive and how these opportunities could stimulate other growth, and spend less time and effort on new rules and regulations, and efforts to raise taxes, Vermont could move in a more positive direction with benefits spread across the community.
Final footnote: I am a 1960 graduate of Middlebury College, have owned a second home in Addison County since 1962 and have served as an adviser to Fresh Tracks Capital (founded in Middlebury) since 2000.
Chatham, Mass., and Weybridge, Vt.
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