With a projected $100 million budget gap, the governor and lawmakers must grapple with difficult spending and revenue decisions during the 2015 legislative session. In recent years, Vermont has closed its annual budget gap using a combination of one-time funds and unexpected revenue growth. Unfortunately, federal funds have stopped and state revenues are lagging making these strategies unlikely. However, there is another solution: The governor and lawmakers could make economic growth a priority.
Since November, I have traveled throughout Vermont listening to business owners and their employees. From these discussions, the Vermont Chamber of Commerce has developed a five-point Economic Growth Agenda that if enacted today would ignite economic growth, create more jobs and greater affordability for Vermonters, and help businesses to grow.
1. Promote Vermont as a great place to live, work and play. While Vermont has scant funds to offer financial incentives to attract new businesses to the state, we do have the allure of the Vermont image. By adding to our limited state tourism promotional budget, we can not only encourage people to visit but we can also demonstrate that Vermont is an innovative place to grow a business and a state with great jobs. Today, there is growth in a variety of industries like beer and food, technology and renewable energy, and aviation and aerospace. By promoting Vermont in other states as the destination to work, build a business, raise a family or even vacation, state revenues would increase from greater sales, income, and rooms and meals tax transactions. This investment would pay for itself through increased state revenues and add to state coffers without raising taxes.
2. Maintain the Agency of Commerce and Community Development (ACCD) budget. Of the approximately $2.7 billion of state appropriations, the ACCD budget is less than 1 percent. At just under $14 million, a 5 percent cut, as initially suggested, would do little to close the budget gap. Every dollar spent to promote Vermont as a tourist destination, to invest in workforce training or to recruit new businesses, helps encourage economic growth which will help to fill the budget hole. At a minimum, ACCD’s level of funding should be maintained without any cuts.
3. Preserve workforce training funds. Many Vermont businesses struggle to find highly skilled and qualified individuals to fill vacant positions. Without such a workforce, it is extremely difficult for businesses to grow, add new jobs and hire more Vermonters at competitive wages. Currently, Vermont directs $1.3 million of state funds to support on-the-job and new employee skills training. At the least, this number should remain steady.
4. Simplify permitting. The permitting process continues to be a significant barrier that prevents existing businesses from growing and new businesses from relocating here. Improved integration of regulation and planning will provide greater predictably in the process, which can be accomplished by reducing redundancies and applying Act 250 uniformly at the district commission level. Allowing growth to occur in designated areas, such as growth centers and industrial parks, without added regulatory burdens, can also start to encourage economic activity and growth.
5. Rein in health care costs. Although the conversation has focused on health care coverage and how to pay for it, the reality is that for years Vermont has had one of the highest rates of coverage in the country. The real issue is the staggering and debilitating rising cost of health care, making it unaffordable for many businesses and individuals. The Green Mountain Care Board should continue to focus its efforts on cost containment coupled with care quality and outcomes. Additionally, making the health care exchange voluntary for businesses of all sizes would ease the stress of using a system that doesn’t work for businesses while providing greater choice.
By focusing on these five areas, decision-makers will start to lay the foundation for economic growth — a foundation that creates more jobs and greater affordability for all Vermonters.
— Betsy Bishop, president of the Vermont Chamber of Commerce