Lt. Gov. Phil Scott focused on business climate in quest for governor’s seat

MIDDLEBURY — Statewide campaigns in Vermont are inevitably chock full of potluck suppers, parades, worn shoe leather and sound bites. Lots of words and speechifying.
Vermont Lt. Gov. Phil Scott is going to be doing all of those things during the next few months. But he sums up the essence of the 2016 gubernatorial race in just two words.
The economy.
“It’s all about the economy, as far as I’m concerned,” Scott said during a recent interview with the Addison Independent. “I think we are at a point where we have to make some choices and I think that focusing on the economy would be beneficial to us in all respects.”
Scott, a Berlin Republican, is in a five-person contest that includes Bruce Lisman, a Shelburne Republican and former Wall Street executive; Matt Dunne, a Hartland Democrat, former Vermont lawmaker and recent Google executive; Townshend Democrat Peter Galbraith, former U.S. ambassador to Croatia and recent state senator representing Windham County; and Waterbury Democrat Sue Minter, a former state lawmaker who most recently served as secretary of the Vermont Agency of Transportation.
It’s a field that will be whittled down to two (major party) candidates during the Aug. 9 primaries. With the 2016 legislative session now squarely in the rearview mirror, Scott — co-owner of Dubois Construction and an avid race car driver — is now punching the accelerator on a campaign that he hopes will allow him to follow in the footsteps of former Gov. James Douglas, a Middlebury Republican.
His economic principles are reminiscent of some of those held by Douglas during his eight-year run as the state’s top executive: 
• Decrease the cost of living to lessen the financial burden on families and businesses. 
• Oppose new fees and taxes. 
• Make state government more efficient, predictable and resistant to “over promising” on services.
“I believe we need to change the culture of government and I think we need to have an administration that encourages all secretaries and commissioners to be part of thinking about the future in terms of the economy and what we can do, in each department, to forward that,” Scott said.
“If we can grow the economy, then we can bring in revenue organically rather than raising taxes and fees all the time,” he added. “That’s the only way that I can see how it’s going to work in the future.”
Like Douglas, Scott pointed to what he believes is a growing perception of Vermont as a state that is inhospitable to businesses and unduly confiscatory when it comes to taxes.
“We should be treating our citizens and our businesses as partners rather than adversaries,” Scott said. “Outside the state, we have an anti-business reputation.”
He advocated for statewide symposia to hear from business leaders on how Vermont could help make them more successful, and called on the Vermont Tax Department to do more to assist constituents in understanding exemptions. Scott cited the recent example of one of his friends, who he identified as a grain store owner, who was subjected to a 40-hour audit that yielded $17,000 in uncollected penalties, taxes and fees. One of the items flagged by state tax officials was gloves, which the business owner assumed were exempt from taxes because they were clothing. The tax officials told him the gloves were taxable, because they were work-related.
The business owner successfully appealed the glove tax, but the Tax Department has since issued a bulletin that gloves will henceforth be taxed, according to Scott.
“His point was, instead of spending 40 hours here telling me what I can’t do, why don’t they spend (less time) telling me what I’m supposed to do?” Scott said.
He advocated for the expansion of a current state program — cultivated by former Gov. Howard Dean — through which businesses can invite Vermont Department of Labor & Industry to conduct on-site, sanction-free visits to counsel them on what could be done to make workers safer.
“That program could be used through all levels of state government,” Scott said.
Should he be elected, Scott has vowed to “never propose — and I will never sign — an annual state budget that grows more than the economy or inflation-adjusted wages did in the prior year.” For example, if the economy grows at only 2 percent this year, Scott said he would limit the proposed growth in the ensuing year’s spending plan to less than 2 percent.
Scott also supports capping the legislative session at 90 days and establishing a two-year budget cycle, changes he believes would force lawmakers and other state officials to work more efficiently and cost-effectively.
His economic strategy also calls for beefing up the state’s workforce and business sector. Scott pointed to statistics showing Vermont’s total workforce shrank by 15,700 during the past six years. That loss represents $750 million in potential wages, he said. It also means that fewer taxpayers are shouldering Vermont’s tax burden, according to Scott.
Of particular note, Scott said, is the number of young people — high school and college graduates — who have been moving out of state into more urban settings. The state must work to reverse that trend, he said.
“We’re losing our youth,” Scott said. “You look at the last census, and we have lost 30,000 people out of this category of 25 to 45” year-olds, he said. “If you think about that, those are the folks who buy homes, have families, use services, buy products and pay taxes.”
That said, Scott promised to support initiatives to prevent the flight of the state’s youth. Those initiatives would include providing more, lower-cost workforce housing — particularly in village centers; tuition reimbursement opportunities; and vocational training in the plumbing, electric and other industries where the workforce is aging out. He is also intrigued by the notion of offering some income tax amnesty for young, working Vermonters to allow them to pay off start-up debt and lay down roots in the Green Mountain State.
“We need incentives to do it,” said Scott.
“Streamlining the permitting process” is a mantra often recited by Vermont politicians during the past three decades, and Scott is no exception. He didn’t identify specific processes to target, but suggested the state provide more “one-stop shopping” opportunities for businesses to apply for multiple permits from a single office.
“We need to think outside the box,” Scott said.
Instilling confidence in the state’s economy will be key to a rebound, according to Scott, who said entrepreneurs and investors are currently “hunkering down” instead of expanding and spending money.
“It’s about restoring that faith and trust that has been lost,” Scott said of the economy. “You do that by getting a few wins.”
Scott acknowledged that the fortunes of business owners are directly tied to a more affordable health care system. He said the state lost a lot of time and money studying a single-payer health care system and developing a Vermont Health Connect website that has failed in its launch due to technical glitches.
“The health exchange has eroded trust,” said Scott, who favors switching to a different model — perhaps the federal health insurance exchange.
“I favor at this point going to something else,” Scott said.
He continues to be in contact with Connecticut officials, who have developed what he called a successful health exchange. Connecticut Gov. Nancy Wyman 15 months ago offered her administration’s help in setting up Vermont’s exchange, according to Scott. After some face-to-face talks, Connecticut officials later said they could have a Vermont health exchange website up and running by November 2015, Scott said.
“It fell on deaf ears,” Scott said of the offer, which he said was opposed by Vermont officials who didn’t want to “admit failure” of the ill-fated, homegrown version. 
“I still think (Connecticut) is an option worth looking at,” Scott said. “It seems to me we should be able to work with other states. We can’t do this alone.”
Scott also weighed in on Vermont’s solar siting bill, S.230, which was vetoed by Gov. Peter Shumlin and then reconsidered during a June 9 special legislative session. Lawmakers elected not to override Shumlin’s veto, but rather drafted and passed a new bill (S.260) that corrected the misgivings Shumlin had about S.230. Sen. Chris Bray, D-New Haven, was a major architect of the initiative, which gives more local control over the siting of solar projects to communities that develop energy plans that are consistent with the state’s long-term renewable energy goals.
“To be perfectly blunt, I was disappointed we got to that point; I didn’t think S.230 was that bad,” Scott said. “I think we probably could have lived with that. Having local input to any siting of some of these developments is necessary. We can’t continue to site without the input, as well as being strategic about where they need to go.”
Scott gave a tepid endorsement of Act 46, the school governance consolidation law. Residents in all four of Addison County’s supervisory unions have either approved school governance unification plans, or will soon be fielding referenda. Orwell residents on June 21 voted a second time — and rejected a second time — on whether to join a new Slate Valley Unified Union School District.
“Prior to Act 46, I heard the cries for help on property taxes … that they needed to be reduced,” Scott said. “Act 46 isn’t something that maybe I would have come up with, but at least it jump-started the issue. We are having those tough discussions, and they are not easy. Act 46 was necessary to at least start the dialogue about ‘how do we deliver high-quality education in the future at a reduced cost?’
“Will it mean closing some small schools?” he added. “Maybe.”
Scott is confident that if elected governor, he will be able to work well with Democratic majorities in both the House and Senate.
“I’ve always been able to reach across the aisle in order to get something done,” Scott said. “If you treat others with respect and make your case and try to get on the same page, I believe we can help one another and can make for a better Vermont.”
Reporter John Flowers is at [email protected].

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