Editorial: Scott and Milne’s focus on trickle-down economics stifles Vermont
Gov. Phil Scott has long run on a campaign pledge to “make Vermont affordable.” Scott Milne, a Republican running for lieutenant governor, is campaigning as Gov. Scott’s sidekick to get “Vermont back to work.”
But has Gov. Scott been able to keep his pledge, and is Milne’s campaign mantra anything more than a feel-good campaign slogan?
Seven Day’s Paul Heintz penned a worthy story in this week’s issue (posted online Oct. 7) that looks Gov. Scott’s record on making the state more affordable, and while he doesn’t encompass the lieutenant governor’s race, many of the same issues hold true there as well.
In the story, Heintz asks Scott directly if Vermonters are better off than they were four years ago, when Scott was first elected. He didn’t deny that many Vermonters were doing worse now than four years ago: “When I became governor, my hope was that when I left office, I would leave Vermont in better shape than when I found it. Then along came COVID-19 and a once-in-a-century health and economic crisis with it, which eroded many of the gains we’d made over the last three years.”
But even before the pandemic hit, Scott’s game plan was questionable. His political thrust, Heintz notes, is to restrain the growth of government and the taxes that fund it. Vermont Democrats, including gubernatorial candidate David Zuckerman, on the other hand, have worked to “raise wages and provide new economic safety nets” (adequate health care, affordable child care, affordable housing, paid family leave) that then allow Vermont families to focus on their careers and families.
Heintz’s well-researched and thorough report also debunks several Republican talking points, including these two:
1) That high taxes are a major cause of flight for lower-and middle-class Vermonters. While Vermont’s state taxes are high compared to other states, the impact on the vast majority of Vermonters is not significant because the taxes on lower-to-middle income families was low compared to the national average, while the cost to higher wealth individuals was high — but they can afford it. The nonpartisan Institute on Taxation and Economic Policy calls Vermont’s taxes as among the “most progressive or equitable” tax systems in the country.
2) That raising the minimum wage would hurt Vermont. Heintz reports that Vermont’s cost of living is about 3% higher than the U.S. average, while its wages are 17% lower than the national average. House Speaker Mitzi Johnson told Heintz that the real threat to affordability “is the slow growth of wages.” Supporting that claim, Heintz reported that a recent RAND study found “that if income distribution had remained steady since 1975, the median fulltime worker in Vermont would have earned $108,00 in 2018, rather than the $60,000 that worker actually made.”
Rather than raise wages to make Vermont more affordable, Scott, who vetoed increasing the minimum wage twice, has focused on cutting taxes and lowering state expenses. But here, too, the focus is misguided.
State Auditor Doug Hoffer told Heintz that Scott’s “affordability” mantra is a “buzzword” to advocate for cuts in state spending, “but for people at the low end, taxes are not a big deal at all.” Rather, the actual cost drivers, Hoffer said, are housing, health care, and for those with children, childcare. “Those are the issues I wish we had more conversations about.”
And those are the issues the Democratic-led Legislature has focused on, only to be met with Scott’s record-setting 20 vetoes over the past four years. What Scott and Scott Milne do promote is a market-driven approach to growth.
Yet Hoffman repeated what many economic experts have long said: “No governor wants to admit this, but they have very few meaningful tools that produce short-term benefits to the economy.” That is, all the hype about putting Vermont businesses “back to work” (aka Scott Milne’s campaign theme) or Scott’s emphasis on growing jobs by lowering taxes is just that… hype.
What political leaders can do is provide social measures that lower living costs (child care, health care, family leave, and establish a higher minimum wage that then ripples throughout the economy.) Leaders can also help establish the primary building blocks for a healthy economy: expanding broadband is critical in today’s tech-driven economy, as is worker training from K-12 and into higher-ed. Democrat Molly Gray, who is running for Lt. Gov., has stressed just that in her appearances throughout the state. She is focused on helping Vermont set the groundwork to develop a new tech economy, as well as setting the stage for a changing new farm economy in Vermont. Simply trying to bring things back to how they were isn’t a viable vision for Vermont’s future. The economy is in constant flux and we need leaders with the imagination and insight to position Vermont to take advantage of those opportunities.
As voters contemplate how to improve the state’s economy over the next decade, the first question they should ask is what approach does each candidate for governor and lieutenant governor take. If it’s heavily focused on pledging to move the economy by some form of vague promise — “making Vermont affordable” or “putting Vermonters back to work” — ask yourself just how well that has worked so far, and chalk it up to a political slogan of little value.
If the candidate has a platform to lower the cost of childcare for those most in need, increase the minimum wage, makes expanding broadband a priority, touts a full-court press into the tech-based economy, and if they are committed to maintaining a first-class educational system and reducing the student loan debt for Vermont students, those are the very real and attainable goals that state leaders can achieve — and that will foster a healthy economy for the long-term.
Gov. Scott has done a very good job on containing Covid-19 and leading the state through this pandemic. He has earned the public’s trust in that regard. But in terms of creating a vibrant economy — even before the pandemic — his approach of cutting expenses to let the marketplace drive the economy is the debunked trickle-down theory that has never worked in the 60 years since President Reagan first coined the phrase. Every businessman knows that it takes wise investments to grow stronger, and that’s what Vermont — when viewed as a business — needs to do.
Scott’s first four years in office has proven that you can’t cut you way to a vibrant economy. We also know that the longer we delay investing in our critical needs, the longer Vermont will languish.
It’s not all gloom. Vermont’s reputation as a place to live has flourished and opportunity for growth is knocking. That makes it all the more important to choose leaders in this next biennium who understand the basic building blocks for growth and are not afraid to shift our spending priorities to make it happen.
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