State policy choices make a difference

By JACK HOFFMAN, VtDigger, October 17, 2014         

Jon Margolis did a nice job of popping some campaign balloons earlier this week with his column about the Vermont economy. Popping campaign balloons, after all, is both the job and the fun of being a political columnist. He set the record straight and drew a few laughs by letting everyone in on the little secret that Vermont’s economy is influenced much more heavily by the national economy than by political leaders in Montpelier, even the one in the governor’s office.

And it’s true that there isn’t much one governor can do that will reduce the poverty rate or create jobs right away. The previous governor, Jim Douglas, campaigned with bumper stickers reading: Jim = Jobs. But his eight years in office were bracketed by recessions, and Vermont had no more jobs the day he left office than when he came in.

That’s not to say, however, we should leave it all to fate or the vagaries of Washington. There are policies Vermont can adopt to improve people’s well being and make the state an attractive place to work and live. Public Assets outlined some of these policies its State of Working Vermont 2012 report.

Studies, like the ones analyzed by economist Jeffrey Thompson in his report “Prioritizing Approaches to Economic Development in New England,” show that state fiscal policies—how states raise and invest their tax dollars—can make a difference. As we said in that 2012 report:

“A state can make itself conducive to job creation by investing in public structures like transportation and telecommunications infrastructure, good schools and health care, a clean environment, and public safety—that is, by becoming a desirable place to live and work. As federal policies move the economy toward recovery, the state is more likely to share in it.

“This is not the same as ‘attracting’ business to the state. Contrary to common belief, most new businesses and jobs are not imported. Good public amenities can bring people to live here who end up starting businesses. A people-friendly environment makes recruiting employees easier. But new jobs are primarily the result of expansions of already going concerns in the state or startups by people who already live here.”

Such investments are not quick fixes. The Legislature can’t pass a bill that will lower the unemployment rate by the next election cycle, and poverty won’t respond to executive orders from the governor’s office. To attract a younger workforce and young families who can increase our school enrollments, elected officials need to commit to long-term policies and provide adequate resources—both staffing and funding—to get the job done.

Unfortunately, with the warnings about more budget cuts next year and the clamor for school consolidation and cost-cutting, we run the risk of undermining the very things that now both make Vermont an attractive place to live and provide opportunity for the next generation. And that’s not good for jobs.