A new tune from some Vermont business leaders

For years we’ve heard the same refrain from much of the Vermont business community: Taxes are too high, and there’s too much regulation. They’ve chided the Legislature about the state’s poor business climate and called for austerity. Politicians were quick to parrot the message or risk rebuke as taxers and spenders.

The problem is that the state needs to make smart investments in people, programs, and infrastructure so everyone can enjoy prosperity. Austerity does not lead to prosperity.

But recently there are some in the Vermont business community that are singing a new tune.

On May 30 VPR aired a commentary by Bill Schubart. The former Vermont Business Roundtable chair took Governor Shumlin to task for turning to “the old canards of fleeing wealth, tax burden, and ‘job creators.’” He pointed out that “most research shows that tax burden doesn’t seem to have much of an impact on state economies.” And he noted that “the durable myth that the rich spend their wealth creating jobs has long since been debunked.”

Schubart is right on all counts. Vermont has seen no flight of the wealthy. In fact, over the past two decades people moving to the state have had higher incomes than those who leave. Reduced taxes and regulation simply puts more money in the pockets of those who have money.  It doesn’t create better opportunities for the rest of us.

Then VTdigger ran an item about the state economic development summit that was held in Rutland on June 3.  “Joseph Fusco, vice-president of Casella Waste Systems, a multimillion-dollar, publicly traded company based in Rutland, said, ‘I’ve got to tell you, life in Vermont for our business is really good; it’s great to be here,’” according to Digger. He added: “Vermont is fun, warm, inviting and has values.”

It’s refreshing to hear a business leader talking about the unique opportunity that Vermont offers for business, instead of complaining about how we’re not like other states.

That message also came through in an opinion piece by Vermont Business Magazine Editor Tim McQuiston, aired on VPR a few days later on June 7.  McQuiston pointed out that the latest annual Rich States, Poor States report by “Reagan Era supply-side economist” Arthur Laffer once again gives Vermont the lowest economic outlook ranking among the 50 states. What was interesting about McQuiston’s commentary, however, is what he did not say.  He did not start with the Laffer report to bemoan—again—the sorry state of Vermont’s business climate.

Instead, McQuiston dug a little deeper, looking at U.S. Census data and comparing Vermont with Mississippi, which Laffer ranked among the 10 states with the best economic outlooks. “In nearly every economic category,” McQuiston commented, “Vermont is much better off than Mississippi: unemployment rate, per capita income, home values, poverty rate, you name it. So who cares if one place is, on paper, a ‘richer’ place to do business if the outcomes are so poor?”

Taxes are how we pave the roads we drive on, educate our kids, and provide the health care we all need. Regulation protects us by ensuring clean water, safe food, and fair health care and utility rates.  These are necessary investments. If we fail to make them, our economy—and our people—suffer.

These three opinion leaders are stepping out and saying what is rational and true. If they represent a shift in the Vermont business community, there is hope that we can leave the rhetoric behind and begin to work together to get the economy rolling again.