Story + video: Racine unveils ‘realistic’ economic plan

Doug Racine

MONTPELIER–With just eight days left before the Democratic gubernatorial primary, Doug Racine released his economic plan on Monday. The proposal, he said, is “realistic.” It doesn’t, in his view, include big “empty promises” that the state can’t afford as it struggles to emerge from the worst recession in decades.

“The No. 1 issue in this campaign has been the economy and where the economy is going,” Racine said. “For me, it’s about opportunities and how we increase opportunities.”

Racine told reporters at a press conference on the Statehouse steps that working-class families in Vermont have seen a drop in wages and a decline in their ability to improve their quality of life over the course of a generation.

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The state senator and former lieutenant governor described his own family as working class, and he outlined the opportunities that were available to him and his siblings as they grew up.

“We knew if we worked hard we would be able to get ahead,” Racine said. “What I see when I talk to young families is the sense that this economy is not the same. The opportunities are not (there). …We have a lot of work to do to get back to where we were a generation ago, or even just a few years ago.”

Racine is the last of the five candidates in the Democratic bid for governor to present an economic development proposal to the public. Like the plans put forward by his contenders in the race, Racine’s does not come with a price tag. He said funding for his proposal would come from existing sources of funding for the state’s investments in job creation, marketing and other economic development programs offered through the Agency of Commerce and Community Development.

Most of his initiatives, he said, won’t cost more money. “I’m talking about shifting priorities and using state resources such as the capital and transportation budgets to make investments,” Racine said. “We can’t continue to cut our way out of this.” Broadband, he said, is just as important as roads and bridges. The problem, he said, is that the state hasn’t been willing to make the necessary investments. He pointed to the recent news that the federal government has given VTel $116 million for broadband expansion as a good sign.

The state faces a $115 million deficit in fiscal year 2012. According to an analysis from the Vermont Department of Finance and Management, known as the Unified Economic Development Budget (UEDB), the state was slated to spend $33 million on economic development activities across seven agencies and departments last year. Racine has said repeatedly that he is willing to tap about half of the state’s approximately $57 million in stabilization funds to help fill the state budget gap. Given the fact that there will be no new money from the federal government in 2012, and the state won’t have the capacity “to borrow our way out of this,” he said, using some of the rainy-day money set aside for emergencies is realistic. “There needs to be a willingness to look at that, and then we need to reset the priorities,” Racine said.

“It (the plan) is a recognition of where we are with the budget crisis,” Racine said. “We are spending a lot of money on economic development. Perhaps we aren’t getting the biggest bang for the buck.”

Racine said the UEDB report was very weak this year and didn’t provide an adequate analysis of expenditures for tax incentives, marketing and advertising. The state, he said, doesn’t have “a lot of new money to spend,” and he wants an economist to analyze the effectiveness of the state’s programs and shift “$40 million” in state funding for job creation to programs that get results. “Let’s maximize the use of the funding for job creation,” he said.

A management team should work across state government to develop job creation initiatives, he said, rather than in a few isolated departments and agencies. Vermont is a collection of local economies, he said, that rely on regional planning commissions and regional development corporations to work with state business leaders.

“We need state government pulling in one direction and the government taking the lead so that everything we do is pointing to a strong economy,” Racine said.

Small businesses, he said, have gotten short shrift under the Douglas administration, even though such companies create much of the job growth in the state. Racine, who has worked as a finance manager for his family’s business, Willie Racine’s, Inc., a Jeep dealership, said he believes the state needs to do a better job of working with small businesses. Too often, he said, the owners of companies complain that “there is nothing there to help them out.”

Education, too, has suffered from mission drift under the Douglas administration as the system has failed to provide the skills students need to take jobs in emerging high-tech fields in Vermont, according to Racine. Children need more access to math, science and technical skills so that they can be matched with employers who need high-tech workers.

Racine also told reporters that the state needs to reform the environmental permitting system. He said state officials are stretched thin, and they don’t have the resources to help small businesses through the permitting process. He would create an ombudsman position that would allow for one-stop shopping for businesses that are applying for state and local permits, which are often, he said, in conflict because the rules vary from town to town. The process needs to be “predictable, efficient and more certain than it is today.”

State workers are faced with providing less than optimal services to Vermonters because of the elimination of more than 600 positions and woefully inadequate computer systems, Racine said.

Vermont, he acknowledged, doesn’t operate in a vacuum. He said the state can set the stage for recovery, but if the nation and the world economies remain depressed, revitalization will be difficult to achieve.