Business people like to complain about how hard it is to make healthy profits in Vermont. Taxes are high; land development regulations are strict; skilled workers are hard to find. Vermont is too small and too poor to afford the whopping tax breaks other states use to attract major corporations. High housing and utility costs make it hard for workers to afford to stay in the state. The list goes on.
In business surveys, Vermont’s bottom rung status among the 50 states is something of a perennial joke. Kiplinger’s, Forbes, the Tax Foundation and other groups consistently rank the Green Mountain state somewhere between 40th and 50th worst state in the nation in which to do business. Year after year the state’s poor ranking in national business surveys has been the underlying theme of gubernatorial races, with Republicans and Democrats alike bemoaning the state’s seeming inability to overcome its PR problem.
Last month, the American Legislative Exchange Council, a conservative lobbying group, listed Vermont dead last in an economic outlook report called “Rich States, Poor States.” The conservative lobbying group favors states with limited government regulations, low taxes and lax labor laws. Vermont scores poorly on all counts.
Lawrence Miller, the secretary of the Agency of Commerce and Community Development, said the state also came in 50th in 2008. Since then the state’s economy has improved, in his view. “I argue there is something fundamentally wrong with their assessment,” Miller told an audience of business leaders on Monday.
Whether the ALEC assessment was accurate or not, Vermont’s “anti-business” reputation sticks, and it was the main theme addressed by participants in the state’s first economic summit held in Rutland. About 100 company representatives, state officials and representatives from regional economic development corporations met at the Paramount Theater to launch a yearlong effort to create a statewide, comprehensive economic development plan.
How much of that reputation can be chalked up to perception? How much of it is reality? And if it is for real, as one panelist at Vermont’s first economic summit put it, “Do we really want to be Texas?”
Vermont’s tax rates, environmental laws, small size and difficult geography make it harder to do business here, but that’s not all bad, several panelists at the conference told the audience. The Vermont brand — with its cachet as a clean, green agricultural state — helps to sell products. Still, they worried about Vermont’s ability to attract and retain highly skilled workers in the state’s less-than-competitive economic environment. Employees in Vermont often face low pay coupled with a high cost of living.
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.”
The state’s street cred as anti-business and should be a selling point, he said.
“Vermont’s brand is anti-business,” Fusco said. “Now before you get all hot and bothered about that, I want to say Vermont’s brand is anti-business in the way Apple’s brand is anti-tech. Apple has made a fortune teaching people that tech can be warm, and inviting, personal and aesthetic.”
“Vermont is fun, warm, inviting and has values,” Fusco said. “Come here and lead differently, live differently and profit differently. As Paul Costello would say, those are great Vermont values and I think the rest of the world is slowly realizing they want Vermont values.”
Fusco says he has no trouble attracting highly qualified workers, and he lauded the state for its accessible political leaders and clean government.
“We do have challenges. Would we like our taxes to be lower? Sure. Would we like permitting process to be faster and less awkward?” Fusco said.
These oft-cited business problems (all four panelists in the opening discussion of the conference mentioned permitting and taxes as obstacles to success) aren’t the biggest issue for the state, in his view.
Fusco says the state’s perception problem is one thing; the reality is, too many small businesses in the state, which form the backbone of the economy, are struggling. When local companies find it difficult to pay their bills and meet payroll, it has a rippling effect on the rest of the economy, he said.
“We do not thrive if small businesses employing 11 employees or less also don’t thrive,” Fusco said. “That’s our biggest challenge. We have a lot of resources, we need to help people with economic development.”
Other panelists at the summit also emphasized that the state and regional economic development centers can help to foster a better business climate without abandoning Vermont values or compromising the state’s environment.
Steve Arms, founder of MicroStrain Sensing Systems, a Williston-based company that developed miniature digital sensors for machines and biomechanical devices, said finding highly qualified workers was his biggest difficulty. He urged state officials to invest in early childhood education and in internship programs for high school and college students that help young people engage in problem solving and learn how to apply classroom learning to real life situations.
Arms sold MicroStrain to Lord Corp. last fall and is now investing in other companies.
“I’m interested in investing in other people who have great ideas, not to do small things but to do important things,” Arms said. “I think we need to dream big dreams, and do important things. Just because we’re in Vermont doesn’t mean we should think in a limited way. We’re citizens of the world.”
Bill Stritzler, CEO of Smuggler’s Notch, said changing public perception is a tricky business. Branding only works, in his view, when it’s used strategically, and as part of a mission-driven approach. Stritzler said his company changed its reputation as a ski area for high school and college students to a resort that caters to families by fundamentally shifting its services and marketing Smuggs as “America’s Family Resort.”
Vermont could benefit from the same kind of strategic branding, as long as it’s aligned with the state’s values, Stritzler said.
Editor’s note: This story was updated at 6:04 a.m. June 4.
CORRECTION: Joseph Fusco is vice president not CEO of Casella Waste Systems.