Vermont’s first economic summit takes on perception problem

Joseph Fusco, CEO of Casella Waste Systems, on a panel at the state's first economic summit, June 3, 2013. Photo by Anne Galloway

Joseph Fusco, vice president of Casella Waste Systems, on a panel at the state’s first economic summit, June 3, 2013. Photo by Anne Galloway

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.

Follow Anne on Twitter @GallowayVTD

Anne GallowayAnne Galloway

Comments

  1. Wendy Wilton :

    Arms’ observation is right on. Our main economic problem is a demographic problem. In the VT labor report for April 2013 vs. April 2012 our state saw a decline of 2,000 employees in the workforce at the same time there was a 3,000 reduction in those receiving unemployment benefits.

    Incentives, including lower taxes and more user-friendly permitting, may have helped prevent the trend if applied years ago. The demographic challenge is a whole new animal.

    • Jason Farrell :

      “Incentives, including lower taxes and more user-friendly permitting, may have helped prevent the trend if applied years ago.”

      Ms. Wilton, maybe you should run a state-wide, grass-roots political campaign with this as your platform and convince our fellow Vermonters to vote for you. Oh wait…

      • Wendy Wilton :

        There isn’t a platform implied in my statement about the demographic challenges. Solutions to solve that problem will be hard to come by.

  2. Don Peterson :

    At a time when every trash hauler in Vermont was complaining about overregulation and state interference, Joe Fusco and the Casellas acknowledged the realities of the marketplace, bought up all the dinosaurs, used the profits to create a recycling program that keeps our state on the “greenest of the green” lists, and went on to become one of the largest solid waste companies east of the Mississippi. You deserve your success.

    To every super PAC with the name “Patriot” in your title:
    Stop whining, and get to work.

  3. Keese Lane :

    My girlfriend and I are educated, trained, and from VT. We would move back in a second if either of us could find jobs. I worked for a small company in VT for a number of years but then I left. Why? ‘Cause there is no money for young people in VT. Quit worrying about the non-working generation and provide some incentives for high-tech and specialized jobs. We’ll move back, pay taxes and handle the rest.

  4. Erhard Mahnke :

    A note on the American Legislative Exchange Council (ALEC): Vermont showing up as 50th in a “study” by this right-wing fringe group amounts to a virtual badge of honor. Lawrence Miller is on firm ground questioning their “findings,” which clearly reflect their ideological bias. Take a look at the state rankings: sorry, but when does Mississippi ever get scored as tenth best at anything good? ALEC is the perennial lobby for some of the most regressive “model” state legislation in the country, from bills limiting workers’ rights and undermining consumer and environmental protections, to voter suppression, reactionary immigration policy (Arizona’s SB 1070), and privatization über alles. If you like the Koch brothers, you’ll love ALEC. Check out http://www.alecexposed.org/wik.

    • Ron Pulcer :

      Erhard,

      I was thinking the same thing … who cares what ALEC thinks! ALEC does not care about the states. ALEC only cares about extracting $$$ from states in terms of more tax breaks, more laxed regulation, and pushing their “model” legislation / bills through the 50 state capitols.

      Here is the corrected link you were posting (I added the “i” at end of wiki).

      http://www.alecexposed.org/wiki

      Here is list of VT legislators who are or have been ALEC members (this is a somewhat outdated list; most legislators don’t readily admit to being ALEC members):

      http://www.sourcewatch.org/index.php/Vermont_ALEC_Politicians

      Note: Rutland County is well represented by ALEC legislators.

  5. Chris Campion :

    The ancient and tired pitch of Vermont “values” is as nauseatingly mundane as the cherry-picking of several businesses that have done well as a way to demonstrate how well the state is doing. For the past 10 years the state has lost as many private sector jobs as it has gained public-sector jobs. We have a labor force participation rate that’s well under the national average. Just those two points alone help to keep the unemployment numbers down, but we’re 36th in median household income, in a state that’s ranked one of the highest (if not the highest) in aggregate tax bite per capita.

    So arguing that we just need to work harder, and hold up an example of a company that hauls waste as evidence that the state’s public policies are working is laughable. Note that IBM isn’t asked its opinion of what it’s like to try to expand in Vermont. Take a walk on the now-overgrown Circ Highway to Nowhere to get an idea of how economic growth works in VT. If you’re looking for a recipe to create an upside-down economy where the state’s largest employer is the state, you couldn’t do a better job than Vermont has done for the past 20-30 years.

    If “Vermont Values” ™, a term that means something different to every Vermonters, means working to keep low-paying jobs in Vermont, then we can do a hell of a lot better. The people who make vague claims about preserving something that is undefinable aren’t the ones staring at a property tax bill, wondering how in the hell they’re going to pay for it, and if they’ll be able to keep their current roof over their heads at the same time.

    Of course, some Vermont Values are more valuable than others. Ask the governor about his real estate transactions and how those encapsulate Vermont Values, and see what kind of answer you get.

    • Chuck Lacy :

      When you use median income as a benchmark, you should use median “tax bite” for comparison, not the average or highest marginal tax rate used in most studies.

  6. Michael Gardner :

    It would have been nice if they had invited a few young Vermonters to testify about the environment for opportunity in VT.

    Oh wait they don’t want to hear the truth, just as Jim Douglas’s council of youth excluded critical young entrepreneurs. They don’t want the truth.

  7. Ron Pulcer :

    I’m curious as to who sponsored this “first” VT Economic Summit. Was it the State of Vermont or businesses or a partnership? Did it include representatives of the educational sector (i.e. getting people trained with the needed skills)? I think this conference is a great idea and hope it would continue. But it would be helpful to know more about sponsorship and who participated (or did not participate or were not invited).

    Was the local food and local agricultural business sector represented at this conference?

    In Rutland the Vermont Farmers Food Center (VFFC) has had a successful first year. This is a bright spot in Rutland’s economy, given the backdrop of drugs and crime in Rutland.

    VFFC opened in the former Mintzer’s Bros. location, and involved much community involvement from businesses and individuals, volunteers and donors in 2012-13. This type of community spirit won’t show up on any ALEC study or the typical state-by-state ranking survey.

    Mr. Fusco pointed out the importance of success of small business sector. Projects like VFFC and local food sector in Rutland County are helping to grow new small businesses.

    http://www.vermontfarmersfoodcenter.org/

  8. Pete Novick :

    “To see what is in front of one’s nose needs a constant struggle.”

    – George Orwell

    The median family income in the US is about $57,000, while in Vermont the median family income is about $49,000. Please see the data at

    http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth/household_income.html

    For the longer term, I recommend the governor and his administration, working in partnership with the private and non-profit sectors, set a goal to grow the white collar workforce here in Vermont by 3 per cent per year.

    Economists are in broad agreement on the impact of adding white collar workers – knowledge workers if you prefer – to local communities. Adding ten white collar workers directly and indirectly leads to the creation of two or more blue collar jobs and there is a lot of data to support this.

    A recent news article noted that Vermont’s high school graduation rates going up, and based on college acceptance rates, Vermont public high schools are doing a better job at preparing high school graduates to be successful in college.

    The irony here is that Vermont does not have the white collar job base to support their return to careers here. In a sense, Vermont is exporting its best and brightest (think human capital) the way it exports maple syrup and other forest products. (Please see Keese Lane’s comment above.)

    Additionally, it’s time Vermont look to our neighbor to the north to help grow our economy. The Quebec economy, relative to the US in general and New England in particular, has been on a tear these past few years. (Remember, Canada did not have a housing bubble or a banking crisis.) Quebec is home to some of Canada’s most successful companies (Bombardier, Hyrdo-Quebec, George Weston to name three) and many of them are looking to expand into new markets. Another Quebec company, Gaz Metro, now owns the company that delivers electricity to your home here in the Green Mountain State. When you pay your GMP bill this month, that money is ultimately leaving the country.

    Many people from wealthy parts of America own second homes here in Vermont. Where do Vermonters own their second homes?

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