Editor’s note: This is the third (and final) installment of a series of transcripts from an interview with Lt. Gov. Brian Dubie, the Republican candidate for governor. In the first, Anne Galloway asked Dubie about his stances on gay marriage, abortion, school district restructuring, Act 60, property taxes, budget cuts, the rainy day funds and raising new taxes. In the second, Galloway asked him about energy policy. What follows is a tweaked-for-clarity, verbatim telephone conversation from June 18 about Dubie’s economic platform.
Vtdigger.org: Do you think the state needs to invest more money in the Vermont Employment Growth Incentive program? Why or why not?
Dubie: The best job creation incentive — and this is from multiple Vermonters across the state — is to work toward lower taxes. That’s the best way we can spur job creation is to give relief to small businesses in Vermont. We know from looking at the data that small businesses in Vermont are the engine of our economy, specifically women-owned businesses. So with that in mind — and you heard it in my kickoff — Joanne, the cheesemaker in Bennington, said, if my taxes were lower I could buy more milk, hire more Vermont workers, and make more mozzarella cheese and sell it to people who want to buy it. I hear the same things from big companies like Green Mountain Coffee, dealer.com, General Electric, and it applies to dairy farmers, and small, medium and large businesses.
We need to move Vermont in a more competitive position. And then some of the ideas I’ll present with more clarity going forward (include) investment tax credits, research and development tax credits, eliminating the cap on VEGI incentives because that pays its own way with new economic activity, continued support for VEDA (Vermont Economic Development Authority), expanding the immigrant investor program, the EB5 program.
I go back to the best way that we can meet our commitments to education and pay for services and make the investments and maintain our commitment to the environment is work to grow. And we can do that by cutting taxes and red tape.
Vtdigger.org: What taxes would be cut? How will the growth pay for social services? How do you balance that?
Dubie: So this is what I’ve done. We looked at other states on the aviation sales tax, and we used to charge an aviation sales tax when a part was put on at an airport as part of maintenance procedure. It took us a couple of years. We worked with the Legislature, we looked at the data that said we were losing economic activity to Quebec and other states. The Legislature after a couple of years repealed the tax. A company in South Burlington said that one change allowed them to get a five-year, $6 million contract. Heritage Flight hired six new employees as a result of the tax change because they are currently repairing aircraft from Texas. They attribute the tax change as allowing them to be competitive.
So there’s an example of where we have cut taxes, and we have created jobs and new activity.
As the campaign moves forward I will provide more clarity about what specific taxes, how I’m going to pay for them, and look you in the eye and say this is how I’m going to pay for this pro-growth agenda with clarity.
I look forward to doing that, but the principal is pretty clear.
Vtdigger.org: Just so I understand, part of the scenario you just painted with what happened at Heritage is, you’d have six employees paying income taxes and that helps to balance the equation.
Dubie: Those are six jobs created as part of an enterprise that didn’t occur before. Exactly right. Now there are six people paying income, sales and property taxes. Were it not for (removing) the disincentive for those jobs, those jobs wouldn’t exist. It’s a competitive world out there, and the theory is, let’s give the Vermont workers the tools they need to compete.
I’ll give you an example — General Electric. People say GE is a big company. The plant manager said to me, Brian these are the best workers I’ve ever seen in any facility in GE. They’re the most educated, most flexible and the most motivated workers I’ve ever had. Brian, the property tax I’m paying for this facility when I benchmark it with other facilities around the country is limiting my ability to bring new jobs to Rutland, Vt.
I’m not saying it’s easy, Anne, but that’s what I’m told is, if we work toward making taxes more competitive with other places, giving Vermont workers the tools they need to compete, I could repeat this with Green Mountain Coffee, even as I look eyeball to eyeball with Dealer.com. It’s a competitive world out there we need to give Vermont workers the ability to compete and to grow.
Vtdigger.org: It’s tricky, though. When I talked to the accountant at GMCR (Green Mountain Coffee Roasters), she was saying taxes in Vermont are higher, and she was comparing us with Tennessee, which doesn’t have an income tax. So where do you go? How far do you take it?
Dubie: When I talked to her boss, and we talked about growth opportunities, he said we’ve got another huge facility in Tennessee, and we have really growing opportunities, and there’s no income tax in Tennessee, and I can tell you where we’re thinking about growing, Brian.
Vtdigger.org: On the other hand, then, why don’t they become the Smokey Mountain Coffee Roasters? I mean their brand is Vermont, so at what point …?
Dubie: He’s suggesting we’re not going to leave Vermont, but I can tell you where we’re going to grow.
The point is, if we’re 47th in the country in business friendliness, according to Forbes, and the American Legislative Exchange Council ranks us 49th in the country in terms of economic growth, and The New York Times says our social services are first in the country, I’m not suggesting we go to 50th. I’m just suggesting we need to make some changes that make us more competitive. We don’t want to be the least generous in benefits, and we certainly can’t be the most business friendly.
We do have this great reputation. We have so many things going for us. We’re the healthiest state in the country, the most educated (some would say the smartest state), one of the lowest crime rates in the country, this beautiful environment, this great quality of life, great recreational opportunities. We just (need to) make some changes to make Vermont competitive, and we need a leader, a governor, someone who can look long term.
I think of the silver tsunami, the fact that the over-65 population is going to double in 20 years and we’ll be the oldest state in nation. When I think about our commitments to teachers and state employees, it just causes me to say we need to make decisions that make Vermont more competitive, and do what we can to work with our outstanding Vermont companies to give them the tools, so that our Vermont workers can compete and have a strong future going forward. I think that’s what leadership is, and I think that’s the most compassionate thing long-term is, to make sure things are sustainable.
George Chandler, CEO of Hubbardton Forge, great business leader, great guy, great company, said to me long ago: Brian, you can’t be pro-employee if you’re anti-employer. We’re in this thing together, and we need to make sure we work together to make sure Vermont is as competitive as we can by making sure our workers can compete, because they can on those other matrix – they are educated, dedicated and motivated. Let’s just make sure our tax structure and our regulatory environment allow them to compete.
Vtdigger.org: Do you think the state needs to invest more money in Regional Development Corporations? Why or why not?
Dubie: I don’t think we’re talking about investing more in RDCs, but I think they’re a critical part of our future going forward. I’ve met with a number of them recently. RDCs have the best sensitivity to what’s happening in their region. We need to make sure there is a unity of effort between RDCs and communities and make sure everybody is working together, singing from same hymnal, developing the synergy that’s so important to market our state and grow our economy. That would be my commitment as governor. We do have the budget reality we face. My spirit would be to work collaboratively, and you can do that best by working with RDCs.
The numbers tell us small businesses are the growth. We need to make sure our first priority is retaining small business in Vermont, but I have as lieutenant governor, and I would as governor, work with everybody. There’s not an either or. The fact is, big companies help support little companies.
I have put together a suppliers conference with Plasan, Northern Power, where we’ve brought together small- and medium-sized companies to expand the supplier base in Vermont. Buying local isn’t just buying fruits and vegetables — which is important — buying local is Northern Power buying more components from Vermont.
I’ve done a supplier chain at Northern Power. We just had almost 200 people in Springfield, Vt., and huge excitement around Vermont Aerospace and Aviation Association, which I founded with Sen. Leahy, who’s my honorary co-chair.
Vtdigger.org: What role do you see agriculture playing in the Vermont economy?
Dubie: I have a 20,000-tap sugaring operation with my brother. I understand the importance of our Vermont agriculture sector for our economy. We have a million a day in dairy and $270 million a year in maple, to name a few, but more importantly, it’s who we are as Vermonters. The ag economy is the economic engine of rural Vermont.
It’s ugly right now with 1970 milk prices and 2010 costs. I’m working closely with the congressional delegation to find a fix for a fair price for dairy, which is the primary component of our ag sector.
