Editor’s note: This oped is by Shawn Shouldice, state director for NFIB Vermont.
For years, Gov. James Douglas has been stressing that Vermont needs to work towards improving the business landscape. Taxes are too high and environmental regulations are too strict. In order for Vermont to be competitive, businesses need to carry less of a burden. This call for constructive change has elicited criticism from those who support the status quo; they say it is “dissing” Vermont and bad for business. NFIB/VT believes public attention must be given to policy decisions that will keep businesses alive.
Burlington may be on Kiplinger’s list of Top 10 Best Cities for the Next Decade, but the list is swayed toward the lifestyles and careers of the “Creative Class.” Representative of the majority of Kiplinger Magazine’s readers, the Creative Class consists of “scientists, engineers, educators, writers, artists, entertainers and others.” Furthermore, Burlington is not representative of Vermont as a whole. Hoffmann’s suggestion that business is alive and well based on rankings by Kiplinger and a Joint Fiscal Office study that looks “at taxes residents actually pay” which fails to include property taxes in the study, is not well founded.
Consider the nearly 79,000 small businesses and the manufacturing industry throughout Vermont to show how the business climate is fairing. While the legislature claimed to lower taxes for Vermonters this year, small businesses are struggling to keep employees onboard and their doors open. Tax hikes in recent years are a setback and the Unemployment Trust Fund has been deemed insolvent forcing businesses to shoulder most of the burden and face substantial increases in the taxable wage base; something that members of the “Creative Class,” such as scientists, engineers and educators won’t lose sleep over.
The report Rich States, Poor States, by Arthur B. Laffler offers two separate rankings. First, the Economic Performance Ranking based on a state’s performance in Personal Income per Capita, Absolute Domestic Migration and Non-Farm Payroll Employment over the past 10 years, positions Vermont in the middle of all states at number 22 in 2010. Second, the Economic Outlook Ranking is based on a state’s position in 15 different variables that are directly influenced by lawmakers. A handful of the variables include: Top Marginal Personal Income Tax, the Property Tax Burden (Vermont ranked dead last in this category,) whether the Estate Tax is levied, State Minimum Wage and Workers’ Compensation Costs. For 2010, Vermont is ranked 49th; the second worst outlook position in the United States behind New York. Businesses cannot thrive in such a climate, and new business will not grow.
While small businesses are at risk, Vermont’s manufacturers are beginning to disappear as well. The Vermont Department of Labor issued an industrial projection in 2008 comparing employment from 1988 to 2006 and projecting where Vermont’s industrial employment will be in 2016. These projections, based on the state’s employment data, forecast that manufacturing will decline across the board by 2016. We have already begun to see effects of the amplified taxes and strict regulations forcing manufacturers (i.e. Suss Microtech and Burton Snowboards) to leave Vermont. Manufacturers are leaving and families are as well, along with the disposable income that they have spent to keep Vermont’s economic engine fueled.
As businesses struggle to survive and manufacturers move out of state, costs of doing business in Vermont will continue to increase. While families relocate to find jobs due enrollment in public schools will continue to decrease and costs will continue to skyrocket. Governor Douglas has not “dissed” Vermont; he has merely tried to draw our attention to the issues that will foster job creation and growth in Vermont.
