Politics

Scott whacks Dems on economy in livestream address

Phil Scott
Lt. Gov. Phil Scott. Photo by Erin Mansfield/VTDigger

Editor’s note: Erin Mansfield and Elizabeth Hewitt contributed to this report.

While other candidates for governor issued statements to the media in response to Gov. Peter Shumlin’s State of the State address Thursday, Lt. Gov. Phil Scott reached out to digital natives in a livestreamed speech to supporters (and issued a comment to the press).

Scott, a Republican candidate for governor, took a page from his campaign speech and spoke directly into the camera for about 10 minutes and then engaged in a question and answer session with Yvonne Garand at his campaign headquarters in Middlesex.

The livestream was held at the same time as Donald Trump’s rally in Burlington. State Republicans aggressively distanced themselves from the New York City candidate for president who they have described as a “bully and a bigot.”

The lieutenant governor briefly outlined his personal history and talked about his “Everyday Jobs Tour” before he launched into his stance on issues.

Scott underscored his own platform for revitalizing the economy instead of countering Shumlin’s speech directly, which was a rundown on the governor’s accomplishments and did not broadly address economic issues the state faces.

Scott said he would rebuild the manufacturing sector, which employs about 10 percent of the state’s workforce and pays 31 percent higher than the average wage. He ticked off a list of obstacles for manufacturers, including high electricity costs, high taxes and an unpredictable regulatory environment, that he would address. In addition, Scott would restore a 30 percent research and development tax break for manufacturing companies.

The Legislature’s interest in a carbon tax, Scott said, would drive away businesses from the state.

“It has the same feeling as the single payer conversation, which was allowed to continue for too long,” Scott said. He described the carbon tax as a distraction from lawmakers’ focus on the state’s fiscal foundation. “We need to stop it in its tracks now,” Scott said.

The state has enjoyed significant benefits from the renewable energy industry and captive insurance, he said. “Imagine if we had a governor’s office that treated every sector in the same way,” Scott said.

He pointed to the state’s stagnating population as an issue he would address head on. Scott said he wants to encourage 5,000 people in the 25 to 40 age group a year to move to the state with targeted investments in programs for working families and first-time homebuyers.

Scott criticized the Legislature and the governor for increasing the state budget too quickly. “When they say balance the budget, what they’re doing is just raising taxes,” he said. “Last year they raised taxes and spent more money.”

The state must keep budget growth in check, he said. “I would build budget by looking at what the growth was last year, and I won’t sign a budget that grows faster than the previous year,” Scott said.

Response from Lisman, Minter and Dunne

Bruce Lisman
Bruce Lisman. Photo by Erin Mansfield/VTDigger

Bruce Lisman, a former Bear Stearns executive who is running against Scott for the Republican nomination, said in a statement that Shumlin “did his best” to “put a positive spin” on the changes to education and healthcare that have happened under his watch.

“But Vermonters know the reality is different, because they see it in their own lives,” Lisman wrote. He challenged Shumlin’s record on job creation, and criticized Act 46.

Matt Dunne, a Google executive who is seeking the Democratic nomination to replace Shumlin, listened to Shumlin’s speech in the lobby in front of the entrance to the House.

“I think what Gov. Shumlin has outlined is what he has made his signature, which is coming out with bold positions particularly on social issues,” Dunne said. He cited Shumlin’s proposals on divestment and marijuana legalization.

Matt Dunne
Democratic gubernatorial candidate Matt Dunne speaks at the Digger Dialogue. Photo by Elizabeth Hewitt/VTDigger

Dunne said the caps included in the Act 46 education law were a “distraction” and said he was glad the governor wants to repeal or delay them.

Sue Minter, the former secretary of the Agency of Transportation, is running against Dunne for the Democratic nomination for governor. She said she agrees with the governor’s decision to highlight economic development in his speech, nodding to his Step Up proposal that would provide one semester of college education to low-income Vermonters.

“As we grow the economy, we have to understand how the economy is supporting our working families,” Minter said.

Sue Minter
Sue Minter. Photo by Erin Mansfield/VTDigger

Meanwhile, Minter said that she stays firm on her position on marijuana legalization, emphasizing the need for a system of regulation, an education and prevention component, and driver safety.

With regard to Shumlin’s proposal to limit the number of opiate painkillers doctors can prescribe for minor procedures, Minter said she is “cautious about telling doctors what they can and cannot do” but that she recognizes “that our opiate challenge is huge.”

Democratic candidates for Lieutenant Governor react

Sen. David Zuckerman, D/P-Chittenden, is seeking the Democratic nomination for lieutenant governor. He called for marijuana legalization in 2015 and introduced a bill that no Senate committee took testimony on.

Zuckerman said he generally supports Shumlin’s proposal to legalize marijuana, but the main difference is that Zuckerman wants marijuana edibles to be legalized at some point, and Shumlin said they should remain illegal “at first.”

Zuckerman four of the five caveats that Shumlin said need to be included in a legalization bill are in his bill: keeping marijuana from minors, funding law enforcement to keep adults from driving under the influence, taxing marijuana at a low enough rate to wipe out the black market, and using revenue to prevent addiction.

He said marijuana edibles are “a topic we need to discuss. Whether it’s delaying it or prohibiting it entirely, that’s up for discussion. I do think if we’re talking about bringing an underground economy above ground and regulating it properly, we might just be kicking the can down the road on that one.”

Zuckerman described four main ideas for directing revenue from marijuana legalization: treating opiate addiction, funding local law enforcement, funding higher education, and a creating special account to fund capital projects. He said the state should not depend on marijuana revenue to fund regular operations.

Zuckerman called himself one of the leaders in the movement who suggested to Bill McKibben, the founder of 350.org, that the state divest its own funds.  “There’s no moral or economic value to remaining invested in (fossil fuels),” he said.

Rep. Kesha Ram, D-Burlington, who is running against Zuckerman for the Democratic nomination, said she thought Shumlin’s address was “far-reaching.” She supports many of his proposals but said he did not spend enough time talking about property taxes.

Ram said she supports his call to divest state pension funds from the coal industry and his plan to legalize marijuana with five caveats that include putting revenue toward addiction treatment and keeping marijuana away from minors.

Ram recently put in a request for drafting a bill on divestment from coal, and had “no idea that the governor was going to lend his support to that,” she said. With regard to marijuana, she said, “It’s time to have that conversation.”


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  • William Geller

    with the lower cost of natural gas and other fuels I would think that Vermont should be able to reduce electricity charges. When will we start hearing any reports on why this is not happening ?????

    • Wendy Wilton

      VT’s cost for electricity will continue to soar as we add more renewable energy to our portfolio according to the plan passed by the legislature and signed by Shumlin years ago. It is expensive to produce energy from these sources, even with the subsidies. Also, these are not robust, steady sources of power. The smartest thing the state could do would be to develop a gas power plant to provide base load power to offset the variability of renewables and complement the hydro we buy from Canada. That could result in future savings in energy cost increases. Otherwise, we will be forever at the mercy of HydroQuebec and the grid, and stuck with a plethora of aging windmills and solar panels 20 years hence.

    • Kathleen Keenan

      The actual price of gas in Vermont should be really looked at. All of the funds we have rolled into our rates

  • Jay Eshelman

    Re: “Scott said he would rebuild the manufacturing sector, which employs about 10 percent of the state’s workforce and pays 31 percent higher than the average wage.”

    A Vermont school teacher earns on average about $30 per hour, not counting ‘Cadillac’ healthcare and retirement benefits. As a Vermont manufacturer, I can’t come close to paying that much as an average manufacturing wage, let alone pay 31% more than that. And the teacher’s union is asking for a 2.8% salary increase and 8% increase in benefits.

    John McClaughry reported: ” Vermont ranks eighth in pretax wage equivalent of the welfare benefit package, at $42,350. This number, representing what the household would have to earn to pay for the benefits after taxes, has increased by $10,770 since 1995, by far the largest increase of any state.”

    http://ethanallen.org/commentary-vermonts-welfare-cornucopia/
    It’s hard enough for manufacturers to compete with welfare, let alone public sector salaries paid by taxes. Mr. Scott’s platform sounds good….but the devil is in the details.

    • Paul Richards

      “A Vermont school teacher earns on average about $30 per hour, not counting ‘Cadillac’ healthcare and retirement benefits. As a Vermont manufacturer, I can’t come close to paying that much as an average manufacturing wage, let alone pay 31% more than that.”
      Have no fear Jay. After bernie and the rest of the liberals get elected, public sector unions will be expanded to the maximum. Anyone remotely close to providing labor for the benefit of the state will be unionized. Furthermore, manufacturing businesses will be forced into unionizing their workers so, you see; everyone will be happy and you WILL be able to pay those wages and benefits because the liberals say so. They will be “living wages” and all will prosper and be happy once and for all! If by chance that does not work out for you, have no fear; the government will take over that portion of industry and you can work for them. You may have to move to what is now known as another “country” though because once the statists have successfully completely destroyed our constitution and bill of rights, much of our manufacturing will be done in other “countries” where people are used to submitting to dictators and having no rights.

  • Keith Stern

    I’m still hearing the same old rhetoric and no specifics on how Vermont will become more affordable and the business climate will get better.

    • Jay Eshelman

      As I mentioned in a recent ‘Commentary’ and pointed out in a recent ‘Join the Discussion’ remark. Our politicians should start with ‘tuitioned’ School Choice vouchers for all Vermont parents.
      1. Education costs and commensurate property and other taxes will begin to decrease.
      2. Students will have the opportunity to attend schools that meet their individual needs and, therefore, be better educated….translating into a better trained workforce.
      3. Families will come to Vermont to take advantage of education choice instead of leaving Vermont because of a stifling State School bureaucratic monopoly.
      4. As property taxes and other taxes decrease, property equity values will begin to increase, providing another incentive for people to move to Vermont instead of leave it.
      5. A better workforce and lower taxes will entice businesses to locate in Vermont without the need for incentive subsidies (e.g. Global Foundries) paid by, you guessed it, the taxpayers.
      6. More business and job opportunities will entice our children to continue to live in Vermont.
      7. On a more esoteric note, School Choice will create incentives for parents and their children to realize that they control their own destinies and should take responsibility for their choices rather than blaming everyone but themselves for their current demise.
      8. And, relating to that esoteric note, with School Choice, Special Education rolls will begin to decrease, many students will no longer be told to limit their expectations or expect special assistance because they are labeled with, among other stigma, a ‘work anxiety’ or ‘behavioral disability’ classification putting them on the fast track for Social Security Disability and other social service subsidies (welfare) after they drop out or even graduate.
      Yes…when I consider the root cause of our current woes, it all comes down to education. Allow parents and their children the opportunity to choose their destiny and change the world.

    • Thomas Gauthier

      Looking into the details. 1. The police force has swelled faster than the population rate; oh wait a second, our population is declining so why would we need more police officers? 2. Why is Vermont not instituting tolls on our interstate and connector highways, those tolls would help fund our expensive road systems and with proper equipment (transponders; think ezpass); allow the state to not strangle the locals with these tolls and pass them onto the persons traveling through Vermont. Stop forcing the residents to foot the bill for persons passing through our state; let those who use our roads Pay their fare share (No pun intended).

  • Kathy Nelson

    It’s a sad state of affairs in the democratic party.

  • tom burke

    All the candidates offer sizzle and no steak. No specifics. I will work on …. How about declaring some goals? e.g; I will meet with GMP, BED, and others . and reduce electricity costs by 40% for business…or I will copy New York’s open for business campaign here in VT.

  • Doug Hoffer

    We all want to improve the economy, including manufacturing. But with all due respect to Lt Governor Scott, Vermont is not an outlier in this area. Here are some facts. First, all but six states have lost manufacturing jobs since 1990. The northeast has been especially hard hit, but Vermont has fared better than all the other states in the northeast.

    Percent change in manufacturing jobs, 1990 – 2015 and national rank (BLS, CES)
    -27.9% VT 24
    -29.2% NH 27
    -44.7% ME 43
    -45.5% CT 45
    -46.9% MA 46
    -53.1% NY 49
    -55.2% RI 50

    If Vermont state policies were particularly bad or “anti-business,” we would not be in the middle of the pack nationally.

    Second, Mr. Scott mentioned electric rates. According to the DPS, Vermont’s industrial rates are the second lowest in New England. In addition, I’ve seen no data that supports the idea that electric rates are an important factor in retention, attraction, and expansion.

    For example, according to national data from the Census Bureau’s 2013 Annual Survey of Manufactures, the cost of purchased electricity is less than one percent of the total value of shipments for more than two-thirds of the manufacturing industries present in Vermont (and it’s only higher than 2% for 5 of 72). Therefore, even if one could wave a wand and reduce electric costs for manufacturers by 10%, the practical effect for most industries would be savings of less than one tenth of one percent of the value of shipments.

    I spent a lot of time thinking about these issues as a policy analyst before becoming State Auditor. I would love to see a robust discussion about economic development during the upcoming campaign, but if it is a continuation of the debate we’ve had for the last few decades it will go nowhere. Many of the underlying assumptions are simply not supported by the facts and – frankly, are just talking points advanced by self-interested parties.

    Of course large businesses want lower costs and lower taxes. But will that actually produce more good paying jobs? As a rule, lowering costs or taxes for one group means increases for another because the evidence is clear that trickle down simply doesn’t work. What are the alternatives? Every dollar spent on one strategy is a dollar not spent on something else. How are we to choose?

    It’s long past time that we had an honest conversation about all of our economic development policies and programs and insist upon a rigorous analysis of the performance of every single one. So let’s engage on this critical topic, but let’s do so armed with facts, not sound bites.

    • Rita Pitkin

      Thank you Mr. Hoffer. Key words: HONEST CONVERSATION. Would be nice.

    • Steve McKenzie

      I completely agree a factual conversation regarding economic development issues is long overdue and critically important, starting with the Governor’s repetitive citing of the 3.7% state unemployment rate (“U3”), and the claim of adding “…17,600 new jobs in the last five years…”.

      From the US Bureau of Labor Statistics (data.bls.gov):

      VT Labor Force – Employment = Unemployed Unemp Rate
      Oct-10 359,116 337,752 21,364 5.9%
      Oct-15 345,250 332,468 12,782 3.7%
      Change (13,866) (5,284) (8,582) -2.2%
      -3.9% -1.6% -40.2% -37.3%

      With a flat state population over the period, the labor force has decreased by nearly 14,000? The ‘why’s’ behind that drop are critical to identify, understand and discuss.

      Total employment has dropped by over 5,000. Maybe 17,600 new jobs were actually created, but nearly 23,000 were lost for the net change of (5k)?

      Depending on which resource is reviewed, an unemployment rate in the 3-5% range is generally considered to indicate full employment. Based on the BLS data, Vermont appears to have moved towards ‘full employment’ not by a growth in the number of employed (as implied in the governors communications), but by a drop in the labor force. If truly nearing full employment, wages would tend to increase as employers seek out increasingly limited workers: employer-generated wage growth pressure would not appear to be an issue plaguing Vermont.

      The broader U6 unemployment rate, which takes into account persons currently not looking for work, is 8.4% in VT. The BLS numbers suggest this may be the better of the two to consider when discussing economic development issues in Vermont. It would also be prudent to understand and consider the implications of the information from John McClaughry in provided in Jay Eschelman’s comment above, indicating that Vermont’s welfare benefit package equates to an hourly wage of ~$21.

      Why has the Vermont workforce apparently decreased 4% in the last five years given flat population? I don’t believe focusing on a 3.7% unemployment rate and “17,600 new jobs” properly reflects the actual underlying issues challenging economic growth in the state.

      • Doug Hoffer

        All good questions. First, I agree that U-6 is a better measure of labor underutilization. But here too, Vermont looks comparatively good. At 8.4% Vermont is tied with New Hampshire for the lowest in New England and tied for 9th best in the entire country.

        Second, “employment” includes self-employment, which is always volatile in challenging times. After losing a job, some folks attempt self-employment to bring money in while awaiting a new job. As job opportunities increase, many self-employed take jobs. This makes sense for most because self-employment is not always as great as we sometimes imagine.

        For example, you get no benefits and have to pay the employee and employer payroll taxes (13.5% right off the top before income tax). It is not common for self-employed folks to work full-time so unless they have another solid wage earner in the household, most people prefer jobs.

        In any case, it is not accurate to say that 23,000 jobs were lost because most of them were not “jobs” per se. According to the Dept. of Labor (CES), there are 17,400 more jobs now than in Nov. 2010 (14,900 in the private sector).

        As for the labor force, my initial thought is the aging of the population. According to the Census Bureau estimates, the number of Vermonters 65 and older grew by 11,241 from 2010 to 2014 (2015 is not yet available). And that doesn’t count those elders who have retired to other (warmer) states.

        We know that a fair number of elders continue working so that’s not all that is going on. But some of the figures are being conflated so the situation is not quite as dire as some suggest. Nevertheless, all these subjects deserve close scrutiny and careful analysis. Thanks for your thoughts.

    • Mark Keefe

      On 1/4/16 in Digger Mr. Lisman wrote “We need to coordinate our economic and workforce development efforts across the state so we are using our resources most effectively and providing better support to both employers and employees.” Based on your last paragraph; it would appear you are both saying the same thing. Maybe there is some common ground on this issue between you two.

  • John Grady

    Become a right to work state.
    Create The Bank of Vermont.
    Reduce school spending over 50%
    Overhaul Act 250 so it’s a 90 day process.

    Have state owned enterprises like a prefab housing plant to increase the supply of energy efficient work force housing.

    Create a state owned supply warehouse for towns and government agencies to buy supplies from.

    The first step is for people to accept the fact they have been brainwashed and indoctrinated into The American Culture threw propaganda and break their minds free of the prisoner like mentality they have become institutionalized into. People are scared to set foot off The Plantation they have lived on all their lives and leave it behind for something new. The rugged Pioneer Spirit that founded this country has been replaced by fear of the unknown. People totally close minded to change because they are scared, so they cling to the failed post WW2 American Culture.

    http://vtdigger.org/2016/01/09/john-moran-delivering-the-american-promise/

    John Moran pointed out many where left out of the 1950’s American Dream. People don’t see the negative part like America was building housing projects and than people where rioting in the streets during the 1960’s because of being left out.

    Today people have no vision of anything but a 40 hour work week, a k-12 school system with summers off. America has changed nothing since the 1950’s and acts like the perfect economic and social conditions where created after WW2 while ignoring evidence that proves other wise, like total failure by the 1970’s and than 35 years of borrowing to fund a lifestyle that isn’t sustainable.

    The Heroin Crises should be a wake up call to everyone because even their children or grandchildren can get caught up in the drug culture which explodes when economic conditions leave tons of people out of the action. We all become victims of drugs when crime explodes.

    https://wntk.wordpress.com/2016/01/01/royalton-woman-arrested-on-heroin-possession/

    https://wntk.wordpress.com/2015/05/19/vt-woman-arrested-twice-for-heroin-in-1-day/

    People who dig in and defend the status quo need to be pushed aside so this society can be overhauled to provide opportunity to everyone willing to keep their nose clean and their act together.

    To compete in a Global Economy the wasteful American Culture needs to change big time.

    • Paul Richards

      “Become a right to work state.
      Create The Bank of Vermont.
      Reduce school spending over 50%
      Overhaul Act 250 so it’s a 90 day process.”
      I can agree with that. After that not so much but you got off to a great start!

      • John Grady

        #5 housing

        #6 supply warehouse

        The words {state owned} does sound scary but unlike monopoly government they would have to sell to customers who wouldn’t have to buy from them.
        The current good old boys running the state would need to be cleaned out because it’s a given if they where in charge of handing out political patronage jobs unqualified people would be handed management positions based on who they know, not what they know.

        http://vtdigger.org/2016/01/12/gus-seelig-leahy-brings-program-home/

        Too many of today’s housing developments are high cost per unit so not affordable, they are massively subsidized by taxpayers at over $200,000 per unit.

        A supply warehouse would work like a co-op. Right now towns are buying at retail prices and paying top dollar for everything. Buying in bulk lowers the cost. It would also save towns labor dealing with one vendor for items currently bought threw multiple vendors and save time not having to shop once it was evident the prices where good.

        It would be easy to expose either operation wasn’t in the taxpayers best interest if the costs where higher than private industry.

        #2 The Bank of Vermont
        It would be the same business model so why be for that but against 5 & 6 ?

        http://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/

        The term mobile homes is being used to also describe prefab housing. It’s evident the industry could use some competition and combined with a State Bank a lot of people could get into housing they could actually afford to pay for on their own.
        The current building industry has no incentive to build small housing so nothing currently labeled as a starter home is being built. The towns also push developers to built high end housing because they see more tax revenue per unit.

        Vermont needs to bend the cost basis for young people to get established in the middle class. Some older people think they are entitled to sell their houses to young people for top dollar so will fight against anything that threatens the value of their houses which amounts to crony capitalism, not FREE Market. Landlords also think they are entitled to top dollar for rent so they will lobby against having to compete which amounts to more crony capitalism, not FREE Market.

        High cost housing drives up the cost of living which drives jobs away. The current housing market is totally corrupted threw lobbying for zoning laws and NIMBYism, it’s not a FREE Market.

        All 6 items I mentioned have the same goal, lower the cost of living in the state so we can compete for jobs and residents to get people to stop looking to leave and others to move here not so much as to grow, just to maintain a stable economy and to also get tons of currently disenfranchised people on the right track and in the game so they are contributing to society instead of being burdens on society.