July 2008

From: Bob Flint, Springfield RDC
Comment from attendee at the July 10th public meeting in Springfield

Topic: Vermont falls in Forbes' "The Best States for Business" rank
Please forward this on to CFED for comment:
Vermont falls in Forbes' "The Best States for Business" rank

Vermont fell to 36th in the Forbes "The Best States for Business" rankings. Last year Vermont was 32nd. Once again, Virginia was first and West Virginia was last. Vermont tied with Massachusetts, one place ahead of New York. New Hampshire was the highest New England state, falling six spots to 20.

Vermont ranked highest in "Quality of Life" (10) and "Labor" (12) and lowest in "Growth Prospects" (44) and "Business Costs" (43). The other two categories were "Regulatory Environment" (33) and "Business Climate" (31).

The table with state ranks can be found at Forbes Rank.
 
 
name: Frank
email: frank@gmail.com
city: Montpelier
date: 7-23-08
comments: Vermont has three very positive aspects: 1. We're small and much more nimble than large states. 2. We already have a reputation for quality. 3. We care about our environment and work to protect it. For the future we need to embrace those three things and make positive change. We could easily embrace and encourage green industry to enter the state. We need to be sure that our legislation protects the environment, but ALSO the people. For Vermont to remain viable, we need to provide employment that will allow for growth and opportunity. We need to protect our reputation of producing quality goods and expand upon it. We need to start moving forward with bringing more industry here that WILL support communities. Micro businesses are a great Vermont tradition, but ultimately, they're a small niche. Not everyone can start their own business and small business can't support a community.
 
 
To:       Glenn McRae & CFED Members
From:   Lorna Higgs, NVDA
RE:       CFED Meeting – July 22, 2008
 
The following comments are from people unable to attend the meeting but who wanted their comments to go on record:
 
1)  Telephone message in response to press release: Hardwick Gazette 07-16-08
Bob Hauck, Walden  (533-9803)
PRIORITY Recommendation: 
Ensure that the State’s telecommunications infrastructure is fully developed to provide coverage and access to every town within three years.
“Every facet of our economy is impacted by the economics of telecommunications and high-speed Internet” 
 
2) Robert Starr, Owner & CEO RadianTec, Lyndonville bobstarr@sover.net  (Dave Bolduc will represent RadianTec on Tuesday)
“It is important to control the cost of electrical energy to busineses through enablement.  Some state agencies have it wrong to the extent that they posit that we must go out of state to purchase large blocks of energy. They got it wrong when they concluded that there is little that we can do in-state.” 
  • Cogeneration of electrical energy should be encouraged by business (we currently obstruct it by the rate design)
  • Congeneration of electrical energy by individuals should be encouraged not obstructed.
  • Conservation of electrical energy should be encouraged. I am afraid we still obstruct it.
  • New metering will open opportunities to create jobs by solving our own energy problems.  I am afraid that we still obstruct it.
  • We must not hold electric rates low with taxpayer subsidies.  It is a terrible energy policy and we are doing it.
If other surrounding states are attracting business with artificially low electrical rates we should sue them instead of matching them.  (There is opportunity in the federal PURPA legislation – Public Utility Regulatory Policy Act)
 
Obviously, we need to talk to elements of the bureaucracy when they are apathetic.
 
There are important training opportunities in the workforce that are unrealized.  For example, the plumbing and heating trades are required to present eight hours of continuing education in order to qualify for license renewal.  There are no energy efficiency offerings – although there is a CPR offering.
 
 
FROM:  Glenn McRae (CFED Staff)
RE:  UVM Role in economic future
 
July 20, 2008  Editorial- Burlington Free Press
UVM can play role in economic future

People in Vermont looking for a lesson in IBM's recent decision to put its money on New York might direct their attention to where the company chose to make the announcement: the College of Nanoscale Science and Engineering (CNSE) at the University of Albany.

IBM is investing $1.5 billion to boost its nanotechnology business, establish a research and development center and create more than 1,000 jobs. It makes sense to invest in developing a technology near an institution that's doing research in the field.

That's something to remember as Vermont works to reinvent its economy into one driven by green technology. Plans to have the University of Vermont play a major role as an incubator and innovator will be key to whether the effort succeeds over the long run.

Here's how the New York school describes its mission: "By leveraging its resources in partnership with business and government, CNSE supports accelerated high technology education and commercialization, and seeks to create jobs and economic growth for nanotechnology-related industries."

Despite playing host to an IBM semiconductor plant for more than 50 years, Vermont Commerce Secretary Kevin Dorn and IBM spokesman Jeff Couture agree that the University of Vermont has nothing that can compete with what the Albany school can offer. In fact, the University of Vermont even flirted with the idea of shutting down its engineering school in the early 1990s.

Now think of an alternative universe in which the innovations in semiconductor technology are constantly flowing back and forth between the state's leading high-tech employer and Vermont's premier institution of higher education.

IBM's leading scientists are fellows at UVM, passing on their knowledge to Vermont students and inspiring innovations that help fuel technology advances at Big Blue. The collaboration between school and business creates a center that attracts both those seeking to learn the latest in semiconductor technology and a career in the field.

We have no high-profile programs in our schools that immediately link Vermont in people's minds to IBM. High technology is absent from the state's popular image. But it could still happen for green technology, and it could happen relatively quickly. The University of Albany rebranded its engineering school to emphasize nanotechnology just four years ago.

That makes UVM's green technology initiatives a key part of Vermont's economic future. The state already has a green reputation. Building on that brand by working with businesses and our leading university can only help in attracting talent and industry to our state.



FROM:  Glenn McRae (glenn@snellingcenter.org), CFED Staff
Date:  July 14, 2008
RE:  Tax policy – sales tax – RH Editorial

Zero sum game
Rutland Herald Editorial
July 14, 2008

This weekend's sales tax holiday is likely to be replicated, as on the surface, it's a boon.
Yet is it?

The lessons learned as Sunday blue laws vanished jurisdiction-by-jurisdiction are worth revisiting. Yes, Sunday openings let folks spend their money seven days a week. And it was a huge boost at first to the merchants who were open the extra day, but once everybody started staying open, any gains were incremental. People might have spent a little more at first, but Sunday shopping didn't increase the total disposable income. Robust weekend sales typically came at the expense of weaker Mondays and Tuesdays.

The costs of staying open the extra day were real, however, as anyone who's ever tried to spread their employees over six days versus seven can tell you.

Reports in the Sunday paper about the immediate success of the tax holiday on Saturday did mention that sales had been particularly slow in the weeks leading up to it, as people chose to hold off on purchases until there was no sales tax, so we won't really know if the gimmick worked until after we do the math: Once you subtract a month of slow sales from one stellar weekend, is the net result greater, less or the same as five weeks of the same old, same old?

It's likely that Vermont's experiment will show some success, because of our shared border with sales-tax-free New Hampshire. People who normally drive 20 or 30 miles to save on taxes might have stayed in Vermont this weekend.

But New Hampshire's system only works because they are a parasite on the surrounding states. Look at the enormous state liquor stores on the main highways in and out of the GraniteState. They make most of their money selling to out-of-staters — mostly coming up from northern Massachusetts. But if that state were to build twin stores on their side of the border, the profits would be spread thinner and New Hampshire in particular would suffer because people would have to pay for gas.

Certainly, there's not enough population in the UpperValley to sustain major shopping destinations on both sides of the river.

If no one in New England had sales tax, it wouldn't create a lot of new sales, it would just cripple New Hampshire's economy.

The benefit other states gain out of living next to a tax-free one is that it acts as a brake on our own taxes. People will drive only so far for a 6 percent discount; for 10 percent, they'll go a lot farther. At a certain point — perhaps 2 or 3 percent — the differences would be negligible because most shoppers wouldn't notice the difference on most goods. So Vermont can't afford to raise sales taxes too high. It's one thing for the state's coffers to have people driving from Woodstock to shop in New Hampshire. When greater Burlington starts driving across the state to do so, it hits Vermont's revenues in a major way.

The weekend sales tax holiday will only be a real success if the results convince Vermont to lower the sales tax year-round. The state doesn't have to eliminate sales taxes; just get them low enough that people spend more in gas driving to New Hampshire to shop than they save when they get there. Do that, and we won't need a tax holiday.

 
FROM:  Glenn McRae (glenn@snellingcenter.org), CFED Staff
Date:  July 14,2008
RE: Tubbs closing and RH editorial – FYI
 
Tubbs' demise
RH Editorial July 12, 2008

 

The closing of Vermont Tubbs in Brandon is a blow to the town and the state. It is a particularly tough blow to the 90 employees who will lose their jobs.

Officials tried to work with the new owners of the plant, Brown Street Furniture Co., but Brown Street decided a month after buying Vermont Tubbs that it would shut the plant down.

Local and state officials were looking for ways to entice the company to stay or even to move its operations from northern New Hampshire, where it is based, to Vermont. Brown Street appears to have listened to ideas about ways to cut costs and then acted quickly, suggesting it never really planned to keep the plant open.

What the company appears to have gained is a product line and a brand, which can be manufactured at the existing plant in New Hampshire, without the overhead of an additional plant in Vermont. Thus, it could well happen that furniture with the "Vermont Tubbs" label will actually originate in New Hampshire.

In this way Brown Street will have achieved what businesses always strive to achieve — a greater share of the market. It is the old story. One company buys another, shuts down plants, sheds workers, expands its market share and boosts profits. Some economists call it creative destruction — creative, if you own the company; destructive, if you are a laid-off worker.

Furniture manufacturing has been hit hard by competition from China, which is unfortunate because furniture makes use of an abundant natural resource and creates good factory jobs. On top of international competition, domestic furniture makers are also suffering because of the housing slowdown and the overall economic downturn. Vermont Tubbs reportedly was unable to fulfill a major order for Bloomingdale's because it didn't have the money to buy the wood to make the product.

State government programs are in place to help laid-off workers secure new jobs, but the shrinking number of manufacturing jobs does not bode well for Brandon or the state. It has happened before. State unemployment is low, mainly because service jobs have grown as manufacturing has faded. The old paradigm was that the laid-off machine tool worker from Springfield found work as a chair lift operator. Who knows what will be available for the Vermont Tubbs workers?

The plant closure creates political difficulties for Gov. James Douglas, as do other labor troubles. Douglas originally ran claiming that "Jim equals jobs," but job growth in the state has been sluggish. As executives try to claim the praise when times are good, they also are usually forced to shoulder the blame when times are bad. Certainly, today's economic woes extend far beyond the borders of Vermont and the reach of Douglas' influence, but further job losses undercut his ability to boast.

Brandon has been on the upswing. In recent years, the village has revived itself, and civic engagement has grown. Let's hope that somehow the destruction of Vermont Tubbs is turned into something creative and that workers and town, dealt a sudden and devastating blow, are able to fashion gain from loss.


 The Commission on the Future of Economic Development will host a series of public meetings on economic development goals, plans and needs.

For specific information:
http://www.snellingcenter.org/cfed/
802-859-3090 x 308
 
This is the second set of forums that cover all of the 12 territories of Vermont's regional development corporations.  They are conducted with the cooperation of the RDCs and other key regional partners.  Six sessions were hosted in the spring.  The following six are scheduled for the summer.
 
Public Meeting
Thursday, July 10th, 5:30 - 7:30 pm
Springfield High School Cafeteria
303 South Street, Springfield

Public Meeting
Tuesday, July 15th, 5:30 - 7:30 pm
Vermont College Campus – The Union Institute and University
36 College Street, Montpelier
College Hall, The Chapel
 
Public Meeting
Tuesday, July 22nd, 5:30 - 7:30 pm
Eastside Restaurant - The Landing
25 Lake Street, Newport

Public Meeting
Tuesday, July 29th, 5:30 - 7:30 pm
Grand Isle Lake House
4 E Shore N, Grand Isle
 
Public Meeting
Tuesday, August 5th, 5:30 - 7:30 pm
River City Arts Center
74 Pleasant Street, Morrisville
 
Public Meeting
Wednesday, August 13th, 5:30 - 7:30 pm
Everett Mansion , Southern Vermont College
982 Mansion Drive, Bennington

In the afternoon Commission members will meet with Employers, then with a large group of economic development stakeholder assistance organizations.
 
There will be an open evening public session from 5:30-7:30 on each date.  Designed into each program will be opportunities for anyone from the region to offer comments and input either directed a specific questions the Commission will bring or in general through speaking at the session, filing written comments, or participating in a survey (hard copy and electronic).  We will be seeking to have the evening sessions taped for rebroadcast with local public access channels.
 
For more information follow the listing at http://www.snellingcenter.org/cfed/
 
 
July 1, 2008
name: Bill Bevans
email: bbevans@coachworksfarm.com
city: Craftsbury Common
county: Orleans      
state: Vermont
comments: How to deal with the concern: Spiraling energy costs will make Econ Dev effort even more unbalanced in favor of the more populous, wealthy communities to the detriment of the NEK