(Host) The debate over whether or not Vermont is anti-business is missing the point, according to commentator Timothy McQuiston. He says the real debate should be over the state of the economy.
(McQuiston) If you want to get a local businessman really riled up, just ask him if he think Vermont is anti-business. Go ahead, make his day.
The notion that Vermont is anti-business goes back to the days of the Great Society in the mid-1960s, Act 250 in the ’70s, and the shift to rule by Democrats, which coalesced in the early 1990s.
Last Tuesday, Microsoft’s online magazine for small business – called bcentral.com – ran an article entitled: Best and worst states to run a small biz. No matter what side you’re on in this vociferous debate, this article will get you going.
The criteria took into account several factors, but the author states that the two most prominent were taxes and regulation. So you probably know where this is going. Vermont ranked in the bottom 10, number 43. Worst was Iowa. Curiously, wheat belt states like Nebraska, North Dakota and Montana were even worse than Vermont, as were usual suspects Maine and New York.
The best states were Nevada, Florida and Texas, states famous for few taxes and pro-business regulations. New Hampshire didn’t make the ten best list, but it did get an honorable mention.
So, what does all this mean for the Vermont economy? Well, businesspeople do look at these kinds of rankings, as well as the criteria that went into them, when making site selection choices. But where Vermont ranks low in business development, other surveys rank the state high for quality of life.
Frankly, we are what we are. Vermont isn’t going to dump its income tax or scrap Act 250. Vermont is called the most rural state in the nation. But that’s predicated on population densities. Vermont isn’t really rural; it’s suburban. Fifty years ago it was a poor state; it isn’t any more. It’s just kind of below-average now.
And, really, that’s the problem. Vermont is getting more below average every year in terms of wages. The higher paying industries have shed workers over the last 15 years – 6,000 manufacturing jobs and 2,300 construction jobs. Sure, some jobs have been made up for in large part by lower paying jobs, but the consequences are obvious Less wealth and higher tax rates to make up for it.
Vermont isn’t going to tax itself out of this problem, nor is it going to develop itself out of it. It’s going to take time, and it’s going to require intellectual property, the kind found at colleges and at every K to 12 school in the state. If the state is having to make hard budgetary choices, Vermont should choose to continue to support education. The rest of the economy will follow.
This is Timothy McQuiston.
Timothy McQuiston is editor of Vermont Business Magazine.