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Not-for-Profit, Award-Winning Community News and Views for Windham County, Vermont • Since 2006
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Gov. Phil Scott visited Brattleboro on April 24 for the Brattleboro Area Chamber of Commerce’s annual “Lunch with the Governor.”

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Governor takes aim at rising taxes for fewer people

Scott discusses policy, demographic concerns during visit to Brattleboro

BRATTLEBORO—Like every good politician, Republican Governor Phil Scott opened his speech to members of the Brattleboro Area Chamber of Commerce with a joke.

“It’s always a pleasure for me to come here to Brattleboro,” he said. “Not everybody says that from my party.”

In the 2018 gubernatorial election, Scott lost Brattleboro to Democratic challenger Christine Hallquist, 3,391 to 1,408. It was one of the few towns in the state that Scott failed to win on the way to a landslide election to a second two-year term.

“We may disagree on some of our views,” Scott said of Brattleboro. “But you always treat me so well, so I thank you for that.”

Approximately 100 people attended the Chamber’s annual “Lunch with the Governor” on April 24 at American Legion Post 5.

The governor focused most of his time on demographic and workforce challenges. According to Scott, the state’s population is stagnant, Vermont has one of the oldest populations, and businesses can’t find enough workers.

The state must grow its population, he said.

“The solution to many of our problems is right in front of our noses,” he continued. “If we want to fund more early education, or science and technology for kids, we need more taxpayers, not more taxes.”

A state population in decline

Scott outlined the numbers and conditions that concern him the most:

• Since 2009, Vermont’s labor force has declined by approximately 15,000 people.

• Every county, except Chittenden, has seen a decline in the number of people working.

• Vermont’s current unemployment rate of 2.3 percent is the lowest it has been since 1988, and is one of the lowest in the nation. While this data point looks good on paper, Scott said it reflects that “thousands of jobs [are] open across the state, but we don’t have the people to fill them.”

• In Windham County, the labor force declined by nearly 3,000 workers since its peak in 2010.

• Some 30,000 fewer students attend Vermont’s elementary, middle, and high schools than did in 1997 — an average loss, as Scott said, of three students a day over 20 years. [Editor’s note: By that calculation, Scott made an error that undermined his point. Those numbers indicated an average loss of at least four students per day.]

• Since 2004, Windham County’s K-12 enrollment has declined by more than 1,400 students, amounting to a loss of 15 percent over 15 years. Essex County, in the Northeast Kingdom, saw its student population decline by 42 percent over the same period, according to Scott.

“That means 15,000 fewer people working or looking for work, 15,000 fewer Vermonters available for jobs we know businesses are trying to fill right now, and 15,000 fewer potential taxpayers,” Scott said.

“It also means fewer customers at our businesses, rate payers for utilities, fewer available for our volunteer fire departments, and even fewer people running for office,” Scott continued.

Despite the gloom and doom, Scott said the state can reverse these trends by focusing on its assets and shoring up areas of weakness.

On the assets side, Scott pointed to Vermont’s reputation as having one of the healthiest and safest populations in the country. It also has a strong education system. The state features multiple outdoor recreational opportunities, Scott said.

All combined, those numbers mean Vermont has “one of the best recruitment tools” to offer: a strong quality of life.

Scott reminded the audience of the executive orders he issued two years ago as a new governor, priorities that have guided his administration: grow the economy, make Vermont more affordable, and protect its most vulnerable.

“Three very simple principles which guide us on every policy, every decision we make on a daily basis,” Scott said. “And these goals are as important today as they were then.”

To achieve these goals, however, Scott said the state needed to “be honest about the challenges we face.”

Scott said that across Vermont, businesses have good jobs but not enough workers. The state must do more to encourage people to move to the state.

“This year, my budget includes a total of $2.5 million to identify those most likely to consider moving to Vermont, tell them our story, and make it easier for them to move here, find a great job, housing, and a community that fits them and the regions and job sectors that need them the most,” he said.

He added that “bringing more people to Vermont does help Vermonters already here, because I do hear some pushback from people saying, ‘It’s great you’re trying to get people to move here, but what about me?’”

Scott acknowledged the criticism his remote worker program received last year. The goal of the program was to recruit people to move to the state who could bring their job with them and in return, the state would provide up to $10,000 to help with moving costs.

“It was widely, wildly popular,” he said. “We had over 3,000 inquires on that program alone.”

The program also had more than 1 million social-media hits, he added.

Wages contribute to a quality of life

According to the Public Assets Institute (PAI) a Montpelier-based think tank, Vermont’s economy has had some recent good news.

Last month, PAI reported that Vermont’s median wage increased by 2.8 percent from 2017 to 2018 after adjusting for inflation. This amounted to the state’s largest wage rise in four years and even outpaces the national rate of increase of 1.5 percent.

Despite this increase, Vermont’s median wage is the second lowest in New England, at $19.70.

With wages in general lower in Vermont than they are in the other New England states, one common denominator for both attracting new workers and keeping existing ones is improving wages.

Scott said that the differences aren’t “that dramatic” for all areas of the state, and offered Chittenden County as an example.

“The answer really is more economic opportunity, and we have to continue to focus on growing the economy because we don’t have the resources,” he said. “The more people we can put to work with the jobs we have open, the more resources we have to make investments in areas Vermonters want. We’re trying to do both at this point, and we’re very limited.”

Is the state looking at the types of jobs emerging in the state with respect to the levels of wages they pay?

“Every sector in Vermont needs help, whether it’s engineering, civil engineering, electrical engineering. In the trades, the average age of somebody [...] is 56 to 58 years old,” Scott responded. “Think about that in five to 10 years when you need an electrician or a carpenter or a plumber or an auto technician.”

Scott circled back to his talking points.

“We don’t have the people here, so if we don’t have the people, then we can’t fill the jobs we have open, even if we have more economic activity, so it all has to happen at the same time,” he said, adding that wages will grow more because of the demand for workers.

Working with the Legislature

Scott reminded the audience of his efforts in the current Legislative session to reverse the negative population trends and to keep more families in the state.

He also echoed back to his budget address from earlier this year by telling the audience that he believes that “protecting the environment and growing the economy go hand in hand.”

Scott said the state’s comprehensive energy plan recognizes that more electric vehicles on the road are essential to meeting the state’s climate and energy goals.

Sixty percent of the state’s carbon emissions are related to transportation, he said. The state needs 10 percent of the vehicles on the road to be electric by 2025 and 25 percent by 2030. Right now, fewer than 1 percent of new car registrations are for electric vehicles.

Scott said he agrees with the Vermont Climate Action Commission’s final report, which recommends creating a financial incentive to encourage more people to switch to electric vehicles.

Last year, Scott proposed $1.5 million in rebates to help more people purchase EVs.

“And, to lead by example, because I think we need to as a state, I’ve asked for $500,000 to invest in more EVs and more EV infrastructure for the state fleet as well.”

Scott also outlined his voluntary family-leave plan created in partnership with the state of New Hampshire.

He developed the plan as an alternative to one proposed and passed by the Legislature, which last year passed a state-run, mandatory paid-family-leave bill.

The governor vetoed that bill, along with legislation to raise the Vermont minimum wage to $15 per hour, because he believed that both would contribute to making the state unaffordable for businesses and workers.

The Legislature has put both bills back on the table this session.

“These are two small states, working together — this is the first of its kind in the nation,” Scott said. “Our proposal would provide affordable plans for all employers and employees in both states, but it’s their decision if they want to join.”

Scott poked at legislation recently passed by the House of Representatives that if signed into law would create a statewide mandatory plan.

“[Legislators] believe that a totally government-run program funded with a payroll tax of about $80 million is the way to go,” he said.

Scott said that his plan deserves a “fair shot.” He referred to his plan as a “first step” that could spread the risk across two states, launch faster, be more affordable, and operate more reliably than any program the state could create anew.

The Legislature’s plan, Scott said, would require creating a new technological structure, built to avoid the chaos that accompanied the early days of Vermont Health Connect, the state’s health-insurance marketplace.

Scott said the state would be better served if it allowed an insurance company to manage the family-leave plan. He claimed his plan would also not saddle the taxpayers with start-up costs, nor would it levy another expense on business owners.

If in a few years Vermonters say the dual-state, voluntary plan doesn’t work, the Legislature can establish its plan, he said.

“We can always scale up,” he said. “It’s hard to scale back.”

In his speech, Scott also called for collaboration with the Legislature and said that too many Vermonters were relying on Montpelier to “pull in the same direction” and make the state more affordable.

Scott said that, despite the concerns he hears from Vermonters every day, he remains optimistic about the state’s future.

“Each new taxpayer provides a bit of relief to those of us already here and allows us to continue funding the programs and services that Vermonters need and want,” Scott said.

“If we’re successful, our economy will grow organically by expanding our tax base,” he said. “This will ease the burden on hardworking Vermonters making Vermont more affordable.”

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Originally published in The Commons issue #508 (Wednesday, May 1, 2019). This story appeared on page A1.

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