Sweet Deal for the Big Dog

It was good news for Vermont when the Husky Injection Molding Systems of of Bolton, Ontario announced that it intended to build a $50 million, 200-job plant in Milton. The Dean Administration had mounted an aggressive campaign to bring Husky to Vermont, under the code name "Project Big Dog".

Now that the euphoria over the announcement has subsided, it may be worthwhile to examine just what Vermont had to do to persuade this highly desirable company to locate here.

Let's begin with planning, an idea promoted so enthusiastically by Gov. Kunin, who pushed Act 200 through to passage in 1988. Milton prepared a town plan in accordance with that Act's guidelines. Several years ago the Chittenden County Regional Planning Commission approved Milton's plan as being in compliance with Act 200. The Regional Planning Commission also adopted its Regional Plan in accordance with Act 200.

Now here, certainly, is an occasion to celebrate wise planning, so strongly encouraged by Act 200. With careful attention to Act 200's goals and guidelines, consideration of all relevant factors, and lots of public participation, the people of Milton and Chittenden County made important and informed decisions about their future growth and development. Huzzah for the planning process!

Unfortunately the town and regional plans did not anticipate that this outstanding firm would want to locate on the shores of Arrowhead Lake in Milton. The town plan called for low density rural residential use on Husky's chosen site. The town zoning bylaws, based on the town plan, required a 9.1 acre lot per residence. They also allowed three single residential units to be placed on 10 acres if part of a Planned Residential Development. Milton's zoning did not permit $50 million factories on the shores of Arrowhead Lake.

The town is now busily revising its town plan and zoning bylaws to correct the oversight that would have prohibited the Husky plant.

The Chittenden County Regional Plan was in the process of its 5 year amendment when the Husky possibility materialized. The Plan was promptly revised to designate the Husky site as part of an "urban mixed use" district which allows a Husky-style industrial park.

So much for the wonders of planning.

One of the reasons why the planners failed to anticipate industrial development on this site was the difficulty of access. To get materials in and out of the site, Husky will eventually need a bridge across Arrowhead Lake. The town planners of course designated areas with existing transportation access as prime industrial sites.

But Husky wasn't interested in those sites, so the town and state have now obligated themselves to build a $7 million bridge by June 2001. If the state can't write this commitment in stone, with all required permits, by March 29, 1997, Husky says all of its commitments are off. Senators Leahy and Jeffords have been asked to get Uncle Sam to come up with the $7 million ASAP.

Husky will need lots of electricity. The state - presumably the Governor - obligated itself to put the pressure on CVPS to find some cheap electricity for Husky. Since the Governor controls the Public Service Department which contests CVPS over rates and profits before the Public Service Board, CVPS may feel obliged to accede to the Governor's wishes. After all, the subsidy can be made up by overcharging everybody else.

Husky doesn't like to be soaked for property taxes. So the town agreed (subject to voter approval) to freeze Husky's land value and tax rate for ten years, and tax improvements only at today's tax rate. Very nice.

The town agreed to run water and sewer to the site, which will cost $750,000. Accordingly the town applied to the state for a CDBG grant of $750,000 for this purpose. CDBG grants - totalling $8.7 million for this year - are highly competitive. Since the Governor appointed the nine member Board which recommends the winners, and the Governor's Secretary of Development and Community Affairs acts on the recommendations, Milton looks like a winner in this competition.

What of the incentives offered by Gov. Dean's much heralded "economic progress act"? That 1993 act, heralded as the cornerstone of the Dean Administration's efforts to create new jobs, offered tax credits for capital investment and tax credits for hiring workers. The deal was closed to additional applicants in 1995, but could be reopened as part of a bill to exempt Husky from certain sales tax items, also contemplated in the Big Dog package. But nowhere in the detailed memorandum of understanding between Husky, the State, and Milton is there any mention whatever of the income tax incentives of the "economic progress act".

What are we to conclude from Project Big Dog so far?

First, all the fluff about Act 200 making Vermonters plan wisely for their future is just that - fluff. When a desirable company wants to locate somewhere in Vermont, all the plans and zoning bylaws will be tossed out the window, and new ones written to accomodate the project.

Second, the argument for the economic progress tax incentives looks pretty weak right now. In fact, after three years only four firms had been granted investment tax credits, and one of those has since shut down (Tambrands, in Rutland). No wonder the legislature which so enthusiastically bought into this "industry buying" scheme in 1993 closed the door in l995.

Finally, the state will organize "Project Big Dogs" , complete with state-paid expediter to guide the company through the forest of permit requirements, only for politically valuable firms that might be willing to enter Vermont and have a ribbon cutting photo-op with political leaders. It won't do nearly so much for the small firms in Vermont hoping to expand. In some cases - as in the case of Upper Valley Press of Bradford, now on its way to New Hampshire - the state can't even be bothered.

Instead of crafting all sorts of special incentives and mounting "Project Big Dog" to entice a favored company to come into Vermont, wouldn't it be a lot better if state government made a commitment to low and stable tax rates, swift, fair and certain regulation, a minimum of costly and intrusive business mandates, and active encouragement for our home grown businesses to expand, not move away?

November 1996