8-11-16 – The new VEGI study

by John McClaughry

The state government is about to undertake a new study on the Vermont Economic Growth Incentive program, known as VEGI. The program hands out various benefits to businesses the government wants to encourage.

The Ethan Allen Institute supports free markets and not taxpayer subsidies. It has had the distinction of opposing VEGI’s predecessor, the Vermont Economic Progress Act, from the day in 1993 that Gov. Howard Dean proposed it as a way to close his “Big Dog” deal to get Husky Mfg. into Milton. At one point back then, Progressive leader Rep. Terry Bouricius and I held a joint news conference to denounce Dean’s scheme as “state capitalism”: Terry denounced “capitalism”, and I denounced “state”.

As I wrote 18 years ago, “This kind of guided economic development has the enormous benefit not only of showing the Governor at  plant ribbon cuttings, but also putting the Governor into face to face discussions with Powerful Businesspeople Who Can Raise Money,  and allowing him or her to control the location of growth in ways agreeable to the politically powerful environmental lobbies.”

Vermont policy for decades has favored high entry barriers to any significant land-related economic activity – eased by subsidies to politically favored enterprises to boost them over the barrier. Our policy ought to be to lower the tax and regulatory barriers, scrap the subsidies, and let the enterprises compete in the marketplace. Essential regulation should be strict, fair, certain, and prompt.

John McClaughry is vice president of the Ethan Allen Institute

{ 4 comments… read them below or add one }

phil steckler August 12, 2016 at 9:57 pm

I agree with John in that Vermont would benefit by lowering taxes and easing regulatory barriers. However, until that time, VEGI provides us with financial incentives to attract businesses. The free market works if all states were playing on a level playing field. Vermont’s high taxes and regulatory challenges places us at a competitive disadvantage.


Jim Bulmer August 13, 2016 at 1:17 pm

Typically, there are too many tree huggers in Montpelier who want it both ways. Of course they want the economy to flourish, but on their terms which are so restrictive and rigid few businesses can make the cut. Take cell phone service for example. In many areas of the state service is either poor or nonexistent. The folks in Montpelier start hammering away at the providers to fix the problem. The providers respond with great, “we’ll just put up more towers to improve service.” To which the response is “no unsightly towers on my watch.” You tell me, towers and significantly improved service OR no towers and poor service. You can’t have it BOTH ways.


Linda Quackenbush August 13, 2016 at 1:40 pm

Small town America is evaporating right before our eyes to big multinational government controlled corporations. Big government equates to big government lobbying partners that hide behind multinational corporations that use “non-profits, social justice and green initiatives” to sell their products to a collective global audience like the US all the while shutting their eyes to inhumane labor practices and heavily sanctioned Socialistic governments that have deplorable working conditions for its poor citizens. The ultimate goal here is to ingratiate small American towns with the promise of social reinvestment (re: assistance for the poor) by pandering to America’s charitable social conscience. By ingratiating towns with federal funded programs we give up our voice for American made products and services and replace them with Chinese made products, socialized medicine and nationalized healthcare. Are you beginning to see the picture? These social initiatives are being championed on a much broader political spectrum. They are using people like billionaires Warren Buffett and Bill Gates to also stand up for social reform in the name of philanthropy. Make no mistake this is a ploy to make a lot of money and a lot of beneficiary friends who the use the Social Justice movement to engage in monetary indoctrinating business practices.


Linda Quackenbush August 13, 2016 at 1:47 pm

EAI’s Time-stamp is wrong! I posted the above post at 9:40am on Saturday 8-13-2016


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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

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