Daily Archives: August 19, 2015

The Shappening

Shap SmithWell over a hundred people gathered in the midday sun today, to hear House Speaker Shap Smith officially launch his candidacy for Governor. The crowd was enthusiastic, and nobody keeled over from heatstroke, so there’s that. Several state lawmakers were on hand. So too, interestingly, was Governor Shumlin’s recently departed chief of staff Liz Miller. She wasn’t wearing a “Shap” sticker that I could see*, so maybe her presence was mere coincidence. Mo Vegas is, after all, the place to be.

*Tattoo, perhaps.

And if Peter Freyne were still alive, Mr. Speaker might have acquired a new nickname: the Prag Prog.

I say my record is one of pragmatic progressivism.

He also unveiled a campaign logo, “Shap” in large white letters next to a green outline of Vermont, all set against a deep blue background. I would have been tempted to go with “Shapleigh,” but that’s probably why I’m not a candidate.

Holding the event in Morrisville was, I thought, a good move. It emphasized his status as a Vermonter rather than a Statehouse insider, and underlined his speech’s emphasis on ensuring opportunity in every part of Vermont, not just Chittenden County.

My big takeaway: the event highlighted his strengths as a candidate and the big challenges he will face. Most of which revolve around the same thing: his position as Speaker and his central role in Democratic policy initiatives of the past several years.

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Keurig Green Mountain and the limits of tax incentives

Photo from killthekcup.org.

Photo from killthekcup.org.

Last week, Keurig Green Mountain announced 330 layoffs, including 200 in Vermont. The move came after sales and profit shortfalls hammered the company’s stock price. (Last November, KGM traded at more than $150/share. Now it’s barely over $50.) One analyst told MarketWatch.com that KGM shows “‘telling’ signs of a company struggling to turn around its business.”

The layoffs were widely reported in the Vermont media. What wasn’t mentioned is that since 2007, KGM has received approval for a whopping $7 million in job creation tax incentives through the state’s Vermont Economic Growth Initiative (VEGI). What does KGM’s contraction (and uncertain prospects) mean for its generous tax incentives?

I sought answers from Fred Kenney, Executive Director of the Vermont Economic Progress Council and head honcho of VEGI. He offered a fair bit of reassurance on the VEGI mechanism and state oversight of KGM grants, but I remain dubious on the fundamental concept of tax incentives as a means to economic growth.

In short, while VEGI is a well-designed program of its kind, the KGM experience rings some very real alarm bells about it.

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