This is the kind of thing that makes people mistrust the Governor

Yesterday, State of the State Address: Governor Shumlin introduces a variety of people whose stories illustrate the impact of his policies. They include two executives from GlobalFoundries and two from BHS Composites. The latter was a surprise entry; Shumlin sprang the news that BHS had decided to open a facility in the Northeast Kingdom, creating an estimated 70 jobs.

Today, the state’s Emergency Board met on very short notice to approve state grants to both companies: $1 million for GF and $200,000 for BHS. VTDigger has the deets:

The Emergency Board, which includes the four chairs of the Legislature’s money committees and Gov. Peter Shumlin as the chair, voted at a largely hush-hush meeting that started at 8:30 a.m.

The Shumlin administration did not formally announce the morning meeting until Thursday afternoon, following his State of the State address.

The information in the meeting’s agenda packet, which was printed on Dec. 29, was considered confidential.

Hm. The agenda packet was printed eleven days ago, and the meeting wasn’t warned until yesterday afternoon — less than 24 hours beforehand.

Okay, so the administration sat on the news so the Governor could make a splash. Great. But if Shumlin ever wonders why he has a reputation as a slippery dealmaker, well, here it is.

The timing alone makes it look like a mutual backscratching exercise: You appear at my speech, you let me make some positive news, and you’ll be rewarded with some taxpayer cash.

It doesn’t help that these kinds of grants often suffer from lack of effective oversight, and their real effectiveness is unclear. Does a state grant truly inspire an employer to relocate or expand in Vermont, or is it just a little extra money for their bottom line?

I’ve been critical of state grants to GlobalFoundries — well, I’ve compared it to building a big pile of cash and setting it on fire. I guess that qualifies as criticism. But at today’s meeting, Shumlin noted that “Vermont’s offer is well below the $14 million package that New York is offering to help a [GlobalFoundries] facility in that state.” Which kinda reinforces my point.

When it comes to offering incentives and grants, Vermont is by necessity a small-time player. We simply don’t have the resources to match larger states’ ability to make deals. So why offer them at all? If a company is making decisions based on size of incentives — itself an arguable point — then we’re going to lose every time. So why not play to Vermont’s unique strengths and use the money to create a better employment climate? Say, for instance, make higher education a touch more affordable? Or, if you want to cater to a specific employer, then offer to set up a program designed to produce the kinds of workers it will need?

Well, we’re doing some of that stuff already. But why not more? Why throw money into a game we can’t possibly win?

And if you’re going to play that game, why do it in a way that reinforces the notion that you’re playing favorites for political purposes?

Just so you can make a splashy announcement?

If so, then the sugar rush of the unveil is not worth the longer-term damage to your reputation.

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2 thoughts on “This is the kind of thing that makes people mistrust the Governor

  1. chuck gregory

    So, let me get this straight: IBM pays Global Foundries $1.5 billion to take the chip plant, and now Vermonters are throwing even more money at them? Ten years from now we will look on the vacant hulk of that plant and wonder how we could be so foolish…

    Reply

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