Mr. Milne’s Recycling Bin

Scott Milne tried to make up for his two previous statewide campaigns, which were remarkably issue-free, by releasing a lavishly illustrated and ridiculously detailed 60-point policy agenda this week.

His Tuesday announcement got lost in what turned out to be a very big news day, including Dr. Anthony Fauci’s guest appearance at Gov. Phil Scott’s Covid-19 briefing and Scott’s veto of the Global Warming Solutions Act.

I felt a little sorry for Milne at the time. But having taken a dip in his mile-wide-but-inch-deep policy pool, I decided it’s probably better for him that this stale batch of recycled ideas didn’t attract much notice. The package is dominated by conventional Republican tropes, failed Scott administration proposals, and plenty of filler to make the agenda seem more impressive than it is. You’d think a guy who’s reinvented himself as an edgy cryptocurrency investor would have some fresh ideas to contribute.

What’s even worse is that Milne completely fails to address some of our most critical challenges. There’s nothing about our raging opioid crisis, not a mention of racism, justice, policing or corrections, and barely a nod to climate change.

Since Milne’s document is searchable, we can quantify that. “Opiates” and “racism” are nowhere to be found. The word “climate” occurs precisely once in the 33-page document. And that’s a reference to Vermont’s economic climate.

After the jump: YOU get a tax incentive! And YOU get a tax incentive! EVERYBODY gets a tax incentive!!!

ProgressVT leans heavily on tax incentives, which are the imprecise, wasteful shotguns of public sector investment. These programs are designed to encourage certain kinds of activity by lowering tax burdens. The problem is, tax implications are generally a marginal consideration in private-sector decision making. Other factors are much stronger drivers, although businesses are perfectly happy to grab the state’s gifts when offered.

Republicans love tax incentives because they seemingly don’t cost anything. But that’s a misrepresentation. The Legislature’s Joint Fiscal Office calls them “tax expenditures” because that’s what they are. Every tax expenditure involves the state foregoing revenue it is entitled to, and could invest elsewhere. And an intentional state investment — if made wisely — will be far more effective than a tax expenditure.

Take, for example, an incentive for film and TV production in Vermont that was discontinued years ago because it wasn’t working. Milne wants to revive the idea, despite the fact that… it wasn’t working.

In a similar vein, the only climate-related proposal among Milne’s 60 points is a sales tax holiday for electric-vehicle purchases. These things are gimmicks, pure and simple. They artificially goose sales during the holiday period instead of generating more activity. And most of the benefit would go to those who could afford the purchase even without the incentive.

Milne’s tax giveaways also include a credit for angel investors who put their money into Vermont startups, boosting the value of the research and development credit, and altering the Vermont Economic Growth Incentive (VEGI) program to include grants for businesses that invest in water quality improvements.

I’m not saying that tax expenditures are always a bad idea. But they are far from the sharpest tool in the shed, and Milne’s overdependence on them does not speak well for his ingenuity.

Milne does focus, at least a bit, on another big issue facing Vermont: universal broadband, which has become more urgent with so many working or studying from home during the pandemic. But he addresses the issue with two small-bore plans. The first is, guess what, a tax expenditure! He would eliminate the sales tax on network equipment. Which, again, is a relatively small line item in a buildout project, and is very unlikely to trigger a boom in rural Internet.

Milne would allow Community Development Block Grants (CDBG) to be used for broadband and communications projects. Which is a rerun of a failed Scott idea — focusing the Vermont Housing and Conservation Board’s activity on housing alone. The Legislature rejected the idea because it would have killed the Board’s capacity for conservation investments. Unless Milne proposes an increase in CDBG funding, which he doesn’t, then his plan would again rob Peter to pay Paul.

On education, Milne cribs another Scott proposal that has failed to go anywhere in the past four years: Expanding the Education Fund’s brief to include pre-K and secondary education. He doesn’t come right out and say so any more than Scott ever has, but this would mean taking hundreds of millions away from the public school system. Can you say “dead on arrival”?

I could go on and on, but this post is plenty long enough. I will point out a couple of noteworthy oddities. Milne acknowledges that one of our perpetual water-quality problems is outdated wastewater/sewerage systems that routinely dump large amounts of untreated water into our rivers and streams. But his solution is to have the state get tougher with regulating municipal systems, without identifying any resources for mitigation. Replacing old systems is hella costly, and all he’d do is put the burden on cities and towns.

There’s also quite a bit of talk about Act 250 reform, much of it Republican boilerplate about how burdensome it is for developers. Act 250 is a sore spot for Milne, who tried to build a massive development off I-89’s Exit 1 and was blocked by the regional Act 250 commission. But ProgressVT includes the following curious passage:

The process has become too easily hijacked by opponents of development for non-environmental reasons, such as market competitors concerned about the impact of a project on their bottom line.

When I read that, one real-life issue sprang to mind: Costco’s effort to build a big gas station off I-89’s Exit 15. The plan was stymied for years by gas baron Skip Vallee, who cloaked his opposition to Costco in Earth-friendly verbiage, when in reality he wanted to avoid fresh competition at the high-traffic interchange. Perhaps Milne had something else in mind, but that passage is sure to cause the Vallee checkbook to snap shut.

There are many more ideas in ProgressVT, most of them inconsequential. And destined to go nowhere. Even if Milne wins, he will assume an office with no policymaking authority at all. He would wield the Senate gavel and enjoy a lavish office, but senators tend to treat the LG like a mosquito at the barbecue. That would be even more true if a Republican LG is trying to get the attention of an overwhelmingly Democratic body.

Still, after two successive campaigns in which he made little to no effort to put forward an agenda, he deserves some credit for actually doing so this time.

1 thought on “Mr. Milne’s Recycling Bin

  1. Sen. Joe Benning

    Re: “The problem is, tax implications are generally a marginal consideration in private-sector decision making.”

    John, I have to be honest. The above statement is indicative of two things. First, you must never have actually run a retail/services business east of the Green Mountains. Second, you have never visited St. Johnsbury, VT and Littleton, NH for comparison purposes.

    Tax implications are hardly “marginal consideration,” since those implications drive the cost of product and services, which directly impacts profit margin. Proof of how that works is in the vacant storefronts on the west side of the Connecticut River and the near absence of same on the east side.

    Those of us who’ve actually practiced in the private sector are getting really frustrated reading media dismissals like the one written above, too often written by those seemingly unwilling to take a trip outside the confines of the Washington/Chittenden county bubble. Please take a ride from St. Johnsbury to Wells River, then cross over the river and go up the other side. “Private-sector decision making” is actually really easy to see, but only if you’re willing to see it.

    Reply

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