Category Archives: Taxation

Hey look: another failing business-incentive program!

Remember a couple years ago when New York launched “Startup NY,” an ambitious, expensive business incentive program? Vermont officials looked on with envy and concern as a program they couldn’t possibly match went into effect — with a barrage of slick TV ads saturating the Vermont airwaves, no less.

Republicans used Startup NY as a cudgel when attacking Governor Shumlin for not being business-friendly. Shumlin used it as something of a bargaining chip to get the Legislature to approve his desired incentive programs.

Well, the Cuomo administration just issued its required annual status report on Startup NY — months after the due date, and released at 4:30 pm on Friday afternoon heading into the Fourth of July weekend.

Yep, a newsdump. And yep, the report was bad news.

The companies that moved into the StartUp NY network of tax-free zones have created just 408 of the more than 4,100 jobs they promised to add to the state’s employment rolls within five years, according to a long-delayed report released late Friday by Empire State Development.

Well, now we know why the report was “long-delayed” and released at the last possible moment before a three-day weekend. Nobody in the Cuomo administration wanted to face questions about it.

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And now, a moment of appreciation for Peter Galbraith

Anyone who’s read this blog for more than ten seconds already knows how I feel about Peter Galbraith. The Most Hated Man in the Senate.  Happy to obstruct legislation for obscure points of principle detectable only to himself. Narcissistic. Oil baron of questionable provenance. Leaves a trail of enemies wherever he goes. Questionable temperament for the state’s highest office.

I’m not voting for the guy, but he did a couple of things this week I truly appreciate.

First, he unveiled the most progressive higher-education plan of any of the three Democratic contenders. And second, he made a practical, hard-headed, economic argument for a social safety net initiative — which is something Democrats almost never do.

It’s a shame, because there are solid, evidence-based arguments to be made. I mean, appeals to fairness and helping the unfortunate are fine, but they’re not enough.

But first, back to the college issue, which is one of the most crucial in terms of helping people achieve success AND boosting the economy. After all, employer after employer complains about the lack of trained workers. Getting more high-school grads into college is a sound investment in our own future.

Galbraith’s plan, unveiled Tuesday, would cover the cost of a college education for Vermont students at state colleges and universities, and offer reduced tuition for some UVM students.

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… and now the hard work begins.

The next governor of Vermont will find a big turd in his or her punchbowl next January. The loaf was delivered this week, courtesy of the EPA: detailed new limits on phosphorus pollution in twelve discrete areas of Lake Champlain.

This is one of the most impactful political stories of the year, but it got scant coverage in our political media; only VTDigger and VPR produced articles, and both lacked a comprehensive assessment of the new rules’ impact. The EPA is now in charge of a cleanup that Vermont has ignored for decades, and is only now addressing because it was forced to by the federal courts.

Yes, good old green old Vermont has been smothering its crown jewel in nutrient runoff for decades. The problem has been ignored by all previous governors; Peter Shumlin has taken a few initial steps, but nothing that will come close to meeting the EPA’s targets.

The piddly $5 million real estate transfer tax the Legislature enacted in 2015 to great fanfare is a drop in the algae-befouled bucket. The cleanup cost will be in the hundreds of millions, and we will also have to impose tough new limits on discharges from farms, developments, roads, and municipal wastewater treatment systems.

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Shummy just can’t help himself

From The Life of Shumlin, by Parson Weems:

“When Peter,” said she, “was about six years old, he was made the wealthy master of a hatchet! Of which, like most little boys, he was immoderately fond, and was constantly going about chopping everything that came in his way.

One day, in the garden, where he often amused himself hacking his mother’s pea-sticks, he unluckily tried the edge of his hatchet on the body of a beautiful young English cherry-tree, which he barked so terribly, that I don’t believe the tree ever got the better of it.

The next morning the old gentleman, finding out what had befallen his tree, which, by the by, was a great favourite, came into the house; and with much warmth asked for the mischievous author, declaring at the same time, that he would not have taken five guineas for his tree. Nobody could tell him anything about it. Presently George and his hatchet made their appearance.

“Peter,” said his father, “do you know who killed that beautiful little cherry tree yonder in the garden? ”

This was a tough question; and Peter staggered under it for a moment; but quickly recovered himself: and looking at his father, with the sweet face of youth brightened with the inexpressible charm of all-conquering truth, he bravely cried out, “I can’t tell a lie, Pa; you know I can’t tell a lie. A huge gust of wind sprang up out of nowhere and blew down your precious cherry tree.”

One of Governor Shumlin’s least endearing traits is his inability to avoid an expedient falsehood, even if it’s transparently obvious to eveyrone in the room. Well, once again he couldn’t help himself yesterday when touting a change in the estate tax that will give a bit of relief to rich folks and business owners.

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A bad session for Shumlin, but all was not lost

The media postmortems on Legislature ’16 are rolling in, and they’re not kind to Governor Shumlin.

The Burlington Free Press’ Sunday front page has a big ol’ photo of the Guv looking nonplussed, the bright lights showcasing the furrows on his brow, with a headline reading “BIG REQUESTS FALL SHORT.” The story emphasizes his pushes for legalized marijuana and divestment from some fossil fuel stocks, which both fell short.

Over at VTDigger, the headline slyly referred to Shumlin’s legislative accomplishments as “nothing burgers,” a phrase destined for his headstone. The story, by ol’ buddy Mark Johnson, was just shy of devastating.

While the governor touted numerous accomplishments in his final late-night adjournment address — and some lawmakers did too — many who serve in the Legislature saw something different this session: a once powerful chief executive weakened by a close election, who lost support on the left when he dropped plans for a single-payer health care system, was hurt by ongoing problems with the health care exchange and then saw any remaining leverage dissipate when he announced last year that he would not seek re-election.

Indeed, Shumlin’s 2016 agenda was largely jettisoned by lawmakers. But there is another way to look at the just-concluded session. It accomplished quite a few things that went almost unnoticed in Vermont, but would have been big news almost anywhere else.

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House conferees close the gambling back door

Sen. Kevin Mullin’s attempts to sneak pro-gambling language into a pair of unrelated bills has failed, thanks to the efforts of House conferees.

Mullin craps out.

Mullin craps out.

I first wrote about this last week; the day before yesterday, another Vermont media source finally decided to pursue the story. VPR’s Bob Kinzel had more detail than I did — although he focused on one of Mullin’s maneuvers and missed the other. Still, if you want more information, do read his piece.

To recap, Mullin slipped language into a consumer protection bill that laid out consumer protections for daily fantasy sports — an activity deemed by Eternal General Bill Sorrell to be illegal. Which seems contradictory: why regulate an illegal industry? (That’s the one Kinzel missed.) And into the big budget bill, he inserted language that would have allowed the Lottery Commission more leeway in placing electronic gaming machines in bars and restaurants — possibly including Keno and video poker.

The part I failed to catch was that the current gaming-machine pilot program is set to expire this summer. Mullin’s amendment would have removed the sunset and broadened the definition of acceptable machines. His amendment had the support of Lottery Director Greg Smith, who is under pressure to grow revenues.

Which, given the current EB-5 scandal, is kind of ironic. A central problem with EB-5 was that a single agency was tasked with regulating AND promoting the same activity. And here’s the Lottery Commission, regulating AND promoting the same activity. Conflict of interest, anyone?

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A little backdoor action at the Statehouse

We’re in the late stages of the legislative session, a time when everyone wants to hear the final gavel come down and get out of Dodge. And when a whole bunch of bills are flying from chamber to chamber, from committee to committee, providing plenty of opportunities for lawmaking legerdemain. Or, as one observer put it, “the time of year when stuff is going to be slid through the cracks.”

I hear of two provisions designed to open the door to expanded gambling in Vermont. Both are attached to seemingly unrelated bills. In both cases, gambling opponents are trying to keep their eye on the bouncing ball.

The culprit, it’s safe to say, is Sen. Kevin Mullin, Republican chair of the Senate Economic Development Committee, a staunch supporter of, and crafty finagler on behalf of, expanded gambling in Vermont. For a number of years, Mullin has been pushing to expand the definition of state-sanctioned gambling, by hook or by crook.

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