While not dire, Vermont must prepare for a challenging year
By Kevin Dorn
The national economy's sluggish performance is being reflected here in Vermont. At the recent Economic Outlook Conference experts on Vermont's situation predicted that rising gas prices, falling housing prices, and weak job growth are likely to challenge our economy.
While Vermont's economic situation is not as dire as some states', the Department of Labor announced recently that Vermont's workforce appears to have lost nearly 2,000 workers in the last year. These aren't jobs that went away: these are people who have stopped working.
Manchester is already feeling some of the effects of the economy's slowing. While a change in sales tax rules that exempted clothing also contributed, the town's local option tax total revenues of about $811,000 for 2007 represents a decline of nearly half a million dollars.
Manchester's concentration of retail and tourism businesses means the town's proposal to implement a local option tax on meals and alcohol can bring in revenue without unduly impacting residents, but tourism can be volatile when the national economy struggles.
The national economy, coupled with a shrinking workforce and projected revenue declines for state government, means Manchester's - and Vermont's - leaders will need to exercise prudence and fiscal restraint.
Governor Douglas made it clear in his State of the State Address that we are going to continue in the Vermont tradition of working together to turn a challenge into an opportunity.
The Governor's housing initiatives, including New Neighborhoods and Urban Homesteading, are designed to both address Vermont's housing crisis and spur job creation in the construction and related industries, without raising taxes. Despite the economists' predictions that home prices will decline, there is still a shortage of housing that working Vermonters can afford.
This also slows job growth. As we saw recently with Macro International in St. Albans, if companies can't find workers, they can't create jobs and may even be forced to leave Vermont to find employees.
New Neighborhoods would also help us in our efforts to attract and retain young people in Vermont, which is a critical issue for our future workforce.
Our PursueVT initiative is focused on both attracting young workers right now and laying the groundwork for more to stay in the future.
The Governor has laid out a series of proposals to achieve prosperity through affordability, and that includes keeping our state government affordable to its citizens. We're going to rethink, revitalize and reform the way we approach economic development.
For example, we've proposed modifying the Vermont Employment Growth Incentive program to make environmental services companies eligible for significantly larger financial incentives to create jobs here.
That's one way to do more with the same amount of money, and we're exploring others.
By making health care, homeownership and the tax burden more affordable - and by making focused investments in job creation and our natural environment - our families and our state will prosper.
Every challenge represents an opportunity and when Vermonters work together there is no challenge we cannot meet.
Kevin Dorn is Vermont's Secretary of Commerce and Community Development.
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