DOVER- Area legislators met with local business leaders at Dot’s of Dover for a breakfast discussion sponsored by the Mount Snow Valley Chamber of Commerce Monday morning.
As always, property taxes and economic development were among the top issues on the minds of local business owners, but several also expressed concern about bills under consideration in the House. One bill would establish a minimum “livable wage,” proposed at about $15. Another provision would raise the minimum wage to $12.50. Bill H.208 would require most employers to provide paid sick time, which would accrue at the rate of one hour for every 30 hours worked. Employees could accrue up to 56 hours per year. John Moran, of Wardsboro, is a co-sponsor of all three of the bills, although other local legislators expressed support for some of the provisions.
Several business owners, employers in the valley, expressed concern that the bills would burden employers, stifle economic development, and result in the loss of local jobs.
Without addressing specific concerns raised by attendees, Moran defended his support for the bills, saying that he has supported numerous economic development efforts over the years, many that benefited local businesses. But he said he also supports those who are struggling to get by. “Unfortunately, in our quest for prosperity, we are handicapped by a dysfunctional federal government of sequester and austerity,” he said. “I find such an agenda harmful to businesses and employees, especially in the ‘heat and eat’ cuts to our low-wage earners. Because of that failure at the national level, it falls, as it has in the past, to the states to exercise leadership.”
Moran said the General, Housing and Military Affairs Committee, of which he is vice chair, would hold hearings on the bills, and he urged constituents to attend the hearings and provide testimony. “I believe that everyone in this room and in the towns that I represent wants to have a vibrant and prosperous economy, and to be known as the business- and worker-friendly state.”
Moran said testimony had already closed on H.208, however, and later in the week the bill was passed out of committee. The version passed out included an exemption for employers with four or fewer employees, and a minimum waiting period before new employees can use their sick days. Moran said the bill is headed to the House Appropriations Committee and, depending on the action they take, may go to the House floor later in the session.
Responding to a comment about education taxes, Rep. Ann Manwaring urged business leaders to speak out on the issue. “I’ve been frustrated with the inability of businesses to take up the issue of property taxes as an economic issue,” she said. “Business leaders, please radar screen.”
Manwaring said some at the federal level have been “so focused on what Grover Norquist has been feeding them for so many years” that they haven’t realized that the consequence has been to increase the burden on state and local governments. “It’s all flowing downstream to the local level,” she said.
Manwaring said there were few places for legislators to find revenue that would ease the burden on the property tax, however. “Vermonters pay $1.5 billion in property taxes,” she said. “The income tax only generates $600 million. We’re not going to solve the property tax problem with the income tax.”
Sen. Bob Hartwell, of Wilmington, agreed with Manwaring’s assessment, and added that property taxes are “out of control” and an “economic threat” to the state. He said the education financing system, which is funded by the statewide property tax, “is so insanely complex it’s designed to resist reform, and to keep increasing.”
Hartwell noted that he had voted against the bill that created the state’s health care exchange system, and was glad that he had. “I don’t have to reiterate the failure of the roll-out of the federal system, and Vermont didn’t do much better. I voted against it because it pretty much knocked out the private sector and everyone was pushed into the exchange.”
Hartwell said that, although Vermont’s system was touted as reducing administrative costs, it has resulted in a new bureaucracy. “There are 232 people working for Green Mountain Care,” Hartwell said.
Hartwell said his fellow Bennington County senator Dick Sears, chair of the Senate Judiciary Committee, was working on legislation to deal with the explosion of drug and drug-related crime in the state. “The state police said there was an armed robbery every other day in January, four times the number of armed robberies in January 2013.” Hartwell said most of the money taken in the robberies goes to purchase firearms that are illegally exported out of the state.
Sen. Peter Galbraith also weighed in on the issue of the property tax. “It’s striking to think the property tax is the tax people hate the most, and the one tax we consistently increase. When the governor says ‘No new broadbased taxes,’ the property tax isn’t included. I have a bill that would close loopholes in the income tax that would result in $65 million more in revenue to be put into the education fund, and could eliminate the need for a property tax increase. That money would go to districts that hold the line on spending.”
But, addressing comments about the increasing burden on taxpayers, Galbraith said the state’s revenue stream is limited. “Why do we go back to the same sources for revenue? If you have some other source of revenue for us to consider, we’d like to know. We go where the money is.”
Galbraith said he supported the bill that called for a $12.50 minimum wage, rather than the bill that called for a “livable wage” of $15. He said the 1968 minimum wage in inflation-adjusted dollars was $10.80. “Our economy is twice what it was in 1968, so the $10.10 the president is calling for, or $12.50, is reasonable. But $15 might be a different kettle of fish.”
Galbraith said that in other states, such as New Jersey and Pennsylvania, that have raised their minimum wage jobs haven’t been lost, contrary to popular expectations. “In fact, there was an increase in jobs,” he said. “Minimum wage jobs today are in the service sector, and when you give those workers more money, they spend more, they spend locally, and you get a boost to the economy.”
Galbraith made the argument that a higher minimum wage will reduce dependency on state and federal programs, reducing the burden on taxpayers. “When McDonald’s pays minimum wage and tells them to sign up for LIHEAP and food stamps, as a taxpayer I’m subsidizing that. So a lot less money will go to subsidizing low-wage payers.”