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More bad news from Vermont businesses

11/26/02 12:00AM By Timothy McQuiston
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(Host) Commentator Tim McQuiston says that from Brattleboro to Randolph, from Bennington to Island Pond, a lot fewer people these days are saying, "I work up to the plant."

(McQuiston) In the category of: "Could it get any worse for Vermont?" Chesapeake Hardwoods of Hancock has announced it's pulling out of Vermont, essentially because it can do business better elsewhere. The CEO was blunt: the taxes are too high, the regulations too onerous, and the political atmosphere in Vermont is not conducive to good business.

This is on top of similar statements by Ethan Allen's CEO. Ethan Allen is still a major employer in the Northeast Kingdom, but it's recently closed two of its plants and laid off workers. The implicit threat by Ethan Allen's Farooq Kathwari is this: Make Vermont a better place to do business or I'll pull the whole operation out of Vermont.

And there's more bad news from Brattleboro. The paper mill SCA has recently announced it would close its huge facility along the Connecticut River and move the operation to Alabama. Just up the road, Northeast Cooperatives is asking its members to merge with United Natural Foods, which is in New Hampshire. Its Vermont facility is a big, relatively new warehouse that will be vacated. Never mind other news in the last couple of years by IBM, Ben & Jerry's, Burton Snowboards, Stanley Tools, Bombardier, and others that have cost Vermont over 6,000 jobs in less than two years.

And here's maybe the cruelest cut of all. Perhaps it's just a coincidence, but a subscriber to my magazine recently canceled her subscription because she moved out of Vermont. Here's what she wrote: "Please discontinue my subscription. The smartest decision I ever made was moving my business out of Vermont." It doesn't get any harsher than that.

When he takes over as governor, Jim Douglas will have a mountain to scale. One of the principal targets of his gubernatorial campaign was the job done by the Dean administration in the area of economic development. The problem for Douglas, of course, is that now he has to do something about it. The mountain is right in front of him, he's got his crampons buckled tight, he looks thoughtfully up at the rocky summit and no doubt wonders how he's going to get there. CEOs and owners want lower income tax rates, manufacturers want electric rates cut, developers want friendlier regulators, and Douglas is supposed to do it all while the economy stays soft and tax revenues remain unreliable.

We'll see what will happen over the next two years. It will be hard to change tax structure and harder still to alter the perception of Vermont in the business world. Jim Douglas won't even be governor for another month and a half. But already the clock is ticking on economic development. And the honeymoon will be short.

This is Timothy McQuiston.

Timothy McQuiston is editor of Vermont Business Magazine.
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