Commentary: $10,000 Bribe Undercuts Vermont’s Brand (June, 2018)

By Rob Roper

If I held up a cookie and said, “I’ll give you five bucks to eat this,” what would your initial re

Rob Roper

action be?More than likely, either “what’s wrong with it,” or “what’s the catch?” If it were a perfectly good cookie, why would I have to pay you to eat it? If it were really good, you should be eager to pay me. This is a fundamental flaw in the Remote Worker Grant Program that offers to pay people $10,000 to move to Vermont and telecommute to jobs out of state. It actually devalues Vermont’s brand.

What’s more, the $500,000 budgeted for this over three years would, if entirely successful, only add fifty people to the workforce over that period. According to Governor Scott, we need to add one thousand new workers every year to replace the 16,000 workers we’ve lost since 2009. So, what do you say to the 15,950 workers who don’t get a check? And, more importantly, what do you think they’ll say back?

This gimmick may get a lot of people to look at Vermont. Do a search and you’ll see stories by the Wall Street Journal, CNN, ABC, CNBC, Fortune, Forbes, and many other sites you may or may not have heard of. But, as 1960’s advertising guru Bill Bernbach said, “A great ad campaign will make a bad product fail faster. It will get more people to know it’s bad.” So far that wisdom seems to be playing out as the stories mentioned above tend to focus on the negative aspects of why Vermont feels it needs to resort to such measures, our high taxes playing the lead role.

Vermont’s first priority needs to focus on making our underlying product genuinely valuable to the customer, without the gimmicks.

There has only been one time in modern history in which Vermont has attracted a large mass of people into the state on the scale Governor Scott is hoping to do so: the hippie migration in the late 1960s and 70s in which an estimated 40,000 mostly young people came here over a roughly decade long period. What brought them here? Certainly, the stunning rural beauty and all it has to offer played a big part, just as it still does today. But, more fundamentally, they came because Vermont was cheap, and they were, for the most part, left alone to pursue happiness as they saw fit.

Lesson: if you want to attract a lot of young workers to our state, make Vermont a cheap place to put down roots, and leave people alone to pursue their ventures and create wealth – and keep it — free from a lot of official interference.

Vermont’s problem is that it has become one of the most expensive and difficult places to live for upwardly mobile, economically successful workers – the kind of people who pay taxes into the treasury, not draw them out — and it is governed by a bunch of busybodies who want to micromanage every aspect of your life, from the appliances you’re allowed to buy, to the types of electricity you’re allowed to use, to how you can contract for the work you do.

The Remote Worker Grant Program is absolutely right in one respect: its target audience. Vermont has a big advantage that many other rural states facing similar demographic problems in that we are within spitting distance of New York, a financial and entertainment capital, and Boston, a biotech and research capital, filled with workers who can telecommute or relocate small businesses if they so choose.

Ask yourself, if you were a money manager, or a graphic designer, or a code writer, or use your imagination… who loves to ski, hike, bike, what would entice you to move your career from Stamford, Connecticut, to the mountains? Probably the same thing that motivated your big employer to move from Manhattan to Stamford in the 1990s – significantly lower taxes and cheaper, better, more abundant homes for your employees (in this case, you). So, here’s an idea, lower taxes and reform regulations to make housing more plentiful and lower cost.

Another thing Vermont could do is make it easier to operate as an independent contractor, which is how many of these telecommuting jobs work. Unfortunately, reforming the regulations for independent contractors is something our legislature has been more than reluctant to do.

These aren’t the only options, but lawmakers must to do something fundamental. When Massachusetts wanted to shed its “Taxachusetts” reputation to attract more wealth creators its legislature first passed a 5% flat income tax. Only then did they advertise they were “open for business.” People took them seriously because they did something dramatic and relevant.

Vermont’s has to figure out what our dramatic and relevant action will be. Make it real. To quote Bill Bernbach one more time, “The most powerful element in advertising is the truth.”

– Rob Roper is president of the Ethan Allen Institute.

 

{ 3 comments… read them below or add one }

Deanne July 3, 2018 at 1:18 am

Don’t worry, Rob. It will only cost Vermont taxpayers $160,000,000 to buy the 16,000 people they want. And at that rate (50 every 3 years), it will only take 960 years.

Is there something in the agreement about how long they have to stay to keep the ten thousand bucks? Is it a lifetime commitment, or multigenerational? 😉

Reply

SBarrows July 3, 2018 at 1:55 pm

Take a cue from some of our neighbors. Mass, New Jersey, and New York. Exempt military retirement pay. Military retirees are well trained and educated individuals in the prime of their lives (35-45 years old) who are looking to start a new career. Give them a break on their retirement pay and they will join the VT workforce or create new businesses that in turn will boost our tax base.

Reply

DAVID NELSON July 5, 2018 at 2:28 pm

I was not aware of the fact there was $500k to give away in the budget. If those funds are available, would it not be a wiser investment to offer a rebate to someone who spent a pile of money on an Act 250 permit for a development which created jobs?

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