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Thursday, October 04, 2007

Bernie & Tony

Antoniopomerleau_2 On Friday, Tony da' Pom, sorry, Antonio Pomerleau, celebrated his 90th birthday.

What a guy!

"So you gotta, you gotta take a gamble," he told Channel 3. "You gotta have a vision. You gotta look ahead. Yesterday's gone by. Today's gone by. So you gotta think of tomorrow."

Tony's a rags-to-riches story. Landed in Burlap in 1939, gifted in the ancient art of buying-and-selling. Real estate was his shtick.

Was running the city police commission when Bernie Sanders pulled off that historic, miracle mayoral victory in 1981.

"I owe my victory as mayor to Tony Pomerleau," Bernie told me the other day, "because we campaigned against his disastrous waterfront development!"

Every vote counted and Bernie won by just 10.

"But the truth is," said former mayor, now U.S. Sen. Bernie Sanders, "as soon as I won, uniquely from the opposition, Tony Pomerleau called me up, came to city hall and said, 'How do we work together?'

"And the truth is," said Sanders, "we worked to make major reforms to the police department, significant reforms."

No lie.

"Tony helped me on a number of key economic issues. We killed a trash-burning plant that would have been a disaster. I appointed Tony to be head of a committee to look into that and he did a very good job on that."

Yes, indeed.

Some may forget that back in those days - the early 1980s - the wall between Mayor Bernie Sanders and the Democratic/Republican establishment in the Queen City of Burlington was both tall and thick, at times resembling an Iron Curtain. And the fact Police Commission Chairman Pomerleau spoke with and worked with Mayor Sanders cost him.

Bernie_nov_1 "The Democrats and Republicans who had voted year-after-year for Tony to be a police commisioner abandoned him ‘cause he was working with my administration," said Ol' Bernardo.  "What is not well remembered is that Tony Pomerleau won reelection as a police commisioner with the support of all the Progressives. He got his position because of Progressives!

"Here’s a guy who was in his seventies. Worked with Democrats and Republicans his whole life, and yet he thought that it was more important to do what he believed to be right and stand up to people who had been his political friends and allies. That takes a lot of guts!"


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My God the Pomerleau, rags to riches story sounds almost exactly like the Richie Tarrant story. I wonder if Bernie would have been singing Pomerleau's praises if Tony had decided to run against Bernie for mayor in the 80's?
When I mention Tarrant I've now come to believe that the guy is pretty stupid...and I voted for him! For someone to take the personal abuse that he took during his campaign and his only crime was being successful. To then to hang around this ungrateful state and continue to donate millions of dollars to charitable causes....the man has to be pretty stupid. Vermont doesn't deserve him.

Doug Hoffer

Don't forget the millions that Vermont gave Mr. Tarrant. Thanks to the (absurdly wasteful) VEPC tax credit program, IDX was able to avoid paying $6 - $7 million in state taxes. That's lost revenue that wasn't available to fix bridges or solve other problems. And the deal was based on the assumption that IDX would not have expanded "but for" the tax credits. Interestingly, Mr. Tarrant later told the Wall Street Journal that he had no intention of expanding out of state.

So while we can thank him for his charitable gifts (hardly a burden for a guy worth hundreds of millions), let's not forget what we've done for him.


You don't like the program to offer tax credits to businesses who expect to expand in Vermont? Then go to the Democratically-controlled Legislature and get them to abolish the program. As I recall, neither Symington or Shumlin have introduced a bill to abolish the VEPC program since they've controlled the Legislature. And I believe the VEPC program was introduced during the Dean Administration.

There is a mechanism under VEPC for getting credits back from companies who don't expand as they promised or expected to do.

There is absolutely nothing wrong with the program in principle, since we are desperately competing with other states and foreign countries to keep jobs in Vermont.

Doug Hoffer

To: Vermonter

From your other comments, I know you understand how state government works. That is, even if the Leg. wanted to eliminate the VEPC tax "incentive" program, it would be vetoed by the Governor. The fact that it was first adopted during Howard Dean's tenure doesn't make it any better. [You may have noticed that I try to address issues rather than Party.]

But now that you mention it, a number of elected officials wanted to eliminate the program two years ago but could not get everyone on board. They ended up with a new version that (in some ways) is even worse, although it is somewhat easier to administer.

You are correct that there is a "clawback" provision but I can assure you that VEPC has not been very vigorous in using it. The law allows VEPC (nine individuals appointed by the Governor) to decide whether a company that has not met its obligations may be allowed to avoid recapture. Not surprisingly, they have "abated" a significant portion of the money that was to be recaptured.

Note: Last year I reviewed the minutes of VEPC meetings and they spend a great deal of time on this issue. It is very unusual for them to actually put a company into recapture. There are several ways VEPC can mitigate the penalties and they use every one of them (all of which are in statute so the Leg. is guilty too).

In my view, there is a great deal wrong with the program. I encourage you to read the three audits from the State Auditor, which raise very serious questions about this program. [Full disclosure: I was the principal author of the first review in 2000. The findings were based on an examination of all the available evidence, including materials not available to the public (secrecy is another problem with this program). Subsequent reviews had much more data to work with but were no less critical.] It is noteworthy that the three reports were issued by three different State Auditor's, including one Republican.

You attempted to justify VEPC by refering to competition with other states. But there is no public data set on the movement of businesses across state lines (go figure). As a result, we don't actually know the nature or extent of such activity. Based on the private data I've seen, the impact of interstate business movement on jobs in VT (and elsewhere) is insignificant (2% - 3%).

Furthermore, and more importantly, state taxes are a very small expense for the vast majority of businesses, including the big guys. See Vol. 1 of JFO's Tax Study.

I'm not opposed to business or economic development. In fact, I want the scarce resources we have to be maximized. In my view, VEPC is NOT the best way to help create jobs in VT. There are many good alternatives, some of which are supported by businesses that are unafraid of challenging the Chamber / AIV party line (e.g., VBSR). And these are folks who pay taxes and meet payrolls (some big ones too).

There is a great deal of misinformation out there about this subject. But there is a rich academic literature that is usually ignored because anecdotes and slogans are so much easier (and usually more effective).

Finally, we are no longer competing with other states. We are competing with other countries. It is labor costs that matter, not taxes. We have misdiagnosed the problem and applied an old and ineffective remedy that does nothing to help.


Funny, OMYA just decided to move 75 clean, well-paying (management) jobs to Cincinnati (another state, NOT another country). I have spoken to a friend who is in management and whose job is one of the ones transferred. He believes that OMYA's decision was because of the business climate in this state. I believe him.

Whether this is a VEPC issue, I don't know. But could Vermont have avoided this (and the Capital City Press debacle a year or so ago)? I think it might have.

Doug Hoffer

OMYA consolidated non-production jobs at the other location. Happens all the time in big companies. It may be convenient to blame it on the "business climate" but we need hard information rather than supposition.

Note: Act 60 reduced OMYA's taxes considerably by eliminating the machinery & equipment tax, which was about half of their liability.

Capital City Press moved (and reduced) production jobs because their business is shrinking. They did mainly academic and other journals, many of which are now available electronically.

The "business climate" mantra is common but rarely (if ever) defined. We know it's not state taxes (too small for most) so what exactly are you (and others) talking about? There are lots of successful companies in VT and many of the owners say this is a great place to do business (check with VBSR).

As I stated earlier, I've done a Lexis-Nexus search of all major daily papers in America and found that Chamber types complain about the "business climate" almost everywhere. Is it really possible that the entire U.S. is anti-business? I don't think so.

This is (and has been) a very loose "campaign" by some business interests throughout the country to lower taxes (shifting them to families & individuals) and to reduce environmental & labor regulations.

Here's a thought: Why not ask some of the businesses who complain to tell us exactly what they pay in state taxes. Without that, it's just anecdotes - not evidence. JFO's Tax Study (Vol. 1) showed clearly that state taxes are really not a big deal for the vast majority of businesses (and that many of the biggest pay almost nothing).

Having said that, I'm sure that state agencies could be more user friendly and more efficient. But I suspect that's common everywhere.

So why not insist that the "business climate" argument be supported with facts or just give it a rest?


I have a source in management at OMYA who just lost his job because Vermont is anti-business, and you sit there at your desk in Burlington and dispute it.

No matter how many companies shift their jobs to other states, you'll deny that it has anything to do with the tax and regulatory environment in Vermont.

You give it a rest.

Doug Hoffer

Please describe / define anti-business. Ask your source to tell you what OMYA has paid in state taxes for the last few years. Funny how that data is never disclosed. Nevertheless, people like you take them at their word that VT is anti-business. Forgive my language, but that's just bull____.

Also please tell me how many VT companies have shifted jobs to other states in the last five years. I know you can't because, as I've pointed out, there is no such public data.

I will challenge your source unless and until you can do more than offer anecdotes. And why does it matter that I'm sitting at a desk in Burlington? Either you have facts or you don't. That's lame.

Don't you get it? They're playing you. Without hard data, it's just a scam.

Seriously, this is a large multi-national firm. According to the JFO report (based on data from the Tax Dep.), 46% of such firms paid only $250 in state corp. income tax in 2003 (latest data available). Does that sound anti-business to you? Give me something real.

As for the regulatory environment, would you prefer that local residents just ignore potential health risks? Even ANR has decided that OMYA must play be the same rules as everyone else. Is that anti-business or just good government? I assume you agree that public health must trump business.

I have nothing against OMYA. But I do have a problem with the use of slogans like "anti-business" when the facts are not available. And so should you.


Seems like Vermonter's friend is painting a broad brush on Vermont being anti-business. It's not as black and white as this person makes it out to be. Some businesses do well, others do not and you gotta look at each case individualy. OMYA is certainly not fit for this state and IMO, this is a business Vermont can do without (especially how they treat local residents.)

Calling a state "anti-business" is not an excuse for poor business practices and it sounds like Vermonter's friend wants to shift the blame elsewhere. Humility goes a long way. Passing the buck doesn't. Besides, it's a knee jerk reaction that does nothing to contribute to a meaningful discussion on making business work in Vermont.


Oh, so now Brattlerouser (what's your name?) decides that OMYA and its many high-paying jobs are not "fit" for this state. OMYA was here before you were, Brattlerouser, and so was logging and various other forms of economic activity that involve more than just serving gourmet coffee and attending protests. You do not decide which companies belong here and which don't. Tough.

"Also please tell me how many VT companies have shifted jobs to other states in the last five years. I know you can't because, as I've pointed out, there is no such public data."

OMYA shifts 75 jobs to another state this year. Capital City Press shifts over 100 last year. Read the papers lately?


Vermonter, you're shifting the blame from poor business practices to a lousy economic climate. I know Capital City Press shifted 100 jobs out of the state but you're still painting a broad brush regarding Vermont's economic climate.

My name is none of your business. You chose to act like a petulant baby and Freyne called you on it. Deal with it.

Doug Hoffer


It is unfortunate that we lost those jobs. But you did not answer my question. You can't (again, no public data) so you rely on two isolated incidents to try and make your case.

Here are some facts (latest available). From the 1st quarter of 2005 to the 1st quarter of 2006, we lost 20,994 private sector jobs (cutbacks & closings). [Note: 23,124 were created during that period from expansions & start-ups] Thus, even if we count them as occuring in the same year (which they didn't), the 175 jobs lost at OMYA & Capital City Press represent less than 1% of all jobs lost.

All such losses are regrettable. However, the constant churning in the job market inevitably includes such changes (whether here or elsewhere). Indeed, we don't know how many jobs were lost in other states due to changes that may have benefitted us.

And you have not acknowledged my main point. Namely, that most such job losses are due to overseas competition - not between states. From 2002 to 2006, VT lost at least 2,200 jobs to foreign competition (counting only certified Trade Act Petitions).

It's easy to assume the (undefined) business climate is to blame, but that's just too simplistic and is not supported by the evidence. Why are so willing to believe the hype in the absence of solid data?


You're the petulant baby with your incessant, nauseating, and shrill screaming about impeachment, Brattlerouser. Calling Welch a "traitor" and saying it's okay to compare Symington to a Nazi sympathizer is the very definition of petulant infantilism. Deal with it.


"Why are so willing to believe the hype in the absence of solid data?"

You could ask the global warming crowd the same question. But regardless, one of the issues here is not so much what the actual business climate is in VT, but what the percieved business climate is to prospective businesses that maybe looking into coming here. We can have a great business climate, but if the rest of the world thinks it is horrendous it does us little good. Example, the proposed tax on Entergy made headlines everywhere, most of them portraying VT as anti-business. Whether or not that is reality doesn't matter, to many businesses it is enough to deter them from coming here. In a sense, we are anti-business as that is the image that is put forth.

Doug Hoffer

Fair point. So why are the very people charged with promoting VT the ones who consistently portray us as anti-business? The data in the JFO tax study makes it clear that Vermonters pay much less than many other states in state income and sales taxes. But the Governor and others persist in talking about the flawed per capita data rather than celebrating our more progressive tax structure. It would appear that some officials want to promote the anti-business image. I suggest it has more to do with internal politics than anything else. Is this in our best interests? I think not.

And BTW - We have no idea how many businesses come, how many don't, and what the job impacts are. By suggesting that the mantra about the bad business climate costs us jobs without supporting evidence, we perpetuate the myth.


"By suggesting that the mantra about the bad business climate costs us jobs without supporting evidence, we perpetuate the myth."

I totally agree. However, I'm not sure that it is internal politics. I mean Bernie ranting and raving about big business certainly does not help the image of the state as being business friendly. He is not the only one, nor can the blame be placed solely on the Gov, or the legislature. A few meaningless incentives would go a long way to promote a more business friendly enviornment.
For example, a tax structure agreement where a business pays 75% of taxes the first year, 80% the second, etc until they reach the 100% mark. This is a new business so even 75% is "new income" which is better then the 0% before the business opened up. The promote it. One issue is the regulatory and permitting process. THis needs to be eased to make it easier for businesses to start up as well.

Comparing state to state taxes is a hard thing no matter how you do it. Alot depends on how you pay for things. And how many fees there are. SOme states charge low sales tax, but vehicle registration is a few thousand. You can't talk about VT tax without taking into property tax. I put little faith into tax reports until a comprehensive one is done that looks at it all.


> You're the petulant baby with your incessant, nauseating, and shrill screaming about impeachment, Brattlerouser. Calling Welch a "traitor" and saying it's okay to compare Symington to a Nazi sympathizer is the very definition of petulant infantilism. Deal with it.

Wow. I rest my case folks.

Doug Hoffer

Bernie's "rants" are entirely different then the Chamber or the Governor. Bernie talks about the actions of some big businesses, not all. And he always has the facts (e.g., companies cutting benefits, changing retirement plans, etc.). The other guys just have slogans with no data. Moreover, lots of VT business owners support Bernie because he in turn supports small locally owned businesses. And of course Bernie is not trying to influence the VT legislature, which is what the other guys are doing.

As for incentives, I suspect most new businesses don't have taxable income in the early years so it wouldn't help. In addition, unless you're a really big business, state corp. taxes are really quite small. According to Vol. 1 of the Tax Study, in 2003 there were 405 instate C corps with taxable income of $25k to $100k; they paid an avg. of $4,628 in taxes. That's a very small % of total sales / revenues (i.e., to have $50k in taxable income, you have to 10 to 20 times that much in sales).

I certainly agree that the permitting process should be as fair & efficient as possible.

Re. state to state tax comparisons: Vol. 2 of the Tax Study covers fees and sales taxes as well as income tax. And they account for the differences in how sales taxes are applied (e.g., VT exempts food & clothing, some others do not). But I suspect that adding the data on property tax would help rather than hurt VT because the statewide educ. tax is income sensitive (unlike municipal non-educ. taxes).

The JFO report is not the end of the discussion but it provides really useful data. Although not comprehensive, it's a lot more useful then the flawed per capita stuff we've been getting. One thing at a time.


"Wow. I rest my case folks."

What I said was quite accurate. And stop constantly seeking the approval or validation of a group. It's pathetic.


"Bernie talks about the actions of some big businesses, not all."

Bernie rants about "business," period. It's all one big evil terrible thing.

I don't recall him every saying that any big business was "good."

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