(Continuing site policy of promoting diaries from officeholders and candidates – promoted by GMD)
Emerson Lynn wrote an wrote an editorial about Burton Snowboards "leaving" Vermont that highlights the misconceptions I hear from people around the state.
Burton is not leaving. They are consolidating their manufacturing in Austria and China, a move that will cost us 43 jobs. Jon Margolis wrote an excellent analysis that is available at Vermont News Guy.
Burton will keep their corporate headquarters and their research and development operations in Vermont. They are going to expand their research and development operations to take advantage of the research and development tax credits I have championed.
Doug Hoffer wrote a response to Mr. Lynn I want to share with you that makes it clear that Vermont policies are not the reason Burton made their decision.
Sincerely,
Susan
Doug’s letter is below the fold.
Mr. Lynn
If you consider your piece grounded in facts then I'm glad you're not a legislator.
First, your singular focus on Vermont has blinded you to events in other states. For example, from 1998 to 2007 (latest data available), there were 3,171 VT jobs lost to offshoring (U.S. Dept. of Labor, Trade Adjustment Assistance). During that same period, New Hampshire – that wonderful tax-free haven – lost 8,309 jobs to offshoring.
Figures for other New England states:
CT -11,861
ME -13,481
MA -30,027
so I guess it's not just Vermont, eh?
Second, you said "utility costs matter."
All costs matter, but some costs are more equal than others. According to the 2008 Annual Survey of Manufactures (Census), electricity represents 1.7% of revenues for wood product manufacturers.
Thus, if we could wave a wand and reduce that cost by 20%, the savings would be the equivalent of one third of one percent of revenues.
However, that's not an issue for Burton because electricity is actually more expensive in Austria than it is in the U.S. (U.S. Dept. of Energy, EIA).
Third, you said "tax policies matter." Of course they do. But here again, you've made an assumption not supported by any facts.
For some businesses, federal taxes matter, but state business taxes are quite modest. Of course, we don't know what Burton pays (convenient for you I suppose), but we do know that state corporate income taxes have declined significantly as a percentage of GSP in every state in America (see ITEP, http://www.ctj.org/pdf/corp020…
BTW – For the person who posted the statutory top marginal rates for the U.S. and Austria: It is NOT the statutory rates that matter; it's the effective rates.
This is exactly why the governor's endless screed about Vermont income taxes is so lame. We have a high top rate (now 8.95%) but the effective rate for those earning over $500,000 is 5.3%. That's also one of the reasons the business climate rankings game is so misleading; they rely on the marginal rates instead of the effective rates.
Fourth, you complained about the Legislature considering paid sick days. I guess you didn't know that Austria has had that for years, along with five weeks of vacation.
Fifth, you said that the "Lack of health care competition matters." I assume you're joking. Austria has a tax-based national health system and they spend half what we do overall.
Indeed, that may be important because Burton (presumably providing good benefits) can undoubtedly save money in Austria by NOT having to pay directly for America's bloated health insurance. Austrian firms pay more than twice U.S. payroll taxes but it's certainly less than the combined cost of U.S. payroll taxes and insurance premiums.
Sixth, did you know that from 1998 to 2008, Vermont's inflation adjusted per capita GDP grew 29% compared to New Hampshire's 17%? (U.S. Dept. of Commerce, Bureau of Economic Analysis) How could that be if New Hampshire is so much better than Vermont?
Seventh, in the last five years, NH has lost 20% of its manufacturing jobs (16,300); During that same period, Vermont lost 7,100 manufacturing jobs (19%).(VT & NH LMI/CES) How can that be if Vermont is so bad?
And so on. Are there problems? Yes. Are they unique to Vermont? No. So why must you persist with this tired line about Vermont being anti-business? It really doesn't help solve problems.
Doug Hoffer
Doug should be our top economist. He knows what he is doing.
> Burton will keep their corporate headquarters and their research and development operations in Vermont.
Of course – the closer a job gets, to the people making the decision to outsource it, the less likely it is to actually be outsourced.
When someone actually outsources their own job, THEN maybe I’ll believe their sob story about how “they just did it for the good of the company”.
This is great. Now that Ms. Bartlett has begun to use Doug Hoffer’s analysis, I can only hope she will begin citing some of Doug’s other more recent findings. For instance, VERMONT ISN’T ANTI-BUSINESS!
It is encouraging to see you choose such a powerful and intelligent voice, Senator Bartlett. Mr. Lynn has long been an apologist for the administrations most empty-headed assertions. This time he’s really gotten himself in over his head!
Burton is moving jobs to two very different non-free market economies.
Austria has had a surplus of ski making capacity since the downhill ski bust of the late 1970s. In Austria, they take care of workers who lose jobs or work hours. Every Austrian has unemployment coverage, job training, health care, and retirement pay guaranteed by the government. Because that’s expensive, for 30 years, Austria has been offering all kinds of incentives to anyone who can use that surplus ski manufacturing capability.
China, on the other hand, is continuing a tradition of very bad government by abandoning its workers to pollution, job insecurity, and injustice, leaving them to find their way on their own. They keep the social costs of all this off the books, to make them appear to balance. Making labor costs appear lower than they are is a large part of their effort to get our jobs. Eventually, these costs will reappear for future generations of Chinese to pay. Then, the plan will be to blame someone other than those in power. Guess who that will be! The “free market” advocates have successfully defrauded us by peddling China as “free market” when it never has been. Our debt to a foreign government which is not “free market” will be used to chain us to the mistakes China is making today!
Do we want to live as we used to, and as Austrians still live, or do we want to join the race to the bottom?
Do we want government to represent us, or to be an advocate of avarice?
We are being asked to enslave ourselves and our children.
It’s time to wake up!
I think Doug Hoffer’s analysis is great.
Question is, did Bartlett’s campaign get his permission to use his letter in furtherance of said campaign?
NanuqFC
My words are mine own, nor yet to be bruited about for divers purposes lacking mine own voice and mine own wit to defend. ~ Anon.
One could assume that if he published it the letter is in the public domain, as is yours, as is mine. You have my permission to reply.
Has anybody heard anything from those three companies that this Bartlett person said needed millions really quickly? Like 12 million or some such nonsense. I thought the hiring would start once they got their tax breaks? Whats a few million get a person these days?