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JAMES H. DOUGLAS
GOVERNOR
State of Vermont
Governor Announces Economic Growth Initiative
Essex Jct., Vt.
At the 2008 Vermont Home and Garden Show Saturday, April 19, 2008, Governor Jim Douglas
presented a 15-point economic package to encourage growth, create jobs and help
Vermont emerges from the current national economic challenge with a stronger
and more resilient economy. In total, the package has the
potential to generate more than $214 million in direct economic activity and
millions more in indirect economic multipliers.
The text of the Governors
announcement is below.
###
JAMES H. DOUGLAS
GOVERNOR
State of Vermont
OFFICE OF
THE GOVERNOR
Official Statement of the Governor
Announcing an Economic Growth Initiative
Saturday, April 19, 2008
As Governor, I have no more important
job than securing and strengthening the economy for all Vermont families. Indeed, the foremost
responsibility of all elected
officials is to tackle the economic challenges that face our state. And
the dimensions of our current challenge are clear.
Over the last several years weve
taken a number of positive steps to make our economy stronger, but the unusual
conditions of the national economya sub-prime mortgage crisis, spiking
energy costs, and an international credit crunchrequire Vermont to take decisive
action.
As the national economy softens and the
country confronts a recession, our families are feeling the economic squeeze.
Vermonters want Montpelier
to take immediate and aggressive steps to strengthen the economy, create jobs
and provide relief from rising costs for those who need it most. Those
actions will be my main focus with the Legislature in the coming weeks.
The majority in Montpelier must understand these economic
realities and must refocus their attention away from boutique issues,
endless studies and pet projects; they must join me in the hard work of
economic relief.
On Tuesday, we heard from the
States economists who reported that Vermont would not be immune from the effects
of this national downturnconfirming what Vermonters already feel at the
gas pump and grocery store.
It may not be a problem of our making,
but some of the solutions to the recession are in our hands today.
Thats why, in anticipation of Tuesdays economic analysis, I asked
my team to pull together a robust and responsible plan to get Vermont back on track.
I asked them to reach beyond the usual
solutions of Montpelier.
I told them clearly and this plan reflects it that Vermont cannot tax or
regulate its way out of this downturn.
We must promote business growth.
We must welcome new jobs and new industries. We must tear down barriers to
recovery, and keep them down for a
return to prosperity. We must control spending and lower taxes. And
we must work tirelessly for the people of Vermont.
Today, I present a 15 point initiative
that will encourage immediate economic growth, create jobs, and help to ensure
that Vermont
emerges from this challenge with a stronger and more resilient
economy. In total, this package has the potential to generate
more than $214 million in direct economic activity and millions more in
indirect economic multipliers.
The proposals I present today are by no
means the only steps we can
takein fact, there is more we can do over the long termbut these
are steps that we can take before the Legislature adjourns.
Today, I offer the Legislature a simple
invitation: join me in helping Vermont
become the first state to emerge
from the national recession. Join me in shaping an economy for the
future. Join me in the hard work we were sent to Montpelier to do.
***
Expanding the economy requires
that we put homeownership within reach of every family and help those who may
be perilously close to seeing that dream slip away.
With the lowest foreclosure rate in the country, Vermont has done much better than other
states. Because of our strong consumer protection laws Vermont continues to have one of the lowest
percentages of sub-prime adjustable rate loans of any state in the
country. Nevertheless, Vermonters have not been entirely immune from
predatory lending practices or the repercussions of the national economic down
turn in the real estate markets. I believe we must do more to help
families at risk of losing their homes.
Thats why I am pleased to announce today the creation of the Vermont Mortgage Assistance Program. This
program will have a dedicated Mortgage Assistance Specialist within the
department of Banking, Insurance, Securities and Health Care Administration
(BISCHA), who will staff a new toll-free assistance line for Vermonters who are
at risk of defaulting on their mortgage. That number is
1-888-568-4547.
Ive asked the Banking Division to help Vermonters on the brink
of foreclosure negotiate with their lenders 60 day grace periods. This will
provide relief and time for our mortgage assistance specialist to help
homeowners and lenders map out other financing mechanisms and alternatives to
foreclosure.
***
In 1976, as my wife Dorothy and I were
just starting our family, we struggled to find a lender to finance the purchase
of our first home. Luckily, the Vermont Housing Finance Agency was there
to help. Through one of VHFAs assistance programs, we were able to
buy our home in Middlebury that we still live in today.
During this economic crunch, we need to
extend assistance to homeowners who are having trouble making ends meet or
first-time buyers who need an extra boost. Through VHFA, I am proposing
to leverage state retirement funds to provide $17.4 million in additional capacity
that will provide affordable and responsible financing and refinancing options
for low and middle-income Vermonters.
This initiative will make $10 million available for Vermonters
to finance manufactured homes and an additional $7.4 million available for cash down
payment, closing or repair assistance to other borrowers.
Im also proposing that we pledge a
portion of the States moral obligation commitment to back $30-$60 million
that the VHFA can use to provide low interest mortgage financing to eligible
low and middle-income borrowers.
These targeted proposals are an important
bridge for those Vermonters who need a helping hand to afford their first home
or simply to stay in the home they love.
***
Safe and affordable homes are important economic assets for families,
peace of mind for workers who want to live near their job and their
childrens school, and important recruiting tools for
employers. The economists have been clear: housing development and
related industries are key to our economic success, and making homeownership
more accessible to working Vermonters has to be a significant piece of our
economic growth strategy.
The problem we have is a simple one: Supply. There just
arent enough moderately priced, affordable houses being built. Permitting
costs and a short supply of developable land are instead driving the market to
produce expensive homes that are priced out of reach of working Vermonters.
Ive advanced responsible, common sense reforms to address the
housing crisiswithout increasing the tax burden. The most
important proposals are the creation of a land bank to make surplus state land
available for housing, and the New Neighborhoods initiative to expedite
permitting for housing in existing residential areas.
I again call on the Legislature to pass the updated New Neighborhoods initiativeor
something substantially like itthat streamlines our permit process and
provides incentives for communities to approve new construction.
They should also act on my Urban Homestead proposal. All
throughout Vermonts
downtowns there are buildings with thriving commercial space on the first floor
but underutilized space on the upper floors. By providing Urban Homestead
tax incentives, we can encourage first-time homeowners to invest in these
spaceshelping to significantly increase economic activity in our
downtowns and village centers.
The economic value of these housing and job creation provisions alone
are very substantial. The Agency of Commerce and Community Development
projects that over the next year the New Neighborhoods initiative can result in
more than 400 new homes, create more than 600 new jobs and inject into our
economy nearly $22 million in direct construction wages, while adding $44
million to the grand list. Over three years, this initiative could result
in 1,200 new homes, over 1,000 new jobs and $90 million or more in construction
wages.
I want to thank Senator Illuzzi, chairman of the Senate Economic
Development Committee, for proposing language that moves the pending housing
bill in the right direction.
The House, on the other hand, has resisted this idea. But
Im hopeful the Speaker will recognize that now is not the time to erect
barriers to job creation and economic growth. Now is the time to remove
these barriers and put the economic security and prosperity of our families
ahead of politics.
***
To help create more jobs, I also call on
the Legislature to pass my proposal to immediately target up to $10 million in Vermont
employment growth (VEGI)
tax credits toward Vermont
businesses that use environmentally friendly processes or create
environmentally friendly technology. And I will also present to the
Legislature Tuesday a package establishing Opportunity ZonesIndustrial facilities
that have been vacant for five years or more and can be renovated and leased
tax free to employers who locate there and create more jobs.
***
The Vermont Economic Development Authority (VEDA) can provide an economic
stimulus by offering very low-interest capital to businesses. The Economic Growth Subsidy Program I propose would offer $18 million in low
cost capital for business expansion and start-ups. These resources are a
proven means of stimulating business capital investment, which in itself
encourages additional economic activity.
***
In addition, I am offering a Targeted Manufacturing Payroll Tax Credit
designed to provide support to manufacturing companies in areas of our state
with the highest unemployment rates. These companies are particularly
important to their communitiesin many cases employing multiple
generations of the same familyand they are important to the
manufacturing legacy of Vermont.
Based on an analysis conducted by the Department of Labor, this 2%
credit on taxable payroll would apply to manufacturers in many northeastern and
northwestern communities.
***
Vermonts
wood product industry has faced difficult times in recent years. I will
be asking the Agency of Natural Resources to continue to increase the amount of timber
offered on state land each year. This will be done in a
sustainable manner, in keeping with our commitment to the health of forest
ecosystems. By extending the States forest resources responsibly,
we can provide an important opportunity to an industry that is essential to the