Thursday, November 19, 2015
Posted By Kathryn Watson On 12:20 AM 11/19/2015
Only a mile expanse across the Connecticut River separates Lebanon, N.H., from White River Junction of Bernie Sanders ‘s deep-blue Vermont.
Bustling stores line the New Hampshire shore where there is no sales or income tax. About the only notable highlights on the desolate Vermont side are a courthouse and railroad.
It’s a grim but telling microcosm of Vermont’s economic climate, where young people are leaving for the higher-paying jobs that fled the Green Mountain State years ago. “Everybody here believes high school graduation means your kid is about to leave,” John McClaughry, longtime Vermont resident and vice president of the right-leaning think tank Ethan Allen Institute, told The Daily Caller News Foundation.
“We’re the second-oldest state by median age, just because our young people are seeking opportunity somewhere else,” he added.
Sanders has been a major political power in Vermont for more than three decades. His political career began as Burlington, Vermont’s mayor in the 1980s. Then he served as the state’s lone congressman in the 1990s and early 2000s.
The self-identified independent socialist, who is now seeking the 2016 Democratic presidential nomination, was elected to the Senate in the Democrats’ 2006 sweep into power in both houses of Congress. “It has helped to push the whole culture to the left,” McClaughry said.
At first glance, Vermont’s economy looks good. The September unemployment rate of 3.7 percent is among the nation’s lowest, while the median household income is about $1,000 above the national average at $54,000.
But that doesn’t tell the full story.
Vermont’s homogenous population — it’s 95 percent white — is probably the biggest factor in its low unemployment rate, University of Vermont Economist Art Woolf told TheDCNF, and is why the state tends to do well in studies comparing states’ income inequality, Sanders’ top issue.
Even so, legions of Vermonters are giving up looking for work, Woolf said.
Private-sector employment shrunk 1.2 percent from 2000 to 2011, while government employment grew 7.5 percent, according to data from the Small Business Administration.
White-collar jobs, the kind created by corporations Sanders warns against, never consider locating in Vermont or have already moved, McClaughry said.
C&S Wholesale Grocers, once the largest locally based company in Vermont and one of the largest wholesale grocers in the country, moved its headquarters and 400 jobs 30 miles away to King, N.H, in 2009. The company’s CEO cited New Hampshire’s lower corporate taxes, lack of a personal income tax, and more available land.
“Now there was a time when you were running a company you had to look out the window and watch the workers,” McClaughry said. “With modern technology, that’s not so any more.”
The state’s costly regulatory climate and high taxes have landed it in 49th or 50th place every year since 2008 in the American Legislative Exchange Council’s annual state economic outlook rankings.
“Our regulatory system sets up really high barriers to any kind of new economic growth,” McClaughry said. “The remedy has always been under the Democrats that if you have a worthy (eco-friendly) project, we’ll give you all kinds of incentives to pay for the cost of meeting the ridiculous requirements.”
Vermont’s 8.95 percent state income tax rate is the seventh highest in the country, according to the Tax Foundation. The state’s projected 2.7 percent growth rate ties it with seven other states as the fifth-slowest, according to usgovernmentspending.com.
Vermont’s liberal policies, small size, homogenous demographics and low birth rates make it more like a small European country than a state sometimes, Woolf said.
Sanders often points to Denmark as the model for America’s future. It’s already on display in Vermont.
“We have a kind of an ethos of the role of government,” Woolf said. “We believe in kind of a social welfare government, because we do have high taxes and high spending.”
Vermont’s isolated rural beauty is attractive — but it comes at a price.
‘There’s certainly an appeal, but you’ve got to figure out how you’re going to support yourself,” McClaughry said.