— Rep. Steve Berry, Manchester, Arlington, Sunderland and Sandgate
Going out and about the District and the State, I hear some folks speak (more non-business owners than not) about Vermont being bad for business. In speaking with many of the small business owners, however, that is not what I hear.
We can always do more to give breaks to our small businesses, cut down on paperwork, and lessen tax burdens… but let’s explore the question: is Vermont small-business unfriendly?
On Wednesday, May 18, 2016 Vermont Business Magazine’s, Vermont Biz website ran an article in which there was this statement “Vermont's small businesses are the best credit risks in the nation.” The examination into business health in Vermont and the rest of the United States was conducted by two well-respected business organizations, Experian and Moody, that joined together to do the assessment. In their recent quarterly review Experian/Moody's Analytics describes how their statistics are derived. One company “leverages a combination of business credit data (including credit balances, delinquency rates and utilization rates) and the other offers macroeconomic data (including employment rates, income, retail sales and investments) to provide a more accurate assessment of the health of small businesses.”
The Experian/ Moody quarterly “benchmarks the overall financial health of small business, identifies emerging trends and provides insight into what these trends mean for small businesses and the economy as a whole. The states with the highest average business credit scores were Vermont (62.6), North Dakota (61.8) and South Dakota (61.7).” Now that’s impressive!
The article quoted Mark Zandi, chief economist for Moody’s Analytics, who reports on the Vermont economy frequently. Zandi wrote, "Small business credit conditions continue to improve, and near-term prospects are good." He writes, "Delinquencies and bankruptcies have declined in most industries and regions of the country for more than a year.” “The energy industry (nationally) is the only exception. There are threats to the positive small business credit outlook, including prospects for rising interest rates and volatile financial markets, but those threats appear modest."
Vermont is ranked number 1 in favorability for small businesses in the Experian/Moody’s Analytics for Spring 2016. Vermont has been previously ranked the nation top state in per capita job creation (2011) with approximately 13,000 Vermonters employed at that time in the green sector that is continued growth since those statistics were offered. Vermont last year was ranked number 5 for business start-ups in the USA according to the Kauffman Foundation up from 12th the previous year.
When you hear people talk about how bad Vermont is for business, please do a bit more digging and take a look at the 2015 U.S. Clean Tech Energy Index as one indicator of Vermont’s business health. Also, take a look at Moody’s 2015 Financial Summary and Rating Rationale for Vermont. For those who missed it, Vermont received their Aaa Bond Rating with this explanation: “The Aaa rating reflects Vermont's strong financial management, which features conservative fiscal policies, consistent governance, and a proven commitment to maintaining healthy reserve balances. The state's debt is modest, and its economy, while small for a state, is vibrant. The rating also recognizes Vermont's sizeable unfunded pension liabilities, which we consider the state's biggest long-term challenge. OUTLOOK The stable outlook reflects the state's proven ability to continue operating on a balanced basis and maintaining a solid rainy day fund balance regardless of economic cycles. The outlook also anticipates slow progress toward achieving stronger funding of the state's pension liabilities.”
By Moody’s accounting 2015 was an excellent year for Vermont. 2016 is actually better thanks to a good legislative session. Vermont will get plenty of bad play this election cycle. Some will say “the Vermont sky is falling-in.” It is not. Guard against the alarmist and negative rhetoric.
The reality is that Vermont is one of the best places to live in the USA and is also a good place to have a small business. The fact is, there are fewer small business bankruptcies in Vermont than anywhere in the USA and among the most start-ups of new businesses per capita. Those of you who have heard otherwise, take heart: Vermont really is a good state for small businesses and it will get much better when we develop digital coding and everyone has access to broadband and cell service.