Posted on 12/27/2003 2:52:19 PM PST by visagoth
The Associated Press
| MONTPELIER, Vt. Dec. 27 — Democratic presidential contender Howard Dean criticizes President Bush for giving unneeded tax breaks, but as Vermont governor, he supported a program critics say did much the same for corporations. The Vermont Economic Progress Council, which Dean signed into law in 1998 to provide tax credits to businesses promising to expand, has approved more than $80 million in such credits, according to a report by the state auditor. Companies had claimed about $25 million of those credits by the end of the 2001 tax year.
Both this year's report by Auditor of Accounts Elizabeth Ready and one by her predecessor, Edward Flanagan, in 2000, said the credits have significantly reduced Vermont's corporate tax receipts and have been given without sufficient scrutiny on two fronts: State law requires a company to state that "but for" the tax credits, the company would not be in a position to expand in the state and add jobs. Both auditors said such a standard is nearly impossible to verify provides an incentive for companies to exaggerate claims their expansion would be jeopardized without the tax break. Ready faulted the state Tax Department's efforts to verify that companies have put the new buildings or equipment in place and have added the promised jobs before allowing them to collect the credits. Both Rivers and Ready are Democrats long perceived in Vermont as being to Dean's left. The council's creation in 1998 came after Dean was criticized for his role, largely out of the public eye, to entice a Canadian manufacturer, Husky Injection Moldings Ltd., to open a plant in northwestern Vermont. "The whole idea was that we get away from the cronyism that he was criticized for with Husky," said former Sen. Cheryl Rivers, D-Windsor, who led a Senate panel that helped create the council. Flanagan's report questioned whether the council, appointed by the governor, was independent of Dean's influence. Former council Chairman David Coates on Saturday recalled two meetings in 1999 with Dean in which the governor sought to clear up confusion about the "but-for" test. Some board members were looking to greater flexibility in applying that test to tax-break applicants, and Flanagan's report said they got it. Flanagan described a May 1999 council session in which a member spoke of Dean's instructions. "The Governor said he broadens the board's authority on the `but for' issue, elaborating by saying that if we were just going by the book we wouldn't need a council," the auditor's report quoted the council member as saying. Coates said Saturday that the council worked hard to get the right answer to the "but-for" question as it related to various companies' applications. "There were several instances where we did not grant the credits" because the applicants "were not in a position where they could support the `but-for'," Coates said. With their former governor now contending for the Democratic presidential nomination, both auditors, Rivers and Ready, defended him Saturday. Ready said the tax credit system was one of numerous programs many of them helping the poor and sick Dean was able to put in place because Vermont's budget was kept in balance during his 11-year tenure. Rivers said the Vermont council "pales when compared with what we're seeing at the national level, where the Republicans are literally looting the country for their business buddies. These are minor issues compared to the no-bid contracts we see in Iraq and other places." Dean has been a frequent critic of Bush's tax cuts, saying they went primarily for the wealthy, while the middle class saw state and local taxes rise to make up for federal budget cuts.
Democratic presidential candidates Wesley Clark and Howard Dean each picked up a congressional endorsement Saturday. Dean won the support of New Jersey Rep. Bob Menendez, who is No. 3 in House Democratic leadership and the highest-ranking Hispanic in Congress. Clark was endorsed by Rep. Dale Kildee, the first member of Michigan's Democratic congressional delegation to announce a favorite in the party's nine-way primary. Dean now has 28 congressional endorsements, while Clark has 16. Members of Congress can vote for any candidate at the convention and are not bound to chose the candidate selected by primary voters in their state.
Associated Press writer Nedra Pickler in Washington contributed to this story.
Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Mr. Gephardt.
It should also be noted that well known Bush basher Paul Krugman was also a highly paid and compensated consultant for Enron serving time on there advisory board while also writing puff piecies on the company.
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