"Dean's Tax Incentives Raise Doubts" by Sarah Schweitzer, Boston Globe

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http://www.boston.com/news/local/articles/2003/12/27/audit_raises_doubts_on_deans_tax_incentives?mode=PF

Audit raises doubts on Dean's tax incentives

By Sarah Schweitzer, Globe Staff, 12/27/2003

As governor of Vermont, Howard Dean presided over the creation of a program that authorized $80.1 million in corporate tax credits without verifying that many of the companies had made good on promises to bring new jobs and investments to Vermont, according to a report by the state auditor's office.

The report found that the Vermont Economic Progress Council, the Dean-appointed nine-member body charged with administering the tax-credit program, relied heavily on companies' claims that they were considering bypassing Vermont for their business and needed the credits as incentives. The report also found that the Department of Taxes never checked to make sure that companies followed through on their promises until the Legislature stepped in and required it to do so.

The goal of the program, begun in 1998 and similar to ones put in place by other states, was to lure new firms to Vermont or to ensure that existing ones expanded in Vermont and not in other states. The 2003 state auditor's report found it was likely that some of the 113 expansion or building projects that received credits would have taken place without the enticement.

As such, the report concluded, the credits had probably cost the state more money than they had brought in and had contributed to a 44 percent decline in corporate tax receipts, from $57 million to $32 million, between fiscal years 1999 and 2002. The report also noted that applications for the credits were kept secret.

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