Q&A: Bernie Rome

Vermont Business Magazine, Aug 01, 1998

Bernard Rome was born and raised in Vermont, graduating from the University of Vermont in 1956. He went to New York City to begin making his fortune, launching one of the first computer processing centers in the country. There he also started several other businesses, and served prominent Democratic and Republican office holders in financial and other capacities. He also served as Chairman and President of the New York Off-Track Betting Corporation.

Rome expanded his computer business by opening a production facility in Rutland in 1967, and opened a ski shop in Killington that his parents operated until 1986. He returned to Vermont in 1991, devoting full time to expanding his ski business in Killington.

The enactment of Act 60 reignited Rome's interest in politics, culminating in his bid for the Republican nomination for Governor of Vermont. He believes the state would benefit from his management experience, and he applies a business-oriented analysis to the state's problems. His vision for the state includes vigorous participation in the information revolution through encouragement of profitable, high-paying computer-related businesses.

Richard Andrews interviewed Rome for Vermont Business Magazine in Rome's office in Killington early in July.

VBM: Why do you want to be Governor?

ROME: Because I believe that the assets of the state are being ill used, and I can do a better job managing those assets.

VBM: What do you mean by the assets?

ROME: The resources--people, land, tax revenues, growth, development.

VBM: What distinguishes you from your primary opponent?

ROME: Forty years--of management experience.

VBM: Why do you dislike Act 60?

ROME: Act 60 is a terrible law. It destroys enthusiasm for economic development on a local level. It will not work. It does not work. It cannot work. It pits neighbor against neighbor. It tells one group of towns, go ahead and spend whatever you want on education, because someone else will be paying for it, while telling another group of towns, the only way you can avoid paying for the first group of towns is by reducing the cost of education for your children. It has contradictory motivations.

VBM: What would you do to meet the requirements of the Brigham decision?

ROME: Oh, there are a number of things. You could just have a broad-based tax. You could have given the money directly to the Foundation Plan. This bill is not about education. It's about property tax reform. And it doesn't comply with the Brigham decision, by the way.

VBM: Why not?

ROME: Well, it isn't equal educational opportunity. If we raise $1,000 per child in Sherburne for our kids, we have to raise $4,000 more to go into the shark pool. That $4,000 then gets redistributed throughout the state to 100,000 students. I believe that's 4 cents a student. So every kid in the state gets 4 cents, and the kid in Sherburne gets $1,000. That's no equal educational opportunity.

VBM: Do you support the Educational Revenue Sharing proposal?

ROME: It's an intelligent. sophisticated plan. It's thoughtful. It's scientific. It's much better than Act 60. But it's a distribution plan, and I fear for it because it's complicated. But, yes, beyond those considerations, I certainly support it.

VBM: One of the proposals for raising education revenue is the gross receipts tax. Do you support it, and if not, what would you prefer?

ROME: I like the gross receipts tax. It makes a lot of sense. It's one of the three or four alternatives I would have to Act 60.

VBM: What are the others?

ROME: Well, you don't have to do anything. You could have the Foundation Plan; just fund it. You could have the Educational Revenue Sharing plan, in and by itself. There was a Republican initiative early on that made some sense, that brought towns within 10 percent of a norm. You could just have more gas taxes. You could separate the education effort from the property tax effort. which is what makes Act 60 so cumbersome and so much like a statewide poker game in terms of economic development.

VBM: The principal business objection I've heard to the gross receipts tax is that it favors a large, fully integrated operation which would pay the tax once over several smaller ones.

ROME: Yeah. That's pyramiding. Or cascading. That's a problem you just accommodate.

VBM: How?

ROME: How do you accommodate a sales tax? By saying, if it's not for resale you don't have a tax. I mean, look at all the exemptions. Look at the 106 pages of Act 60, and 75 pages of technical corrections. Laws can be anything. You can have all the exemptions you want if you find an abuse.

A broad-based gross receipts tax, by the way, eliminates the property tax and the sales tax. Two very regressive taxes replaced by a broad-based tax.

VBM: Specifically how would you eliminate the bias of the gross receipts tax in favor of vertically integrated businesses?

ROME: I don't know that there is a problem. More precisely, the problems are de minimus. I was a manufacturer, so I know he cost of manufacturing a product is only 10 percent of the retail price. The cost of the raw materials that go into that product may only be 30 percent of the manufacturing cost. So you're talking about three tenths of 1 percent. If your gross receipts tax is 2 percent, you're not talking about 2 percent at every production level. You're not talking about 2 percent plus 2 percent plus 2 percent plus 2 percent. You're talking about two-hundredths of 1 percent plus two-tenths of 1 percent plus 2 percent.