Region mixes old and new to grow economy

Vermont Business Magazine, Aug 01, 2004 by Barna, Ed

Economic slumps bring problems, but so do recoveries. Now that Addison County's economy looks reasonably healthy, the question of how to develop further has accounted for many of the past year's headlines.

Dairy farming, the most visible sector of the county's economy if not its largest by dollar value, has seen very good milk prices after two years that threatened to cause a mass exodus. Tourism has so far not been choked off by the war-related increase in gasoline prices, and may have benefitted some from terrorism-related fears of going abroad or anywhere requiring air travel.

When a natural foods co-op is doubling in size, and a formerly moribund shopping center is not only filling but also attracting bank branch construction, it's hard to think of retailing being in a tailspin. However, this may be the most troubled sector for 2004, as central core areas and small businesses generally confront the increasing presence of 'big box' and Internet competition.

Manufacturing plants have mostly continued on apace, some seeing a pickup in business as the national economy expands. Oddly enough, one of the Green Mountain State's most traditional types of production has been one of the most challenging lately because of fluctuations from foreign competition: forest products.

On the individual level, people like what they see in the country well enough for the real estate market to be brisk. And for the first time since the real-estate-led recession of the early 1990s, large-scale housing developments are starting to come before zoning boards, some of them aimed at filling a growing need for starter and affordable housing.

Helping to keep things on an even keel, three of the county's largest employers have been doing well. Middlebury College's construction boom and studentfaculty-staff increases have helped all kinds of businesses, either directly or indirectly; the Porter Medical Center is seeking approval for a renovation-addition project; and Goodrich in Vergennes has found a growing demand for its aircraft monitoring systems thanks to military procurement.

Left unanswered (perhaps unanswerable) is the question whether all this is contributing to what seems on the national level to be a growing divide between the country's economic haves and have-nots. Are the county's communities changing, or is one set of communities being replaced by another, with the original community hard-pressed to stay in place? When people in the MidAtlantic States can sell one house for $500,000 or more and buy twice as much house or more in Vermont, how much pressure can a town take? If there is a trend away from manufacturing toward lower-paying service jobs, where can those workers afford to live?

One thing seems clear: under the radar, visible mainly to the people who staff antipoverty efforts, quite a few people are seriously hurting. On the other hand, those doing charitable work say Addison County has been consistently generous in offering a helping hand.

Going Down While Going Up

Going by what's happened to unemployment rates, things took good. For 2003 as a whole, using Department of Employment & Training numbers, having 850 people unemployed in a Middlebury Labor Market work force of 21,400 meant a 3.9 percent rate - not as good as the Burlington Labor Market's 3.7 percent, but better than Rutland's 5.6 percent and the state average of 4.6 percent. Going by July numbers, the percentage was dropping, from 3.7 percent in 2003 to 2.5 percent in 2004.

But there were 22,500 workers in the July 2003 tally, and only 20,200 a year later, more than a 9 percent drop.. Whether this meant some of the unemployed were giving up hope of finding work, people were leaving the country, or there had been some change or anomaly in statistical methodology was unclear.

Looking at sales and use tax figures for December, a major retailing month, in 2002 Addison County had seen a falloff from about $10.1 million to $9.0 in retail sales taxes (rounded figures) and from $44.7 million to $37.5 million in gross sales and use taxes. By December of 2003, this had rebounded to $9.8 million in retail sales taxes and $40.7 million in overall sales and use taxes.

As will be seen, the demise of the Ames department store chain, including the one in Middlebury's Centre Plaza, may have influenced this.

Looking at rooms and meals tax receipts in October, a prime tourism month, 2002 saw meals decline slightly, from $2,086,709 to $2,053,493, while room taxes rose slightly, from $929,001 to $941,691. For October of 2003, the meals went up to $2,186,791 while rooms declined to $921,265.

Though Middlebury does not have a reputation as a tourist town, its meals tax receipts were greater than those for both Killington and Woodstock in October of 2003.

But it's in the property transfer tax receipts that the past year's acceleration of economic activity shows most clearly.

Comparing totals for 2002 and 2003, the sum went from $955,054 to $1,179,879. Reflecting the strong housing market, the total of selling prices for residential properties under six acres went from $45.6 million to $50.8 million, with the average rising from $143,442 to 157,087 and the median from $129,750 to $144,000. There were five commercial apartment transactions, where there had been none in 2002.