To: American Spirit who wrote (8078 ) 12/27/2003 5:05:36 PM From: Hope Praytochange Respond to of 10965 POLITICAL NOTEBOOK: Dean Tax Support Eyed By THE ASSOCIATED PRESS Published: December 27, 2003 Filed at 4:43 p.m. ET MONTPELIER, Vt. (AP) -- 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. Advertisement 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.