Friday, June 29, 2007

Chittenden Bank:
Is Vermont Losing (Local) Control?

Yesterday's big news was that Vermont's biggest bank was going to be bought by an even bigger bank from out of state. In a $1.9 billion dollar deal, Chittenden Corp is going to be sold to United Financial Inc. of Connecticut.

I don't think the Chittenden Bank sale is the end of the world, but I do think it is worth keeping an eye on.

One obvious reason for concern is the potential loss of white collar jobs here in Vermont; both the Burlington Free Press and the Rutland Herald report that although officials from both banks expect layoffs to have minimal impact, there will be layoffs.

But there is something else to consider...the headquarters of Vermont's largest banking presence will no longer be located here on Vermont soil. Vermont's citizen's will have lost a measure of local influence over an institution that plays a very important roll in the lives of many, many, many of our fellow citizens.

It may not seem important that the top officers of the bank may no longer reside in Vermont neighborhoods, belong to Vermont civic organizations, or send their children to Vermont schools, but there are studies that show that it might.

A trip to Local First Vermont's website yields the results of several studies which illustrate the point. For example, Local First Vermont cites one study by the National Federation of Independent Business that claims that:

Small firms give an average of more than two and a half times the amount per employee than do medium or large firms (small firms give $789 per employee, medium-sized firms $172, and large firms $334)

It is of course more than community involvement or charitible giving...in the end, it comes down to the basic strength of our Vermont Economy....

The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Midcoast Maine - September 2003
By Institute for Local Self-Reliance
This study tracked the revenue and expenditures of eight locally owned businesses in Midcoast Maine, as compared to big box stores.Key findings:

* Locally owned businesses spent 44.6 percent of their revenue within the surrounding two counties, and another 8.7 percent elsewhere in Maine, largely on wages and benefits paid to local employees, goods and services purchased from other local businesses, profits that accrued to local owners, and taxes paid to local and state government.

* Big box retailers return an estimated 14.1 percent of their revenue to the local economy, mostly as payroll. The rest leaves the state, flowing to out-of-state suppliers and back to corporate headquarters.

so I'll leave you with one more thought and then urge you to to visit Local First Vermont's website.

It pays to think about who you are doing business with...


Anonymous said...

Hey dude -

Did you happen to notice that the Local First Vermont was developed by a NON-VERMONT firm?!

Check out the credits at the bottom of their site.

With all the talent we have in this state (not to mention an industry that we would like to encourage), how could these guys take their business outside Vermont?

Alex said...

No, I didn't... I went to the site credit's page and saw a bunch of "open source" stuff...and that it was developed by a San Fransico Web Firm...but I couldn't tell if the firm developed the open source programing OR the Local First Vermont site... (I didn't have a lot of time to look.)

I can't agree more that, if people from out of State were paid to do what plenty of people IN state can do and do really well...then that's REALLY bad news!

Liz said...

Thanks for the comment - Local First Vermont is one year old and our next big priority is finding funding to move our web presence instate!

We were able to get the site templates and hosting as part of our membership in BALLE, www.living economies.org, with a group who develops tools specific to groups like ours. However, we'd rather work with local folks.

Your comments about local hosting and webwork are definitely heard and we are figuring out how to make that happen. Our contract will be up in a few months, so if anyone wants to talk about opportunities, contact me!

Liz Schlegel

Alex said...

Thanks a lot for clearing this up, I understand that, when you are trying to build up a network, and change the world from scratch, you take your resources where you find them.

Thanks for responding, and thanks for the work you folks are doing. I think it's very important.