WINOOSKI — Gov. Peter Shumlin on Tuesday signed a bill aimed at improving the state’s economic development climate.
The wide-ranging legislation,S.220, consumed a majority of the House and Senate commerce committees’ attention during the 2014 session. Shumlin, flanked by 19 legislators and other officials who worked on the bill, held a news conference for the signing at the renovated mill headquarters of MyWebGrocer in Williston.
He highlighted three key aspects of the bill:
• Creation of a $4.5 million pot of money, known as the Vermont Enterprise Fund, intended to augment existing financial incentives for major employers to remain or relocate in the state.
• Appropriation of $500,000 in state funds, matched by $1 million in federal money, to bolster the Vermont Economic Development Authority’s loan loss reserves for entrepreneurial lending.
• Establishment of the Vermont Strong Scholars Program, which offers partial loan forgiveness for students who earn college degrees in targeted fields — especially science, technology, engineering and math — and who stay in Vermont to work after school.
Technically, the first initiative was moved from S.220 to the state budget bill during the push to adjournment.
Originally pitched as contingent on surplus funds at the end of the fiscal year, the enterprise fund became a line-item appropriation in the budget when it appeared extra money might not be available in July.
International Business Machines Inc., which employs more than 4,000 workers at its chip-making plant in Essex Junction and facility in Williston, is the only company that has been mentioned publicly as a possible recipient of the fund. Shumlin said Tuesday he’s spoken about the incentive with two other companies outside Vermont who have looked into relocating here.
Shumlin says the enterprise fund gives Vermont needed flexibility to compete with other states for businesses.
But the fund has struck a nerve with some Vermonters, who are uncomfortable with the idea of giving away cash infusions of taxpayer dollars to private businesses.
And state officials acknowledge that $4.5 million is a large sum, but they say it pales in comparison to the millions of dollars other states have given away in incentives.
MyWebGrocer co-founder and COO Jerry Tarrant chimed in Tuesday when reporters asked Shumlin questions about the sustainability of the enterprise fund.
“Sustainable? What’s sustainable? You’ve got to take chances to grow your economy. You’ve got to take chances to grow a business,” Tarrant said. “There’s no guarantee that every investment is going to be successful. But if you’re not trying, you’ll never be successful.”
Tarrant said S.220 is helpful for companies in Vermont.
“When I think about a bill like this, I think about the young kids graduating from Champlain College, from UVM, some of those guys that have ideas,” he said. “They don’t need a lot of startup capital, but it’s really hard to get capital … This sort of thing can help.”
The scholars program is part of an effort to entice students to advance their education and stay in Vermont to work. The state’s aging population poses major challenges to Vermont’s economic outlook and even the government’s credit rating, and there’s a dearth of qualified talent for high-tech industries officials are trying to cultivate, employers say.
“This is all about ensuring that we have more stories like MyWebGrocer, and that we’re here as a partner to help grow MyWebGrocer and other companies like it as we move forward,” Shumlin said.
MyWebGrocer, a privately held company, started in 1999 and has grown to become a leading provider nationwide for online and digital services in the grocery industry. MyWebGrocer employs about 200 people in Winooski, and relies on about 100 additional personnel outside Vermont and the U.S. for technical services.
“We all know that in this workforce, if you simply have a high school degree, you’re probably sentencing yourself to a low-wage job for life,” Shumlin said. “That wasn’t true when I was a kid growing up in Vermont. It is today.”
In addition to the student program, the legislation addresses workforce training needs. Lawmakers laid out a plan for overhauling and better coordinating Vermont’s workforce development efforts.
The Vermont Department of Labor has closed its search for a vacant workforce education and training coordinator, a position that will be filled “as soon as possible,” Labor Commissioner Annie Noonan said Tuesday by email.
Workers’ compensation also got attention in S.220 — though differences over proposed changes nearly spiked the deal.
Tom Little, general counsel to the Vermont Student Assistance Corp., who was credited with helping to craft the Vermont Strong program, recalled at the news conference how tenuous the bill’s fate once seemed.
“I remember wandering through the Statehouse at one point late in the session,” Little said. “And one side of the building — I won’t tell you which side of the building, I won’t tell you who it was — (someone) said, ‘Oh that’s dead.’ Walk over to the other side of the building, and (someone) said, ‘No, no, no, we’ve got this thing in control. We’ve got it in hand.’ And lo and behold, they did,” he said.
“People … put some differences aside and looked out for the best interests of Vermont, Vermont jobs and Vermont kids,” Little said.
The Senate passed reforms that would have been more generous to injured workers, while the House wanted to move more slowly with changes after hearing concerns from the business community.
The two sides and other stakeholders came together the final day of the session to reach a compromise that allowed the bill to pass.
Additional areas the bill touches include: telecommunications infrastructure, additional access to capital and credit, and industrial park permitting, among others.
Pat Moulton, the secretary of the Agency of Commerce and Community Development, said Tuesday that the legislation “is a recognition that economic development … does not happen in just one place. It all requires coordination and a lot of different aspects coming together.”
Sen. Kevin Mullin, R-Rutland, noted that housing is also essential to economic development. Several measures to promote affordable housing were contained in another bill, he pointed out.
“We did understand completely this year that housing is essential,” Mullin said. “That if you want to have a great job in Vermont, you have to have a good place to live.”
CORRECTION: MyWebGrocer is located in Winooski, not Williston, as originally reported.