Editor’s note: This opinion piece is by Michael Belyea, the legislative director at the Vermont Chamber of Commerce.
For the first time in recent memory, there’s suddenly bi-partisan agreement on an issue in the halls of state government: Job creation and economic development are good things.
This realization bodes well for Vermont’s businesses and their employees. Legislative leaders seem poised to take action that will make a difference for companies and families struggling in this economic climate. The Vermont Chamber of Commerce is pleased to see lawmakers on both sides of the aisle support the business community and recognize that Vermont businesses are a crucial component to the Green Mountain State’s overall economic success.
A good first step toward this recognition would be to restore the $1 million which the Legislature cut from the Vermont Training Program (VTP) last year. The Vermont Chamber has identified this as one of its core priorities and will continue to support funding the program at its earlier levels of $2.8 million. In addition, the Vermont Chamber has proposed wage eligibility threshold adjustments that permit greater allowance for health care benefits.
While legislators of different parties and persuasions have long disagreed about the role and scope of government involvement in assisting private, for-profit companies, the Vermont Training Program had, until last year, enjoyed fairly broad support in the State House.
Even lawmakers who were opposed to giving incentives directly to companies frequently argued that workforce training programs like VTP invest in people, not corporations. It offers firms funding to set up customized training programs for either classroom or on-the-job training for new hires. Or to cross-train existing employees to improve productivity, or upgrade skills needed in the workplace.
Companies can also train workers in Lean Manufacturing, Value Stream Mapping, and other productivity and process improvement programs that make them more efficient, more profitable, and more competitive.
The Vermont Chamber believes that offering this additional training through the VTP is a critical component to jumpstarting the economy and keeping businesses in Vermont that rely on a workforce with a specialized set of skills. We must continue to make Vermont a desirable place to live and do business. This is one way to achieve that goal.
When a company gets approval through the VTP, it then contracts for the training, and gets half of its costs reimbursed by the state. Since there are wage requirements, the VTP isn’t just providing training to low-wage or low-skill jobs, but is helping the manufacturing, information technology, healthcare, telecommunication, and environmental engineering sectors.
The program has been wildly successful and popular since its inception, and had grown from $800,000 in 2002 to roughly $2.8 million in 2009. Last year it served a total of 4,585 employees with an average weighted wage of $15.52 per hour, at a cost of about $458 per person.
Studies and economic analysis have proven the program pays for itself. Over a four-year period, the state netted an additional $7 million in tax revenues even after the cost of the training was subtracted.
The study also found that for every dollar invested in the program, the state received $2.67 in revenues over and above the invested dollar, so the $1 million cut will result in an estimated revenue loss of approximately $2.67 million for FY10, since the program will run out of money for new contracts in March.
The independent study estimated that in 2008, the $2.8 million investment helped to create 1,312 full and part-time jobs. Lawmakers who are truly serious about job creation can make a difference quickly by approving the restoration of the $1 million cut last year from the Vermont Training Program using the state’s federal stimulus funds.
It’s a smart investment that pays for itself. Why wouldn’t we make it?
Michael Belyea, a resident of Burlington, is the Legislative Director at the Vermont Chamber of Commerce.
