News that Vermont’s unemployment rate dropped to 3.7 percent in February capped an uneven week on the economic front.
The announcement of the decrease from 4 percent in January continues a five-month downward trend, but the news came the same week state leaders learned 80 jobs would be lost in Lyndonville.
Gov. Peter Shumlin cautiously celebrated the news Friday shortly after the jobless numbers were released by the Vermont Department of Labor.
Pending layoffs were confirmed Tuesday at Kennametal in Lyndonville, a precision manufacturing plant that will close by the end of June. That news came one month after Plasan announced it would move from Bennington to Michigan in May. Still more layoffs are pending at IBM in Essex Junction.
“I am pleased that Vermont’s unemployment rate has dropped to 3.7 percent, the lowest it’s been since June 2006, and now the 4th lowest unemployment rate in the nation,” Shumlin said. He credited the state for being on the right track, but emphasized that there’s “more work to do.”
His gathering aligned with passage of the Senate’s signature economic development bill, S.220.* The legislation was conceived as comprehensive stimulant for the state’s economy. It touched housing, education, manufacturing, tourism, startups and more. And it came with a price tag.
Sen. Kevin Mullin, R-Rutland, said his proposal sought less in appropriations than a parallel bill that’s still being drafted in the House Committee on Commerce and Economic Development.
The version of S.220 that passed Thursday would cost a lot less. A 35 percent tax credit for angel investors was stripped by the Senate Finance Committee, as were incentives for industrial parks.
“And at the end of the day, by the time it was all said and done, all that (costs) in the Senate bill is $75,000 for the domestic export program,” Mullin said.
That initiative, as with many other aspects of S.220, are also found in H.736, sponsored by a bi-partisan pair of House Commerce committee members, Reps. Heidi Scheuermann, R-Stowe, and Paul Ralston, D-Middlebury.
Both bills seek to build off a successful, federally funded international export assistance program by helping Vermont companies sell their wares to other states. Both include an angel investor tax credit. The bills would also attempt to make it easier for any individual starting a business to navigate the complex web of state agencies, registrations and regulations.
The legislative initiatives also conjure up ways to compete with deep-pocketed economic development strategies in neighboring such as New York, which promises 10 years of no taxes to lure businesses to their borders.
A full-page ad to that effect, clipped from the pages of the New York Times, hangs on a House Commerce Committee bulletin board as a constant reminder of what small-town Vermont lawmakers are up against. They know they can’t compete dollar-for-dollar with New York. But want some funding to boost their odds.
Scheuermann is not ready to give up on funding for the initiatives she and Ralston have prioritized. They are particularly committed to a $1 million loan-loss reserve to back an entrepreneurial lending program.
Without that financial backing, Ralston said in January, what’s left in their bill boils down to a “doughnut fund.” He was referring to a suggested $10,000 appropriation to pay for networking events among high-tech entrepreneurs.
“Bring them together and give them doughnuts,” Ralston explained to his committee, “and they will make deals together.”
In the latest available version of H.736, the so-called doughnut fund is eliminated.
Scheuermann, who announced last week that she might challenge Shumlin in this year’s gubernatorial race, said Friday that leadership needs to do more to encourage jobs and innovation to create more and better job opportunities for Vermonters.
“If we had the gov and the administration supporting funding for economic development provisions, I think it would certainly help our bill as we try to move it forward,” Scheuermann said.
Shumlin said Thursday that he agrees economic development packages should come with funding.
“But as you know, we want to devote the resources we need … to make sure everybody has a piece of the economic recovery,” Shumlin said. “Not just some people.”
The competing priorities of economic development investments and social service costs were starkly portrayed Thursday evening in the Statehouse.
At one point in the course of a debate over Fiscal Year 2015’s budget and miscellaneous tax bills, the food assistance program 3SquaresVT was pitted squarely against business tax credits.
Two amendments to spend $10 million more on 3SquaresVT by raising taxes on the state’s two highest income tiers was defeated by a roll call vote of 115-28.
“We have to pick and choose,” Rep. Martha Heath, D-Westford, said after the vote, by way of explanation for leadership’s position on the matter. Housing, education, assistance programs, economic development and more all vie for a limited pool of funds, she said during the debate.
Despite his efforts to fund development being pared down, Mullin said S.220 still furthers his committee’s economic development goals in important ways.
“If they gave me $5 million,” Mullin said,” I would be more bold.”
* The amended version of the Senate-passed S.220 was not available as of publication time.
