When Gov. Peter Shumlin on Monday announced a new scheme to induce a company in dire circumstances to stay in Vermont, he left little doubt that IBM would be a prime and likely candidate for the plan. He acknowledged as much Wednesday.
“I have read the same information that you have in the press about IBM,” Shumlin responded after a press conference.
A recent Wall Street Journal article predicts the likely sale of the company’s chip-making division will include the firm’s Essex Junction plant.
With at least 4,000 on the facility’s payroll there, IBM remains the state’s largest private employer, despite a series of deep cuts to its ranks over the years and still more pending.
“I’m going to do whatever I have to do,” Shumlin said. “Whatever I can do, to keep IBM — or, if it’s sold, as I’ve read conjectured in the press, whatever entity owns it — growing and thriving in Vermont.”
Whether it’s IBM or another firm in his sights, Shumlin’s proposal would — at the governor’s suggestion and with the approval of a small panel of lawmakers — direct up to $4.5 million to any company on the verge of closing up shop or leaving the state. The money would come from the state’s end of year surplus.
“The unspoken thing here is there’s something very substantial at risk,” Rep. Paul Ralston, D-Middlebury, said Wednesday.
Rep. Janet Ancel, D-Calais, echoed the same concern. Ancel is one of four legislators on the state’s Emergency Board, the panel authorized to make monetary decisions with the governor when the Legislature is not in session.
Shumlin wants the Emergency Board to help him decide whether and when to issue the special funds to a business on the brink of bankruptcy or sale or to a multinational company that closes a division.
“We are looking at a situation potentially where there would certainly be a need for quick action to maintain jobs in the community,” Ancel said. “Four thousand jobs is a lot of jobs. I don’t think anyone wants to take a chance at losing them.”
Technically, however, the money could go to any number of firms under a host of different circumstances. The Vermont Enterprise Incentive Fund also could be used to help lure an established out-of-state company to locate inside Vermont’s borders.
Secretary of Commerce Lawrence Miller says the fund is intended for both speed and flexibility.
“It’s meant to move at the speed of business, regardless of the speed of the Legislature,” Miller said.
He characterized eligibility as contingent on a business model that unifies research and development with commercialization and production — all on-site.
“I’m thinking about (a business) that has an outsized impact not just on a local but a regional economy, with statewide impact,” Miller said.
Miller emphasized that the incentive fund is meant to complement existing economic and business development programs, such as workforce training, assistance with site location and permitting, and support for recruitment and exporting.
Sen. Kevin Mullin, R-Rutland and chair of the Senate Economic Development Committee, says the concept introduces something new to the state’s tool chest, at a time when larger and richer states like New York are digging deep in their coffers to compete for jobs.
“We bash the governor all the time if we lose jobs,” Mullin said Wednesday. “We ought to be able to give him the tools to create or keep jobs.”
Mullin said he wishes Vermont had come up with this strategy sooner, and he wants to hold onto it for longer than any single use.
The Vermont Enterprise Incentive Fund proposal will be attached to pending legislation that likely will go to a conference committee between the House and Senate economic development committees. As of now, it is not being considered as a permanent statute.
“It will be by the time it gets out of my committee,” Mullin said.
This article was corrected at 12:33 p.m. on Thursday, April 17, 2014. Sen. Kevin Mullin is a Republican.