The Speaker of the House presented his economic development working group’s findings to the public on Tuesday afternoon and asked lawmakers to get to work.
Rep. Shap Smith, D-Morrisville, joined the House Committee on Commerce and Economic Development with Paul Ralston.
Smith asked Ralston to chair the 11-member working group to sift through economic development proposals he sought from the general public in January.
Ralston is the owner of Vermont Coffee Co. and co-founder of the pro-economy political action committee Vision to Action Vermont with Rep. Heidi Scheuermann, R-Stowe, who sits on House Commerce.
Smith said spurring economic development in Vermont would require changing the narrative around how to market the economy, implementing tax credits, and making direct investments. “But there are others that don’t cost money, and we may be able to move forward with them this year,” Smith said.
One of those suggestions was an up to $5,000 tax credit for employees who relocate to Vermont, and one was to change licensed lender laws to make it easier for venture capitalists to invest in new companies.
Smith said in an interview the employee relocation incentive was one of the most intriguing, but the idea would need to be fleshed out, and the Legislature would need to find the money to pursue it.
“I, as a Vermonter and somebody who came back to live here, really believe that Vermont is an incredible place, and an incredible place to do business, and I think we can really make it a better place,” Smith said.
Ralston sifted the proposals from the public into six goals for the Legislature to consider this year, 10 for completion by the end of the biennium, and 10 more for long-term review and study.
“We probably disproportionately landed on tax credits because we’re worried about [whether] anyone will appropriate any money in these programs,” Ralston said.
Indeed, five of the six short-term goals were tax policy changes: an angel investment tax credit for investors in risky ventures; clarification of the “cloud computing” tax to help people understand whether sales tax applies to software bought and used through an online cloud; an employee relocation tax credit; restoring the research and development tax credit; and changing VEGI eligibility.
The angel investment tax credit and changes to VEGI eligibility are written into S.138, the economic development bill sponsored by the Senate Economic Development, Housing, and General Affairs Committee. The bill was referred on Tuesday to Senate Finance. Sen. Kevin Mullin, R-Rutland, will pitch the bill to House Commerce on Wednesday morning.
Ralston said promoting Vermont as a good place to do business and for young people to live is the least expensive part of the group’s list of proposals.
“It’s time for our government to stop talking about huge programs that cost the government a lot of money and don’t work,” Ralston said. “It’s time for our government to stop talking about how old people are getting into Vermont and how young people don’t want to be here.”
The group recommended reforming the Earned Income Tax Credit and social welfare programs “to mitigate financial penalties from work.” The group also wants to make changes to “cloud computing” tax policies and use public money to help the private sector build telecommunications infrastructure.
Other proposals that made the list include: Vermont embassies in Boston, Montreal, and New York; improved public transportation; and the elimination of the corporate income tax.