Business & Economy

Legislative Wrap: Economic development push lasts from first to last day of session

Lawmakers pushed for economic development measures from day one of the session, but they grappled over the details right until they adjourned.

Phil Scott economy V2AVT
Lt. Gov. Phil Scott giving the economy “pitch” at the start of the 2015 legislative session. File photo/VTDigger.

Lt. Gov. Phil Scott declared economic development as “priority one, day one,” before going on a listening tour of Vermont to hear grassroots ideas that he shared with the Legislature and the public.

House Speaker Shap Smith, D-Morristown, brought in an 11-person business-friendly panel that ended up making different recommendations than many of the eccentric ones he received from the public.

The Shumlin administration made multiple attempts to expand the Vermont Employment Growth Incentive for manufacturing companies and unsuccessfully wrestled against using the IBM fund to pay for the bill.

Headed to Gov. Peter Shumlin’s desk is a $425,000 economic development bill that includes several unfunded studies for his administration to tackle by January. There are also several provisions to get people with disabilities and untrained workers to hold down jobs.

Negotiations over the 176-page bill almost fell apart in the last days of the session, but its sister consumer protection bill had already coasted through.

Law Would Tap Enterprise Fund for $425,000

The Vermont Enterprise Fund, started with a $4.5 million appropriation largely to help entice IBM to stay in the state if it ever threatened to leave, will extend to June 30, 2017, instead of dissolving next year.

The fund has so far only been used to fill in the budget deficit, leaving $2.5 million for the governor to use with Emergency Board approval. This year’s economic development bill takes $425,000 of the remaining funds.

A downpayment assistance program for first-time homebuyers will get $125,000 to be used for tax credits on an investor fund, which is expected to generate $550,000 in equity. That will fund the program for 110 families, who would each receive $5,000 toward the downpayment on a home and pay the money back upon selling their house, creating a revolving loan fund.

The Agency of Commerce and Community Development will get $100,000 to market Vermont for business expansion from Quebec-based companies, and $200,000 will go to the Department of Tourism and Marketing to develop a plan and report by Jan. 15 on how to market Vermont as a good place to do business.

VEGI Gets Loosened Rules, But Barely

Even after the Shumlin administration pushed its changes to the Vermont Employment Growth Incentive through the Senate, the House severely watered down its plans.

Liberal lawmakers pushed back over lowering the wage threshold for VEGI applicants and derailed the plans even before the Legislature’s economist reported twice that the administration’s model would cause the state a net fiscal loss.

The wage minimum to get VEGI’s cash incentives — paid out much like a tax rebate once companies create jobs they promise when they apply — will stay at 160 percent of minimum wage in areas like Chittenden County and White River Junction.

In places where unemployment is higher than the state average, the threshold will be 140 percent of minimum wage or $13 per hour, whichever is higher. The jobs in all labor market areas must include at least three listed benefits, such as health insurance, dental assistance, child care, retirement benefits, or paid time off.

Under extraordinary circumstances, businesses could be awarded more than $1 million per year or $10 million over five years, but the Senate pushed to only allow the cap to be raised with approval from the Emergency Board.

The “value-added” VEGI incentive, which would have given more money to manufacturing companies, did not make it through the Legislature. An “enhanced” incentive for workforce training stayed in the bill.

Seven Studies Ordered, Some For Ambitious Ideas

The bill creates an Employee Relocation Study Committee that would study and report back by Jan. 15 how to implement a tax credit for workers who might move to Vermont to fill jobs in high-need industries.

House Speaker Shap Smith, D-Morristown, had supported giving workers up to a $5,000 tax credit as a recruitment tool if they relocated to Vermont, but he said the idea needed more thought before becoming law.

The secretary of state, the commissioner of Financial Regulation, and the attorney general are ordered to report back by Jan. 15 about the feasibility of the state implementing blockchain as an official technology for state records.

Blockchain allows parties to sign sensitive documents securely from different parts of the world. It creates a shared public ledger, runs via a highly mathematical algorithm, and is the same technology that backs up the digital currency Bitcoin.

The Department of Financial Regulation and Agency of Commerce and Community Development would study how peer-to-peer lending models would help entrepreneurs raise money better in Vermont. The report is due Dec. 15.

More related stories

In case you missed it: Video and story from economy ‘pitch

Shumlin opposes House plan to take $725,000 from IBM fund

Speaker’s economy panel produces aggressive goals

House gives preliminary approval to expanded economic development bill

A “Vermont Liquor Control System Modernization Study Committee” would study the governance of the Department of Liquor Control and how it could “be made more efficient, effective, and profitable for the Vermont economy.” A report on the potential privatization of liquor control is due Dec. 15.

The commissioner of Liquor Control would report by Jan. 15, 2018, on how the new permitting program for fortified wines is going. The study would need to recommend the appropriate number of fortified wine permits.

A “Southern Vermont Economic Development Zone Study Committee” would study the workforce decline in the past 15 years and report to the Agency of Commerce and Community Development and relevant legislative committees by Dec. 1.

The Agency of Education, Department of Labor, Agency of Commerce and Community Development, and the Vermont State Colleges would perform a study by Jan. 15 that has to do with career technical education.

Rent-to-Own Becomes Omnibus Consumer Protection Bill

The House Commerce Committee puts together a consumer protection bill every year, but rent-to-own companies took center stage when Shumlin and Attorney General Bill Sorrell called on the Legislature in February to regulate their practices.

After clearing the Senate, the bill that outed rent-to-own companies for repossessing used couches from poor Vermonters turned into a multifaceted measure to give all Vermonters more transparency on hidden fees.

Shumlin is expected to sign S.73, pending his standard disclaimer that he will look at the bill’s details. It puts a yearlong moratorium on settlement loan companies and has disclosure requirements for about a half-dozen industries.

Lawmakers also tacked on a popular measure to create a financial literacy commission to help Vermonters understand their financial well-being. Advocates say parents are as uncomfortable talking to their kids about money as they are talking to their kids about sex.

Correction: The mechanism of the first-time homebuyer fund and the number of homebuyers it will help was incorrect in the original version of this story. It was corrected at 11 a.m. on May 25, 2015.

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