[G]ov. Peter Shumlin’s Cabinet came out swinging Thursday with a report that defends the controversial fund he and lawmakers used to quietly give $1 million to GlobalFoundries last week.
The Vermont Enterprise Fund report by the Agency of Commerce and Community Development announces an additional $185,000 grant for GlobalFoundries to train its employees and describes all the grants given to two other manufacturers over the past few months.
A Shumlin representative sent the report out with an attached news release Thursday morning defending the Enterprise Fund as highly useful. The governor says the economic development initiative is “exactly the type of Vermont-scale business growth tool that we need in our great state.”
This marks the first time the administration has given the Legislature a bundled report on the various incentive programs Vermont has used over the past several months to offer millions of dollars to the three companies. GW Plastics will receive $1.5 million, BHS Composites has been offered up to $985,000, and GlobalFoundries will get nearly $1.2 million.
The administration estimated that $1.7 million of that $3.6 million total came from the Enterprise Fund, and says the fund has directly led to 248 jobs. The administration said the jobs would bring in $3.5 million in state tax revenue over five years and thus the “investments will more than pay for themselves.”
The news comes six days after the Emergency Board voted 3-1 to award $1 million to GlobalFoundries, one of the largest private employers in Vermont, after a process that was largely out of the public eye. The company said it would use the money to make $17 million in equipment upgrades, on top of $55 million in upgrades it announced in November.
Shumlin is now under fire from legislators and members of the public over the award.
The purpose of the Enterprise Fund, according to a statement from the governor’s office in 2014, requires that the money to be spent for the “acquisition of a large Vermont business at risk of relocation outside the state; an existing business in Vermont, which is a division or subsidiary of a multistate or multinational company, at risk of closure or a significantly reduced workforce; or a business considering Vermont for relocation or expansion.”
The 2014 statement says the money should be awarded “in unforeseen or extraordinary circumstances.” Also, to be eligible for money from the fund, “the project must have a substantial statewide or regional economic or employment impact; investigated, been approved for, or have the potential to be approved for other state programs and incentives.”
But Shumlin said in a news conference Tuesday that GlobalFoundries “never said they would leave (Vermont) if they didn’t get the million bucks.” He called GlobalFoundries a good partner for the state and said, “I think a million-dollar investment is just the beginning.”
Without GlobalFoundries, Shumlin said: “Vermont would have budget challenges that would make our current things look like tiddlywinks. So what I say to legislators who say that is, ‘Get your head out of the sand. Look at the reality.’
“The reality is that GlobalFoundries is an extraordinary job creator, he said. “We’re darn lucky to have them, and if we’re too dumb to partner with them, you won’t have this governor joining you.
“I’m perplexed when folks say, ‘I don’t understand why you gave them a million bucks’ … when they allocated $4.5 million (for the fund). Now is it amnesia, or is it politics? I would say don’t play politics with our biggest job creator.”
On social media about an hour after Tuesday’s news conference, Shumlin’s spokesman, Scott Coriell, said one benefit to Vermont is that 100 temporary jobs at the Essex Junction plant will become permanent and pay $14 an hour. He said in an email he thinks the jobs also offer competitive benefits.
@taylordobbs Yes. They are converting 100 temp jobs to full time employment w/ minimum wage of $14/hour
— Scott Coriell (@scottcoriell) January 12, 2016
However, the company’s spokeswoman, Janet Bombardier, said at the Jan. 8 Emergency Board meeting that all temporary GlobalFoundries employees get the same benefits, including medical and dental insurance. The main difference between temporary and permanent employees is the wage level and opportunities for advancement, Bombardier said.
Any jobs paying $14 an hour may not qualify for another state program, the Vermont Employment Growth Incentive, which, as a general rule, requires eligible jobs in Chittenden County to pay a minimum of $15.36 an hour in 2016. The company has not applied for VEGI, according to Patricia Moulton, the secretary of commerce and community development.
Doug Hoffer, the state auditor, said the 100 temporary jobs at GlobalFoundries employed people for three years at a time. “Is that an expansion? Well, if you’re measuring jobs, there are no new jobs,” he said.
Hoffer also pointed to parts of the report that he said implied the awards given to GW Plastics and GlobalFoundries helped keep the companies in the state. GW Plastics was only planning to build an expansion in another state, he said.
Hoffer noted GlobalFoundries took over IBM’s chip-making plant just last year. “These guys just came to town,” he said. “They’re making an investment. They’re not looking elsewhere.”
Here are the total awards described in the Vermont Enterprise Fund report.
- GW Plastics in South Royalton was awarded $500,000 from the Enterprise Fund in October to build an expansion and $54,623 from the Vermont Training Program to train its employees. The company has also been approved for up to $977,365 from the Vermont Employment Growth Incentive, which gives companies what are essentially tax rebates after they create jobs. (Total: $1.5 million)
- GlobalFoundries in Essex Junction was given $1 million from the Enterprise Fund at a meeting Jan. 8. The state plans to give GlobalFoundries an additional $185,000 from the Vermont Training Program to train its employees. (Total: nearly $1.2 million)
- BHS Composites Quebec was given $200,000 from the Enterprise Fund to persuade it to build an expansion in St. Johnsbury. The company was approved for up to $694,711 from VEGI and $90,000 from the Vermont Training Program. (Total: $985,000)
Panel of lawmakers votes to spend $700,000 to aid two employers
G.W. Plastics accepts $500,000 to add 70 jobs in Royalton area
Unnamed Canadian company offered up to $694,711 in state grants
Lawmakers quietly approve $1 million for GlobalFoundries
