Auditor’s office: Remote worker program of ‘questionable value’

Beth Dow, who moved from Denver in January with her husband, is shown at the couple’s Bennington home. Her husband works at Mack Molding, and the two have opened a store and art gallery in downtown Bennington. They received $5,000 to cover some of their moving expenses, and plan to apply after Jan. 1 for another $5,000. Photo by Anne Wallace Allen/VTDigger

Vermont’s remote worker program has paid for an airline ticket, a homeowner’s underground broadband conduit and landscaping, three high-def computer monitors and several security deposits since it went into effect last year, a report from the state auditor’s office shows.

The program, which was approved by lawmakers in 2018 as a way to encourage more people to move to Vermont, has spent $400,000 to reimburse 112 grantees for their moving and related expenses to work remotely from Vermont. In all, that’s boosted the state’s population by 290, Joan Goldstein, the state’s commissioner of economic development, said on Monday. 

Goldstein received the report from State Auditor Doug Hoffer about a week before its formal release Tuesday morning.

Most of the grant money — about 78% — was used for moving expenses, according to the report. Another 7% went to security deposits, 10% went to hardware, 3% went to broadband and 2% went to membership in coworking spaces.

“We found numerous questionable choices that resulted, in part, from efforts by the Agency to adhere to the Legislature’s intent (i.e., to keep it simple and get the money out the door,” Hoffer wrote.  

Hoffer studied program activity based on 68 applications that had been approved by mid-August. He said there’s no way to determine grantees moved to Vermont as a result of the moving expense reimbursements — and not because they were planning the move anyway. Also, with applicants required to show proof of Vermont residence when applying for their moving expenses to be reimbursed, “that means they had the will and means to relocate without the program,” the auditor said.

The prospect of reimbursements was “at best, a minor incentive for grantees to move to Vermont,” Hoffer said he found. “At worst, the grants were gifts to those who would have moved here regardless of financial incentives.”

The report was termed a “non-audit inquiry,” which has a smaller scope of work than the traditional audits conducted by Hoffer’s office.

Taxpayers subsidized ‘a higher quality of life’

Hoffer closely examined the reimbursements themselves and found that 53% of all reimbursements for software and hardware, about $13,500, went to just three grantees who purchased high-definition monitors (one curved), an office printer, an iPad Pro, a 27-inch iMac desktop computer, and an Alienware Aurora high-performance gaming desktop.

Half of all the broadband reimbursement went to one grantee for installation and post-project landscaping for a 100-yard underground conduit for broadband cable.

“This was a long-term investment in the property that will be recouped by the grantee at sale and there is no indication that the state will be reimbursed down the road,” the report said.

The program paid for storage – six months of it, in one case, in 2018 before the program started – and home internet, including one person’s prepaid year of high-speed internet and router rental. Although plane tickets aren’t eligible for reimbursement, the program paid for one grantee’s flight so a child could sit on the person’s lap, and not have to travel a long distance in a car seat, the report said.

The Agency of Commerce and Community Development, which administers the program, didn’t ask grantees if their expenses were job related; didn’t find out if the expenses could be reimbursed by their employer; and didn’t verify how much it cost grantees to do their jobs, Hoffer’s report said.

“By failing to control for the non-employment value of eligible expenses, the Agency appears to have subsidized a higher quality of life outside of work for grantees and their households,” he said.  

Goldstein said Nov. 11 that it’s not in the agency’s scope to seek reimbursement later for security deposits and the underground broadband conduit.

“It’s a grant, so we have no expectation of getting money back,” said Goldstein. “We have no way of knowing whether any individual would get back a security deposit, and this was meant to help defray the upfront expense of moving to Vermont.”

A high-profile program

Vermont’s remote worker program was conceived by lawmakers and passed in 2018 with a $500,000 appropriation. The program, which started accepting applications in January, offers reimbursement of up to $5,000 a year for two years for moving expenses and some of the costs of setting up in a home office or coworking space in Vermont.

After Gov. Phil Scott signed the remote worker bill into law in May, news of the $10,000 incentive traveled widely on social media, bringing a flurry of media attention from around the world.

With an unemployment rate that hovers just above 2% and a declining population, Vermont needs workers for its own employers. Many Vermonters complained that the state shouldn’t reimbursing people from elsewhere, much less to work for companies outside of the state, and last year lawmakers approved a new program – due to start in January – that reimburses people up to $7,500 for moving to Vermont to take any job in the state.

The population problem is particularly acute in the Northeast Kingdom and the four southern Vermont counties of Bennington, Rutland, Windham and Windsor. Chittenden County, by contrast, is growing faster than any other county.

Yet nearly half of the grantees — 47% — have moved to Chittenden County, said Hoffer’s report, released Tuesday morning. None have yet moved to Essex, Grand Isle, or Orleans counties, he said.

“I like the fact that Doug Hoffer is doing an audit on it,” said Chet Greenwood, the chairman of the Orleans County Republican Party. “It doesn’t sound like it’s working very well. The idea was to get employees around the state, not just Chittenden County.”

Poor broadband coverage is probably the reason why people haven’t chosen to live in the Northeast Kingdom, said David Snedeker, executive director of the Northeastern Vermont Development Association. A map in Hoffer’s report shows that large areas of the Northeast Kingdom, Addison County and southernmost Vermont have no buildings with broadband access.

Snedeker said he supports the state’s attempt to attract workers by reimbursing their moving expenses.

“I know there are people who think we should be focusing on people who are already here,” he said. But we need people to come to Vermont, and it’s one way to do it.”

Evan Carlson, the director of the Do North coworking space in Lyndon, said he gained a member who moved from Maine because of the remote worker program. He’s not surprised most of the newcomers chose Chittenden County. In many cases, he said, remote workers have spouses or partners who need to find jobs that aren’t remote.

“Being able to go to another, maybe less populated, urban-ish area, like Burlington, seems like a good stepping stone for people,” Carlson said.

Once the original $500,000 has been handed out to grantees, there’s no provision for the remote worker program to continue. Asked why he studied a program that isn’t slated to continue, Hoffer said he has reason to believe that Commerce and Community Development will ask lawmakers to continue the program with new funding, and to expand eligibility.

“We won’t know for sure until the session starts,” he said in an email. 

Correction: A member of the Do North coworking space in Lyndon moved from Maine, not Minnesota, because of the remote worker program.

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Anne Wallace Allen

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