Business & Economy

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.

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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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Fred Abbott

“Alienware Aurora high-performance gaming desktop”. https://tinyurl.com/qv9ss7l
Can you imagine how loud the laughter was at the housewarming party when the new “Vermonters” told the crowd about how they swindled Vermont taxpayers out of 2 grand for a gaming computer?

Jay Eshelman

Whether or not applicant’s had the means to make the move to Vermont in the first place is irrelevant. The question is – did the incentive motivate them to move here or were they planning to move anyway? And if there are only 68 applicants, how difficult would it be to ask? A better question – why didn’t the application require an answer to that question in the 1st place? And better still – can we monitor the applicants to see how many of them stay in Vermont?

edward letourneau

The state would be better off spending money — by reducing taxes on the people who grew up here — and are now retired and moving away because they can’t afford to stay here!

Scott Beck

The Remote Worker Program is imperfect. However, this finding is nothing more than a political hit by those that oppose Governor Scott.

Jim Christiansen

Thanks Doug. I wish this was the only example of questionable program spending by our government.
I hope Digger will call the 68 recipients and ask them Jay’s very basic question.
Did the financial incentive motivate them to move or were they planning to move to Vermont anyway and this was gravy?

Andrew Stein

Answers to some of these questions are in the report. It’s available here: https://auditor.vermont.gov/sites/auditor/files/documents/Remote%20Worker%20Grant%20Program%20Report%20-%20Final.pdf

Dave Bellini

The idea is well intended but I think this “program” makes the wrong statement to hard working Vermonters that struggle. All of us, know some Vermonters working their tails off, that we would rather see this money go to. So to the Governor and legislature: if you’re going to give away money next year to workers, we’ve got plenty right here, that could use some one time help. There’s nothing stopping employers from offering moving expenses or signing bonuses to attract new out of state hires.

Patrick Cashman

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Louis Meyers

All of Doug Hoffer’s findings were predictable. This was a bad idea from the start, and this time both the legislature and Phil Scott can share the blame.

patrick hurley

I’m shocked

Karen McIlveen1

Thank you Mr. Hoffer for showing how ridiculous this idea is playing out. Using our revenue for these experiments has become the norm with the Montpelier elected crew.
Exposing the truth of these charades is necessary to stop the rampant spending on foolishness.

John M Farrell

Very bad state government program right out of the starting gate. Do NOT put more taxpayer money into it……ever! Notice all the negative comments…..that tells a story. The legislature should put money into helping the people who live here now and are struggling.

John Stapleton

Speaking of questionable value, here comes Doug Hoffer again.
I’m just surprised he hasn’t commented on this article yet.

Gary Murdock

Would a supporter of this ridiculous program explain to me why I am paying for a couple to leave a metropolitan area they likely couldn’t afford to live in, just so they can go to work for Mac Molding and open a art gallery of all things.

Gary Wheelock

In the words of Capt. Renault in the film ‘Casablanca’ : “I’m shocked…SHOCKED…”

Jude Hazelton

Remote workers investing in high end computers & internet makes perfect sense, they are an absolute necessity for remote workers to do their remote jobs, it is the 21st century (at least for the modern world) after all.

Peter Chick

I’m surprised this took so long. Can we get ten audits every week? At least cut two failed programs for each new one.

Ritva Burton

Stop the spending in Montpelier!! Lower our taxes, smaller government! Somehow this message is not getting to the legislature. Apparently they cannot read the writing on the wall.

willem post

Another hare-brained scheme dreamt up by bureaucrats that was laughable to begin with. I am surprised Scott approved it.

That money would have been better spent by giving electric vehicles, at $40,000 a piece, to the Vermont poor, or providing a major energy retrofit of the decrepit, energy-hog housing of the Vermont poor.

It should be obvious, Vermont would need to:

1) ax many of its onerous rules and regulations
2) needs to reduce all sorts of taxes and fees
3) reduce the state government head count by about 30%
4) reduce its extravagant/poor results education spending
5) reduce its extravagant healthcare spending
6) reduce it income tax rate to 4% max
7) reduce its sales tax rate to 4% max
8) reduce its room and meals tax rate to 4% max
9) eliminate its inheritance/death taxes

to become much more attractive to business investments and for SKILLED/EXPERIENCED people to move to Vermont.

Steve Joyce

Why not focus on the real organic reasons why people move or don’t move to a location?
Address those and you won’t have to provide any incentive for people to move.

What about focusing energy on improving the lives of the people currently in the state who seek additional opportunities? Perhaps some locations are fine the way they are without additional expansion, development, congestion…….. And why would we provide yet another reason for existing Vermonters to have animosity towards flatlanders in addition to the normal level of “hairy eyeball” they get currently? Did anyone really see this program ending up in another way? It was kinda obvious this is where we would be…..

Brant Young

I just learned yesterday that an organization is using this to bring a PA from Texas to Bennington to set up practice. Meanwhile the current PA can’t get a living wage out of the corp.

Chuck Lacy

This program is embarrassing for its lack of imagination. We shouldn’t discount Vermont like we’re selling cars or cereal.

Better hospitality from Vermonters will attract more people than these payments. We all have chances to encourage people to plant themselves, their families, and their work in Vermont. That personal encouragement works better than programs.

We need to show what’s great in Vermont. The grumpiness notwithstanding, people here start with an assumption of goodwill. You can work in a climate of trust. We have great innovation, talent, and investment capital in certain industries. Vermont is for people heading against the grain and want to puzzle out a rural life. It is the right place for lots of people to reach their potential for happiness. We each can sell the parts we believe in. Personally, I’m tired of the complaining.

Jack LaGue

Hoffer’s report is flawed… the report states ‘Although not included in statute or the guidelines, there is an implicit assumption that grantees would not move to Vermont “but for” the grants.’… WADR, it is naive to think that a $5-10k incentive is going to be the primary reason that people move to Vermont.

A more sensible premise would be that the incentive tips the scale towards Vermont for people who already have telecommuting jobs and would like to move to Vermont for life-style reasons. The fact that the report cites the incentive was the 3rd highest factor as to why applicants moved to Vermont suggests that the incentive did its job.

Just the value of the publicity that the state received, along with the state income taxes on the current and future earnings of the 112 grantees and their families that moved to Vermont probably covers the money spent and then some.

Doug, smarten up and stay in your lane… if you have problems with the program design talk to your legislator.

Joy Munro

For anyone paying attention to the data from the Vermont futures project the bottom line is Vermont’s population is disproportionately aging. If we can’t find a way to attract young families to contribute to the tax base, the outlook is not good. If the government feels it’s easier to play people to come here than attract/grow the organic things people are drawn to, well…I’m afraid things are worse than we thought.

Justin Turco

Our legislators and the governor who signed this legislation should be ashamed. This is a no brainer waste of money. We don’t need people. We need jobs. Jobs create a shortage of people which drives up pay and benefits.

Regular Vermonters are disgusted by this move. This kind of stuff needs to stop!

Laura Stone

Money would have been far better spent on solving the issues of your booming neighbors in NH that are not expanding into VT due to over regulation and taxations- and THIS is at Vermont’s Loss.
You could have spend this money directly on NH businesses that would like to open a second one right across the river and possibly would gain you some population because people come with business. They walk hand in hand, you cannot have People when they have no jobs and cannot have businesses!
Read the Fraser Institute that just found NH #1 in the country for Economic Freedom (again) and VT #47 and NH is the only state up here that just gained in population- and many of them were Vermonters!
And here we sit side by side- you could do all this but you clearly don’t want too.
Vermont has voted itself right exactly where it is and you’ll never fix things until you realize that “Your Image” may sound nice in your head, but the numbers show CLEARLY that its not winning for you.

Michelle Richards

What the nearsighted legislators didn’t see was that there are dozens of states and cities that do the same thing and none have anything other than “feel good” stories to back up their reasoning. Any person who moves to another location for $5,000 isn’t very bright (ie. not the people we need) because that is a drop in the bucket compared to all the other calculations one would make in relocating, like cost of living, community, schools for kids, etc. No sane person would move to a place they didn’t want to anyway for a few grand a year (when spreading 5,000 over ten years.

Cathi Brooks

I think it needs to be audited how many AirBnB’s are owned by out of state buyers , ie money that does not go into Vermont earned from rent

Jack LaGue

There have been a couple of posts that mention the need for jobs. I agree. Do you realize that each grant recipient brought a job to Vermont because a prerequisite of the program was that the person be employed and work remotely?

From https://accd.vermont.gov/economic-development/remoteworkergrantprogram

1. New remote worker must be an individual who is a full-time employee as defined by the employer and who receives a W-2 from their employer.
2. New remote worker must become a full-time resident of Vermont on or after January 1, 2019.
3. New remote worker must perform the majority of their employment duties remotely from a home office or co-working space in Vermont.

So this program has brought 112 jobs to Vermont and these new neighbors pay income tax, sales taxes and property taxes (directly or in their rent). What is the matter with that?

 

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