Desperate to lure young people into an aging state, the Vermont Senate in 2018 put forward a plan to pay relocation expenses for remote workers willing to move to the Green Mountain State. Gov. Phil Scott eagerly hopped on board, and in 2018, a $500,000 pilot program was signed into law.
The Legislature has reauthorized funding every year since then (save for 2020), for a total of nearly $5 million. And as part of their draft of the state budget for the next fiscal year, which is due to hit the floor Wednesday, Senate budget-writers have again recommended continuing the program, this time with $1 million.
“For me, it represents one tool in a toolbox that needs to have a lot of tools in it to deal with these still 20,000 open jobs in Vermont,” said Senate Majority Leader Alison Clarkson, D-Windsor.
But times have changed since 2018. Vermont’s rental vacancy rates are some of the lowest in the nation, home prices have skyrocketed, and employers frequently say that they can’t fill open jobs because workers can find nowhere to live. Longtime skeptics of the program have seized on the argument that the program has even less merit in this context.
“It doesn’t make a lot of sense to us that we try to incent people to move to Vermont when we have a housing crisis going on,” said Rep. Michael Marcotte, R-Coventry, who chairs the House Commerce & Economic Development Committee. “We feel that that money is better spent trying to keep Vermonters here.”
The House agreed to fund the program again in 2022 only as part of a larger compromise. And the House-passed version of the state budget this legislative session again omitted funding for the program entirely.
Whether the incentive has any sort of impact has always been a matter of fierce debate. In 2019, Vermont Auditor Doug Hoffer, a longtime critic of Vermont’s business incentives, released a report arguing that the program’s guardrails were insufficient and that there was no evidence that award recipients wouldn’t have moved to Vermont anyway.
An economic impact report commissioned by lawmakers in 2021 argued that the program likely paid for itself via new tax revenues and that every dollar invested generated $93.88 in economic activity in 2018 and $66.26 in 2019.
But many, including Hoffer, doubted the findings, and a subsequent memo by the Legislature’s Joint Fiscal Office offered a blistering retort. After examining the report’s methodology, legislative staffers noted that consultants who produced the report had never asked grantees point-blank whether they would have moved to Vermont without the award and ignored pandemic-era migratory trends.
Despite reservations in some corners of the Statehouse, lawmakers reauthorized funding in 2022, this time for the program’s largest-ever appropriation: $3.1 million. And boosters like Clarkson say the incentive has changed over the years in reaction to criticism. For one, workers now have to apply before they move to Vermont. And funding is now available for remote workers and those filling local jobs.
Scott’s administration had pitched upping funding to $4 million this year. Despite an influx of residents during the pandemic, Vermont Economic Development Commissioner Joan Goldstein said Vermont still faces a severe workforce crunch.
“We could do all the workforce development and training and internships and apprenticeships — but you could take every unemployed person and put them to work and we wouldn’t have enough people to fill the jobs,” she said.
Goldstein also argues the program remains fantastic publicity for the state. While the initial rollout drew the biggest headlines — in such outlets as The New York Times and CNBC — the commissioner said she’s still seeing platforms with a national reach like Zillow plug Vermont in lists of locales that will pay you to relocate.
“That’s valuable marketing that we would never have a budget for,” she said.
But ambivalence about the program was evident on Friday, as the Senate’s budget-writers were putting the final touches on their recommendations for the state’s $8.5 billion spending plan for the fiscal year that starts July 1.
Looking at a spreadsheet of one-time appropriations before the Appropriations Committee, Sen. Andrew Perchlik, D/P-Washington, argued that a new job-training program for Reach Up recipients, which was slated to receive $500,000, was more worthy of the $1.5 million then earmarked for the relocation incentive.
“I would go even further,” replied Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central. “If it were up to me, I would even zero (it) out.”
But after some pushback, Baruth offered, and the committee accepted, a compromise: $1 million for Reach Up families, and $1 million for relocating workers.
In an interview after the committee adjourned, Senate Appropriations chair Jane Kitchel, D-Caledonia, said she’d agreed to continue funding for the program in deference to the Senate’s economic development committee, which recommended continuing the program, and the administration. But she also expressed some skepticism about the incentive’s ongoing utility.
“I think that we’re in a whole new world, and that the challenge for us is going to be managing growth,” she said. “I think Vermont is going to be a very attractive place for people to move to and live.”
And she noted that before the budget becomes law, the House and the Senate still need to negotiate a compromise between their respective priorities.
“I have no idea whether it will survive or not,” Kitchel said.
Correction: An earlier version of this story mischaracterized Economic Development Commissioner Joan Goldstein’s description of the state’s economic challenges.
