Lawmakers Won't Overhaul State Job Program, Order Study Instead 

Lawmakers have backed away from a major revamp to Vermont’s main job creation program, settling instead for making the program more transparent and creating a task force to figure out what kind of economic incentives really work.

As originally introduced, H.10 proposed pausing the Vermont Employment Growth Incentive program, or VEGI, whenever the state unemployment rate fell below 5 percent.

The state’s unemployment rate was 2.9 percent. Backers of the bill questioned whether Vermont should be paying companies to expand when many can't fill the job openings they already have.
But it soon became apparent to lawmakers that reforming the program was neither as necessary nor as easy as some had assumed, according to Austin Davis, a lobbyist for the Lake Champlain Chamber who followed the proceedings closely.

Since it began in 2007, VEGI has spurred $1.1 billion in capital investments and created 8,812 new jobs that have generated $515 million in payroll, according to the program’s annual report.

But the program has been criticized for not providing detailed information about the individual grants. State Auditor Doug Hoffer said the lack of transparency makes it impossible to be sure that the state isn’t giving away tax dollars for jobs that were going to be created here anyway.

The new version of H.10 will increase the reporting requirements. Companies that receive the grants would need to provide more public detail about the number of jobs and salary ranges created. The measure also includes more robust conflict of interest protections and clarifies when the council overseeing the program can go into executive session.

The bill would create a five-member Task Force on Economic Development Incentives to explore the “purpose and performance of current State-funded economic development incentive programs,” with a report back on alternatives due by January 15, 2024.

On Thursday, the House Committee on Commerce and Economic Development unanimously passed the watered-down version of the bill.

Before approving it, the committee chair, Rep. Mike Marcotte (R-Coventry), said he “strongly cautioned” the Vermont Economic Progress Council, which oversees VEGI, against approving grants designed to preserve existing jobs instead of creating new ones, which he said are the only kind allowed under the law.

Hoffer previously blasted the council for giving a $4.5 million incentive to a Silicon Valley firm, Marvell Technology, that purchased Essex Junction-based Avera Semiconductor for $650 million and promptly laid off 78 workers. The council had argued that the grant was needed to keep Marvell from leaving the state altogether.