Future of VEGI - March 19, 2024

Chairman Marcotte presented Jessica Hartleben (Executive Director, Vermont Economic Progress Council) to the House Commerce Committee on Tuesday morning. She focused her presentation on the Vermont Employment Growth Incentive (VEGI) and a proposed forgivable loan incentive. She shared that the Council supports S.247 as it sends a message to the business community that “Vermont is encouraging businesses to come… stay… and create better workforce opportunities for Vermonters.”

The current VEGI statute is complex, and H.10 would add more administrative burdens with requirements for the strategic plans and review of all state economic development programs. In speaking with other members of the Council that seems unwelcomed, and the volunteer board will not have the capacity to achieve what is being asked in that bill. She offered that those tasks may be better suited job for the Tax Department, the Joint Fiscal Office or both.

Marcotte noted that what they are looking for is the “expertise of the Council as they understand these programs…” The programs he is referring to are VEGI & Tax Increment Financing (TIF). There is a sentiment that prior awards were “given more for job retention than for job expansion,” he commented. What he really wanted was feedback not a “big task force report” but just to develop an annual feedback relationship similar to the Working Lands Board.

Hartleben shared that she had been asked by the Board to develop relationships with the Regional Development Corporations (RDCs) and develop the knowledge base to relate back to them at the Statehouse. She added they have now three staff (including her) to review the Vermont Economic Progress Council (VEPC) process for approval of these programs. Board approval is only initial and then there are accuracy checkbacks that applicants must comply with.

Getting to the reason she was there, she argued that if the VEGI sunset is not repealed, then businesses will not want to have these projects end up back in such a lengthy claims process for benchmarks. This level on unpredictability was problematic in her opinion. 

A member of the Committee asked what would stop them from completing the process after approval. The answer is the statute is unclear as to what stage of approval would be impacted. The question remains why a business would begin a lengthy multi-step application process without any sort of predictability.

Hartleben pointed out they currently have only one program. She believes the current program IS working successfully. She seemed to suggest that creating a companion program may be preferable to trying to make VEGI do everything. The current policy is to encourage job creation and investment that then results in added revenues.

Marcotte observed that “what we have now is too many jobs and not enough people. And so how do we structure something that can get people into a better job, and they can find the people they are looking for…”. What he seemed to be getting at is that this program is intended for job creation in a high-unemployment environment. What we currently have is a low-unemployment environment.

Hartleben again suggested they go to the Tax Department for more detailed data to assist their understanding.

Marcotte reiterated that they want to be partners and “not to be adversarial at all” in order to help businesses grow. The way it is structured now “doesn’t work for low unemployment,” he believes. If VEPC could “stand something else that would work, we are all in for that,” he stated.

John Russell (Chair, Vermont Economic Progress Council) spoke next, acknowledging comments about the open meetings law. He has reviewed their process in an attorney and shared that he sees one of his main roles as Chair to keep meetings on task (seems to be referring to closed or executive sessions).

Representative Jerome shared that she has attended a VEPC meeting recently and looks forward to at least one summer meeting to continue learning about the VEPC process.

Marcotte thanked both Hartleben and Russell, agreeing that they should continue to build support, confidence, and trust.

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