New Bill Would Require More Transparency Around Vermont’s Corporate Incentives

Excerpted from VTDigger article.

Since 2007, Vermont has awarded more than $33 million in incentives to companies that are opening or expanding in the state — a program that supporters say brings in far more in tax revenue and economic value than it costs.

But little information is publicly available about the businesses that have received grants through the Vermont Employment Growth Incentive program, including whether they actually lived up to the promises they put in their applications. This year, some lawmakers are hoping to change that.

A new bill, H.10, would create new requirements for the incentive program to report on previously “proprietary” data — including on how much money businesses have gotten each year from the state, how many jobs they’ve created and how much revenue they’ve put in state coffers thanks to corporate incentives.

It would also change the administration of the program, eliminate additional incentives and pause incentives entirely when the state’s unemployment rate is low, like it is right now.

This is not the first time the bill’s co-sponsor, Rep. Emilie Kornheiser, D-Brattleboro, has tried to overhaul the state’s 15-year-old incentive program, which is administered by the 11-member Vermont Economic Progress Council. A similar bill introduced in 2021 died in committee after just two meetings to discuss it. 

But the renewed effort this biennium comes with the weight of Kornheiser’s new status as chair of the House Committee on Ways and Means. The bill’s other co-sponsor, Rep. Michael Marcotte, R-Coventry, is chair of the House Committee on Commerce and Economic Development, where H.10 will begin. 

The bill also comes on the heels of recent high-profile failures and complications for recipients of state incentives. In September, MTX Group canceled its plans to open an office in Waterbury that it advertised would create 250 Vermont jobs, according to Vermont Public.

The group had been “considered” for more than $6 million in incentives that would be distributed annually from 2021 to 2025, according to the incentive program’s most recent annual report. It’s unclear how much the company actually received, because that information is part of what the program considers proprietary information.

Each award is portioned out over a nine-year period based on five years of data on award targets, and companies have to file a claim with the Vermont Department of Taxes for each year in order to prove they have fulfilled their plans, according to Abbie Sherman, executive director of the Vermont Economic Progress Council, which administers the program. 

If a recipient did not meet the requirements for a given year, it can ask for an extension of the award period in order to meet them, Sherman said.

Vermont employers have complained about the difficulty in finding workers in sectors as varied as health care, education, food service and construction. It’s against this backdrop that Kornheiser questioned the need for the state to give money to companies for hiring Vermonters.

“Every business in the state” has been talking about the need for state investments into “training new workers, creating programs to help people find work that works for them, and building out social infrastructure so that folks can work,” she said. “And so why, in the face of that, would we be spending money creating jobs rather than ensuring that folks can get to the jobs that already exist?”

The new bill would limit the incentive program to award grants only if the state unemployment rate is above 5.0%. Besides the early months of the Covid pandemic, the last time that rate exceeded 5% was during the Great Recession, from about 2008 to 2011.