Gov. Shumlin, lawmakers announce support for new economic development tools
MONTPELIER – April 14, 2014 -- Gov. Peter Shumlin and legislative leaders today unveiled two proposals designed to attract, grow and retain high-tech companies that provide well-paying, skilled jobs for Vermonters.
The proposals, if approved in the economic development bills moving through the State House, would create flexibility for the state to respond to exigent circumstances with significant effect on jobs, and would support additional VEDA lending for tech start-ups with a bright future in Vermont.
The first proposal, the Vermont Enterprise Incentive Fund, would allow the Governor to offer supplemental incentives to businesses, in a total amount not to exceed $4.5 million, in “unforeseen or extraordinary circumstances” that would affect the state’s ability to attract or retain companies with substantial statewide or regional employment impact. The proposal is designed to provide a measure of flexibility in the state’s response to competition and other outside factors that sometimes arise suddenly and require action greater than the state’s current economic development incentive programs allow. Legislative approval of any Governor-recommended incentives would be required through the Emergency Board.
The second proposal would support a provision of H. 763 by adding $500,000 in state general funds to the $1 million in federal funds available to VEDA’s Vermont Entrepreneurial Lending Program. The program will create a loan loss reserve to reduce the risk of lending to start up tech and other companies in Vermont promoting high value jobs. The program will help foster the next generation of successful companies home grown right here in Vermont.
“I am proud that Vermont has the 4th lowest unemployment rate in the nation and a growing workforce, but we’ve got to keep pushing hard to bring good jobs to Vermont and protect and expand the great companies we have here now,” Gov. Shumlin said.
“Vermont has grown into a technology leader, consistently building an industry that has brought booming businesses, millions of dollars of development and other capital investment, and a cascading effect of jobs within our communities,” Gov. Shumlin said. He said these types of jobs require innovative thinking and skilled research and development. One engineering or development job can create 20 more jobs in production and manufacturing, the Governor added.
To support that industry and ensure Vermont remains competitive in recruiting and retaining these in-demand companies, the Governor, House Speaker Shap Smith and Senate President Pro Tem John Campbell said they will support the Administration’s proposals as amendments to the economic development bills currently under consideration at the State House.
Gov. Shumlin noted the success of firms like Dealer.com, My Web Grocer, Concepts NREC, BioTek, Global Z, Logic Supply, and others as examples of what our existing tools have helped accomplish in Vermont. In addition, he pointed out that large legacy employers, such as IBM, have not only directly supported thousands of good paying jobs for decades, but have also generated numerous spin-off companies and economic benefits.
“While Vermont cannot necessarily match or exceed the high-dollar incentives offered by larger states, we need more tools in the toolbox and the flexibility to respond to demanding situations to continue to grow these industries and expand these jobs,” the Governor said.
The funding -- $4.5 million for the Vermont Enterprise Investment Fund, and an additional $500,000 for the Vermont Entrepreneurial Lending Program -- will come from an allocation of the first $5 million of any unanticipated revenues for the current fiscal year ending June 30.
“To grow a 21st economy that supports Vermont’s employees and our employers, we must have the flexibility to provide incentives that will help retain and grow jobs,” said House Speaker Shap Smith. “I am pleased that the Vermont Entrepreneurial Lending Program announced today will commit funds to provide entrepreneurs the financial resources they need to grow Vermont jobs.
“I want to thank the House Commerce and Economic Committee for advocating for this program,” the Speaker added. “In addition, Vermont will be well served by the flexibility offered by the new incentive fund which should allow state government to be even more nimble when it seeks to recruit and retain growing businesses. These two programs, taken together will strengthen the Vermont economy and create even more good Vermont jobs.”
“Today, Gov. Peter Shumlin has taken two bold and necessary steps forward for job creation in the state of Vermont,” said Sen. Kevin Mullin, chair of the Senate Economic Development, Housing and General Affairs. “In today’s economic climate the state must be more nimble than ever to effectively attract and retain quality good paying jobs. VEDA has repeatedly demonstrated their ability to administer state funds in a very prudent manner. This will give them one more tool to help Vermonters seeking jobs and opportunity.”
The proposals are:
The Vermont Enterprise Investment Fund, authorizing the Governor to offer an incentive package to businesses, not to exceed a total cumulative value of $4.5 million, contingent upon approval by the Emergency Board, in unforeseen or extraordinary circumstances.
- Those include the acquisition of a large Vermont business at risk of relocation outside the state; an existing business in Vermont, which is a division or subsidiary of a multistate or multinational company, at risk of closure or a significantly reduced workforce; or a business considering Vermont for relocation or expansion.
- To be eligible for utilization of the Fund, the project must have a substantial statewide or regional economic or employment impact; investigated, been approved for, or have the potential to be approved for other state programs and incentives.
Vermont Entrepreneurial Lending Program, adding $500,000 to the $1 million federal funding for VEDA’s fund, which is designed to lay even better groundwork on the startup end for new and emerging technology companies.