On Dec. 1, the Emergency Board approved Gov. Peter Shumlin’s recommendation to increase the cap on the Vermont Employment Growth Incentive for projects in economically distressed regions of Vermont. The approval allows for consideration of proposals that could create 200 new full-time jobs and $6.5 million in new payroll.
Regions of the state that have historically higher-than-state-average unemployment and lower-than-state-average wages are eligible for increased incentives under the Vermont Employment Growth Incentive (VEGI) program, but the ability to approve an increased incentive is capped at an aggregate of $1 million for each calendar year. Applications to the Vermont Economic Progress Council (VEPC) from businesses proposing job creation and investment projects in these regions have recently increased, causing the cap to be reached. The Emergency Board today approved an increase in the cap from $1,000,000 to $1,500,000 for 2016.
“I want to thank the members of the Emergency Board for joining me in support of job creation and investment in parts of Vermont that need it most,” Shumlin said. “Allowing increased incentives for these regions … means job creation and opportunity for Vermonters where it is most needed without additional cost to the rest of the state.”
The projects, all scheduled to begin in 2016, have the potential to create almost 200 new full-time jobs and $6.5 million in new payroll, with almost $40 million in capital investments in areas of the state in need of these new investments, including two projects in the Northeast Kingdom. Even with the higher incentive approvals, these projects will also generate an estimated half a million dollars in net new revenue to the state.
Companies are paid VEGI incentives–over an extended period of time–only if the new, full-time jobs and payroll are created and maintained and capital investments are made. New tax revenues flow to the state from this economic activity before incentives are paid to the company and, in the end, the state receives more new tax revenue than is paid out in incentive payments.