State News

Politicians, business interests cheer economic development bill

By Erin Mansfield,

Gov. Peter Shumlin signed a 176-page economic development bill on Thursday, June 4, that lawmakers designed to help create jobs, boost wages and make it easier to do business in Vermont. Shumlin signed S.138 at Cabot Hosiery Mills headquarters in Northfield where Darn Tough Socks are made.

Among its many provisions, the law repeals the state’s sales tax on software bought through an online cloud, starts a downpayment assistance program for first-time homebuyers, makes it easier for entrepreneurs to obtain funding from investors and helps people with disabilities find jobs.

Several provisions in the bill pay companies to put their workers into workforce training programs. Other provisions direct the state to work with the federal government to help Vermonters with disabilities save money without supplanting benefits they get from Social Security or Medicaid.

House Speaker Shap Smith, D-Morristown, lauded the Vermont workforce in general. “One of the reasons [companies] stay here is because we have such a good workforce,” he said. Smith said repealing the cloud tax was one of his top priorities this session. He said the bill will send a message to technology companies that Vermont is a good place to do business.

Ric Cabot, president of Darn Tough Vermont, said the bill “keeps Vermont competitive in a global job market.” Darn Tough Socks, a Vermont-grown company, utilized the Vermont Employment Growth Incentive (VEGI) program and will soon break ground on a 100,000 square foot mill expansion that will add 150 employees over the next three years, creating an additional 300-plus full-time positions by 2020.

In April, the governor stood with Darn Tough and 13 other Vermont companies to highlight over 700 current full-time job openings. Those are just a few of the job openings in Vermont. A Vermont Department of Labor analysis of online job posting data as of January 2015 counted 6,774 job postings in Vermont, classified by industry.

Over 50 percent of these online postings are found in health care and social assistance programs, retail trade, and educational services. Another 20 percent of the online job postings are in finance and insurance; manufacturing; public administration; and professional, scientific, and technical services. While this data includes many Vermont employers, it is not comprehensive, as not all Vermont employers post jobs online, and in some cases jobs are posted on other sites.

Bill S.138 intends to spur job growth in a number of ways, including:

Expanding job creation incentives. Changes in VEGI will make it easier for businesses in parts of the state with higher unemployment to access this award-winning program and invest in employee training. In the eight years since the program was launched, companies approved for VEGI have created 3,038 new, full-time jobs, added $187 million in new payroll, and made $495 million in capital investments in Vermont.

Increasing access to capital for startups. Increased limits on non-licensed lending will allow investors to lend in amounts up to $250,000 without having to be a licensed bank or financial institution, giving startup businesses additional options for raising capital. The previous limit on non-licensed lending was $75,000.

Housing incentives for first time homebuyers. A first-time homebuyer downpayment assistance program will help employers attract and retain talent and help first-time homebuyers put down roots in Vermont. The money would be repaid upon the sale of the home.

Encouraging Vermont’s emerging tech companies. Vermont is an emerging tech hub, and eliminating the cloud tax sends a strong signal that Vermont is a tech-friendly state.

Attracting workers to Vermont. An additional $200,000 will be made available specifically for economic development marketing designed to help tell the Vermont story and recruit labor talent, businesses, and entrepreneurs to the state. An additional $100,000 will be targeted on recruiting businesses north of the international border to locate in Vermont.

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