MONTPELIER, Vt. (WCAX) Lawmakers in Montpelier want to shine a light on economic incentives enjoyed by some Vermont businesses to make the program more transparent. VEGI awards, or Vermont Economic Growth Incentives, are awarded to companies who expand and add more jobs in Vermont. At least that's what we're told. But right now, by law, many of the details of those individual grants are kept from the public.
A decade ago just seven people worked at New England Chimney Supply in Williston. Neil Hogan, the company's vice president, says they were given a $50,000 VEGI award from the state that they put toward manufacturing equipment and growing their workforce.
"As you know, there's capital that you have to raise. And the more capital you get, the more successful you're going to be. That $50,000 upfront was a very important thing for us," Hogan said.
Using the VEGI grant, the company was to buy an Accurpress machine that's used to shape metal into precise right angles. Fast forward 10 years and now 75 people work on the factory floor and offices, manufacturing and selling 20,000 parts for chimneys across New England.
But under state law, neither New England Chimney Supply or the state is required to provide the details of their VEGI deal. A new bill in Montpelier aims to change that. It requires the state to disclose information about all future VEGI awards including the amount of money given and the number of jobs it creates. Sponsors say it's aimed at pulling back the curtain on how economic incentives are awarded.
"Now, we can really look across all of the businesses that are receiving awards and understand if that is, in fact, an effective strategy for bringing up wages for Vermonters," said Rep. Emilie Kornheiser, D-Brattleboro.
To qualify for VEGI, companies must promise they couldn't add multiple jobs at once without the state's money. Vermont Auditor Doug Hoffer has long questioned the value of the VEGI program, saying there's no way to tell if those jobs would have been created otherwise.
"Company 'X' comes to [Vermont Economic Progress Council] and says, 'We want to create 27 new jobs and if not for this award, we wouldn't be able to do that.' That decision to expand was made in the corporate boardroom. I have no access to evidence about that decision-making process within that company," Hoffer said.
But Vt. Commerce Commissioner Joan Goldstein says the program has been a boon for economic development. "It's like we have an A and we're going for an A+," she said.
Goldstein says Vermont consistently ranks among the top states when it comes to economic development transparency and that keeping the VEGI program is a way of mitigating risk. "The risk of them not doing it is greater to the state because it means that we will lose out on that value of the entity operating and hiring people and continuing to add value to the economy," she said.
Despite concerns of transparency, Hogan says the VEGI award came at just the right time for his company. "It's been a great ride from 2010. We're about ready to hit our 10th year in May, which is pretty spectacular," he said.
Gov. Phil Scott is a big advocate of the VEGI program and is asking lawmakers to spend another $3 million on it in the next budget.