Amy Spear

The House and Senate have each passed their own versions of the economic and workforce development bill. A conference committee must now reconcile differences as well as account for the Governor’s priorities that have been excluded. The Vermont Chamber has worked to improve the VEDA forgivable loan program. The House-passed version includes $19 million and more favorable program requirements for small businesses still struggling to recover from pandemic-related impacts, compared to the Senate’s $15 million for the program. In addition, the House-passed version contains $10.2 million for the Capital Investment Program while the Senate-passed version left this out entirely. The House-passed version failed to fund the relocating workers incentives and relocation network and marketing, which the Senate supported with $6 million for incentives for relocating workers and $4.2 million for a regional recruitment and support network. The Governor asked for these programs to attract new workers to move here and grow the workforce.

The Governor has indicated that if the Legislature passes this bill without appropriate support for workforce expansion, which he has repeatedly identified as one of his top priorities, he could veto the bill, sending it back for revision. With over $100 million in the House version and $95 million in the Senate version, there is still a lot in play, and the conference committee is under political pressure with a short timeline to resolve their differences.

The Vermont Chamber will keep fighting for the business priorities that will support recovery and workforce growth. Read more about the differences between the Senate and House versions of the bill in this comparison, prepared by Legislative Counsel, and in this rundown of the spending in the two bills, prepared by the Joint Fiscal Office.

The housing bill, S.226, was back in the House General, Housing, and Military Affairs Committee, as they considered an amendment creating a community partnership for a neighborhood development program. The Department of Housing and Community Development (DHCD) would operate the program and bring together local officials, nonprofit and for-profit developers, and employers, into a council to create a pilot neighborhood development project. The goal of the pilot is to understand and demonstrate how an inclusive partnership model to make targeted investments can support the development of housing in a smart growth area. The program would receive an initial funding of $1 million and, based on a competitive application, a pilot municipality would be chosen to work with DHCD and the council through 2026 to strategically invest funds to create a development-ready framework for new and infill neighborhood development and construction-ready building lots.

The Vermont Chamber has advocated for regulatory and programmatic changes that would incentivize the development of housing for middle income earners to address the workforce shortage impacting businesses. Just doing the status quo isn’t working. New partnerships and programs that involve the business community can generate innovative solutions to stimulate development.

With an eye on the Legislature’s May 6 target adjournment date, the House Commerce and Economic Development Committee combined the workforce development bill with pieces of the economic development bill into a new vehicle, with some notable changes. The VEDA forgivable loans received an additional allocation of $4 million, for a total of $19 million. Many of the technical changes that the Vermont Chamber advocated for will be added, including raising the cap on each loan to $500,000 or six months of operating expenses, eligibility based on a 20% reduction of net operating income, and the removal of language requiring at least 50% of the reduction of operating income to have occurred in 2021. In addition, the Capital Investment Grant Program has been restored, but at only $10.2 million, and $9 million has been allocated for the Creative Economy Grants. Notably from the bill is a minimum wage hike, as well as any relocating worker incentives and marketing funding.

The Vermont Chamber has long advocated for sustained efforts to grow the workforce by recruiting new people to move here to work and raise their families, because there are simply not enough people in the state to fill the jobs available. Unfortunately, the House has yet to realize that recruitment is important, while the Senate continues to support this direction. is still a chance that this important funding could be restored before the bill is finalized, so the Vermont Chamber advocacy team will work to secure this program. This problem cannot wait another year to be addressed, but with legislators intent on returning home to campaign by the end of next week, it seems that the House plan is to wait and hope the problem resolves itself. The demographic trends spell trouble for the workforce, and inaction will only lead to stagnation.

The Governor’s proposed budget made his priorities clear: grow the workforce, improve affordability, and put federal dollars toward transformative long-term investments. Legislative leaders responded with a budget that makes clear their values, some of which align with the Governor’s and some of which do not. Their budget process slashed funding for CTE infrastructure, regional workforce development coordinators, and tax relief for military retirees. Most critically, it will fail to adequately fund the proposals to grow the workforce by bringing more people to the state, through relocation grants and targeted marketing and outreach.

The Vermont Chamber has been engaging with the State Workforce Development Board’s Relocation and Recruitment Committee to work through the issues stifling growth, but to make progress toward the goal of reversing our population trends, the Legislature must show up as a partner and make intentional investments to grow the workforce. The alternative is stagnation and decline.

Governor Phil Scott dedicated his weekly press conference to the ongoing state workforce challenges with Mathew Barewicz, Director of Economic and Labor Market Information, citing data that captures how dire the economic outlook is for workforce participation. Barewicz shared data highlighting the statewide labor shortage. In recent years there has been a more than 10% decline in labor force participation in more than half of Vermont counties. Six counties have declined by over 15%. Additional population data is expected to be released by the U.S. Census Bureau in the coming months.

Mathew Barewicz was a presenter at this year’s Vermont Economic Conference. His seminar, entitled “Where Did Vermont’s Workforce Go?” is available to view in full, here.