May 12, 2008
Most Companies Exceeded Job Creation Targets
MONTPELIER, Vt. – The state’s new job creation incentive program got off to a great start as seven of the companies approved in its first year created almost 300 new jobs in 2007.
According to preliminary information released by the Vermont Economic Progress Council, which administers the newly reformed incentive program, the companies projected the creation of 270 new jobs and $9.5 million in new payroll in 2007, but actual job creation was 296 new jobs with $10.5 million in new payroll.
“We are extremely pleased with the preliminary performance reports from companies participating in the Vermont Employment Growth Incentive program,” said Karen L. Marshall, Chair of the Vermont Economic Progress Council. “The authorized incentives leverage important economic drivers: new, well-paying jobs for Vermonters, new payroll, and capital investments in our communities.”
“In addition, we get additional revenues to help pay for other programs,” Marshall said. “For 2007 alone, the State invested about $550 per job and got the jobs, capital investment, and a revenue return of $1,158 per job. This is truly a good investment for Vermont and reflects Governor Douglas’ commitment to job creation.”
Under reforms passed by the Legislature and signed into law by Governor Jim Douglas in 2006, the VEGI economic incentives are authorized based on job creation and capital investments that must occur before the company receives incentive payments over a period of years.
The previous program had companies earning tax credits that were applied against future tax liability. The new program allows start up companies, which may not have tax liability, to take advantage of the incentives as well as providing greater accountability.
A new “Green VEGI” provision proposed by Governor Douglas and approved by lawmakers this year will provide enhanced incentives for environmental technology companies.
During the first year of VEGI, the Council considered 17 applications, of which two were denied, 5 rescinded for various reasons, and 3 were approved but will not commence until 2008.
The remaining 7 projects were approved for incentives totaling $5.8 million to be earned between 2007 and 2011 and paid out between 2008 and 2016.
These projects are projected to create 1,000 jobs over the next five years with $37 million in new payroll and an average compensation of $48,400, and also invest over $68 million in new facilities and machinery and equipment in Vermont.
In 2007, these seven companies projected the creation of 270 new jobs with an average compensation of $48,400; $9.5 million in new payroll; and capital investments of over $23 million.
A preliminary review of the 2007 claims filed by the companies indicate the creation of 296 new jobs with an average compensation of $50,800; $10.5 million in new payroll; and $22.5 million in new capital investments.
Marshall noted that the Vermont Department of Taxes is in the process of examining the claims and verifying that targets have been met before incentive installments are paid. Their examination, and pending legislation, may cause adjustments to these estimates.
The companies receiving incentives were:
o Monahan SFI: The incentives allowed family-owned brush manufacturer Thomas Monahan to purchase and reopen the Specialty Filaments plant in Middlebury, putting over 100 laid off Vermonters back to work.
o Vermont Timber Frames: After moving to New York several years ago, the incentives convinced this building component manufacturer to locate an expansion project in Vermont, reutilizing an empty industrial site in Bennington.
o Omni Measurement Systems, Inc.: This small research and development (R&D) company was preparing to take its product from the drawing board to assembly line and could have outsourced production, but the incentives instead mean Vermont shares in the company’s success supplying our Air Force personnel with necessary equipment and reaps the new jobs, capital investment and the reutilization of an industrial building in Milton.
o NEHP: The incentives helped this Williston manufacturer of process piping modules for the semiconductor, solar & lifescience industries jumpstart its R&D efforts to take advantage of new market potential.
o Green Mountain Coffee Roasters: Because of the incentives offered the company established its second Vermont facility in Essex Junction instead of outside the state, bringing more than 100 jobs there. In addition, jobs were added at the Waterbury headquarters and hiring continues at both sites.
o Burton: The incentives helped ensure that this Vermont company did not follow in the steps of others in the winter sports equipment sector by moving their headquarters out west. Instead, a major expansion will be located in Vermont.
o Energizer: A new battery line that could have been installed in any of the company’s many offshore facilities will be in Vermont because of the incentives, along with many new jobs and capital investment that helps ensure the future of Energizer in St Albans.
The Council approved the applications after reviewing nine guidelines and applying a rigorous cost-benefit analysis which showed that because of the economic activity that will be generated by these projects, even after payment of the incentives the State will realize a minimum net increase in revenues of over $8 million.
The Council also determined that these projects would not occur or would occur in a significantly different and less desirable manner if not for the incentives being authorized.
The Vermont Economic Progress Council is an independent board consisting of nine Vermont citizens appointed by the governor that considers applications to the state’s economic incentive programs.
The Council is attached to the Vermont Agency of Commerce and Community Development, whose mission is to help Vermonters improve their quality of life and build strong communities.
To view the report, visit: http://economicdevelopment.vermont.gov/Portals/0/VEGI_2008_20Annual20Report.pdf
For more information, visit: http://www.thinkvermont.com/vepc
Source: Agency of Commerce and Community Development
Last Updated at: May 12, 2008 08:36:07