Vermont’s spending on subsidy giveaways is substantial for a small state. Of the five programs we looked at, the largest, Vermont Economic Development Authority Loans, costs the state about $19 million a year. The Vermont Employment Growth Incentive (VEGI) cost $15 million in 2011.
Despite these relatively low levels of programmatic spending, some individual companies have gotten what are by Vermont standards substantial subsidy packages. For example, in 1996 Ontario-based Husky Injection Molding was awarded a $10 million subsidy relocation package (see below). In 2007 Green Mountain Coffee Roasters and Burton Corporation were each granted VEGI deals valued at over $1.5 million. Critics questioned whether Green Mountain Coffee Roasters, a company founded in Vermont, needed an incentive to keep from moving out of state. In 2010, Skypoint Solar, a start-up company, received an $8 million VEGI subsidy. The state also agreed to issue $25 million in Recovery Zone Facility Bonds for the company (see below).
Vermont’s Economic Advancement Tax Incentives (EATI) program, which began in 1998, was succeeded in 2007 by VEGI (though some EATI recipients are still claiming the credit and costing the state money). VEGI was justified as a high-technology incentive, but like EATI it is providing windfalls for many companies that would have invested anyway.
A 2012 audit of the state’s municipal TIF districts by the Vermont State Auditor found that municipalities erroneously retained $6 million of property tax revenues that should have been paid into the state’s education fund.
Out of the five programs we looked at in our Show Us the Subsidies report, four had online recipient disclosure: EATI, VEGI, the Workforce Education and Training Fund, and Vermont Economic Development Authority Loans. Disclosure for the Vermont Training Program began after the report was published.
- Show Us the Subsidized Jobs rank among the states: 5th
Big Giveaway Index
Major Subsidy Deals
Skypoint Solar (2010)
Skypoint Solar, a start-up company seeking to produce solar power cells, told Vermont officials in January 2010 that it could create 400 jobs in the state but needed financial help. Skypoint asked for $10.4 million in Vermont Employment Growth Incentives – a large subsidy by state standards and more than the $10 million annual cap on total awards that could be authorized by the Vermont Economic Progress Council. Gov. Jim Douglas promptly convened a meeting of the state Emergency Board, which voted to raise the 2010 cap to $23 million. The council then approved up to $7.9 million for the $50 million Skypoint project, which also received authorization from the Vermont Economic Development Authority for $25 million in Recovery Zone Facility Bonds. (Key sources)
Husky Injection Molding (1996)
In 1996 Ontario-based Husky Injection Molding generated a five-state bidding war for a large new manufacturing facility in the United States with a projected 1,000 jobs. Vermont, which offered the company a $10 million subsidy package, won the competition as Husky chose the town of Milton north of Burlington. The package included infrastructure improvements such as the construction of a $6 million bridge across Arrowhead Mountain Lake, connecting the plant site with Route 7. The town agreed not to increase the property tax on the plant for ten years. When state and local officials were unable to deliver on the bridge, the state instead provided up to $10.6 million in tax credits through the Vermont Economic Progress Council.
The plant opened in 1998. Husky cut jobs in Milton in 2001, but two years later announced a $13 million expansion, for which it was offered $500,000 in additional tax credits and an exemption on sales tax for building materials in excess of $250,000. In 2005 Husky eliminated around 70 jobs in Milton. Husky was purchased by the Canadian private equity company Onex Corp. in 2007. (Key sources)
Walmart in Vermont
- Good Jobs First found no instances of Wal-Mart subsidies in Vermont, but given the absence of comprehensive centralized data, it is still possible that deals have quietly occurred.
- We found no instances of property tax assessment challenges by Wal-Mart in Vermont, but given the absence of centralized data, it is still possible that appeals have occurred.
- Wal-Mart was found to rank fourth among employers in the state in terms of how many of their workers were relying on publicly-funded health insurance. This shows how taxpayers end up subsidizing Wal-Mart’s policy of providing low wages and inadequate benefits.
For more information, see the Vermont page of Wal-Mart Subsidy Watch.