We're going to spend the rest of the morning trying to advance some of the governor's proposals. We're not taking votes, but I think we're at the stage. We've heard an overview several times, and we're starting to get into a bill form pretty soon. I don't know. Actually, the administration has draft line, which is immediately said needs some massaging to move. It was revised yesterday, so it is closer to... Would you mind sharing that for us? Not at all. Take me a second just to find my... So while you find that, I'm going to find my... This and the like. Sure. It's a rental fee. It'll be over in a couple of minutes. Well, while the Secretary is looking at that, we should be thinking about whether, as we hear these proposals, whether we want to, like, combine them or do them separately.  I don't know that economic development is as suited to that. So we'll see. I'm sure I have the most recent version, and I'm guessing that practice for editable work copy is something like this. And we've got drafts ready of all of the various initiatives that I held mine for you to begin with. So the first one I've sent is the recruitment relocation piece. So let me ask you this to ground us. As I mentioned, I think before, I disclosed that I had talked to the chair of Mark Cott and our understanding was that he was going to focus before cross over our workforce development and we were going to focus on economic development. With all these drafts that you have, do you have any bills floating around by individual legislators? Are you hoping that this committee would put out the bills from here? Broadband has sponsorship in energy and technology, house energy and technology. There are sponsors waiting in the wings for various things, but we were sort of waiting for cues from you, Chairman Mark Cott, on how you wanted to proceed on that. I sent an email a few days ago. It's probably lost in the harass of the early part of the session with that. It's not reading about work to me. What was the gist of it? Here's the outline of the various components and do you have a preference on whether we find sponsorship or you want to start? We'll discuss that in committee. My preference would be that the stuff come from here, either individually or as a committee. So the way we've got it divided up right now is as that... It's similar fashion to that the infographic that we distributed. There's a workforce recruitment relocation language. There's a housing package. There's veggie modernization. There's a broadband package. It's housekeeping, which will originate elsewhere. And an aviation economic development bill, which is something Chairman Martin was born for. So he's got that language. In addition to that, there's an industrial park legislation that has drafted and I think the downtown tax credits have been rolled into the master housing bill. I didn't get a chance to open it last night. So they're in the master housing package. Okay. Let's... Maybe we will or maybe we won't get to housing today but let's start with recruitment and retention and I don't know if the members of the committee recall that, you know, this committee has been a supporter of the department last year, the agency last year, in terms of looking to bring people from out of state. There's been a lot of pushback in the legislature that I've heard already about why that's the focus but one of the criticisms that I mentioned was when we learned that the money, the million dollars I was out there was going to go for moving expenses. I expressed some concern that that's something that employers usually pick up anyhow and could we find some other areas to use that money that would achieve the same purpose. And so maybe that's a good start. The answer is absolutely the initial framing we've got is just essentially placeholders for what things could be paid for but I don't believe we're wedded to any of those components. Have you given any thought as to where, you know, if you had the parameter of $5,000 per relocateee or whatever the term would be, what other ways you can incentivize to have the look to provide those? Sure, go ahead. Yeah, so based on some of the invoices we're getting now on the remote worker, some of the things that come up are things like lease deposits. So we do think the $5,000 can go toward many different possibilities. The question is do we want to limit it into a particular category or leave it more broad? You know, advantages, disadvantages to both. There may be young people who might want to use that money to defray student debt repayments. There are many expenses for somebody moving other than just a bank. Go ahead. No, I just think that, and it may be in the white paper, which I have to admit I apologize, I have not yet read. But the criteria, I just think it would be great if we had a set of criteria that we could all look at to get a notion of how this isn't just a broad stroke of paying people return. I think you're right. We were hoping to sort of refine that with the committees of jurisdiction. So we didn't have an initial misfire of hey, they want to pay more X. Really? So I'll throw in my thoughts and other committee members could. I would like to see specific things, and I think I have mentioned these deposits would be really good. But there can be multiple things, but I wouldn't want it to be a discretionary program where you say, well, this guy looks needy to me and this will work. But it could be broad enough that it has three or four or five different things like we did with World Worker. It has to fall in one of those things. So I don't know what we need to do now. We could spend some time brainstorming, but I think we'd prefer for you to go back with your people and have a brainstorming session of let's come up with a handful of things that might catch people's attention and grease the wheels for them to come here. There's two things that come to mind, Senator. One is sort of in the initial array of ideas that we've got what things could we invest in and also push other components of Vermont's economy forward or tackle another problem. So you identified broadband, for example, and remote worker, we could extend that in the other worker component as well. Upgrades to housing, things that are going to add to grand lists that are going to employ Vermonters to do upgrades, things of that nature. Weatherization specifically could be one of the things. Student debt repayments also always an alluring component. I think we just have to be careful that we're not only, I think we would face criticism of just having a student debt repayment option for folks where we're relocating to Vermont versus existing Vermonters. Would it also like do something to pay people's rent? Yeah, they've had a couple of months. That's the only, they get cash plus paid rent? What did they do? I think that was part of their package, was that it could pay for several months' rent. Okay. More generous. So I think we're in a workforce path. For me, given we still have so many jobs that are unfilled in Vermont, I would really like to make sure that if we do this, that it's tied specifically to jobs that are needed here so that the people who might be being recruited are specific to fill some of these 10,000 jobs we still have unfilled. So that it isn't just random people moving in, but very focused people coming to sort of fill those jobs that we need. Maybe I missed something. One of the factors here is they have to come into a new job. So you're saying it has to go more specifically than any job? Yes.  We have specific jobs that are not being filled, right? We have identified 10,000. It was 11,000. We're now down to, I think, about 10,000 unfilled jobs. So to me, one of the reasons I went to support this is to actually tie that relocation to specific companies who have specific needs. So that we're feeding the problem. I mean, we're not feeding the problem. We're filling the problem. We're solving the problem. You're addressing the problem. That could be a component. I know you're saying I'm trying to think about how to actually administer that. That's what I was talking about. Because, and there are so many needs, so I don't know what sector does not need to work right. Right. So I'm just trying to guide and think about that. As people are thinking, you can guide them to the needs rather than just say, we're going to open this program that anybody wants to come work here in Vermont. And these are our criteria. You say, well, one of the criteria is you're actually filling a job that we didn't have open in this area. It strikes me that one of the ways that we could refine the pool of applicants and then administer the program could be we'd have priority sectors. So if you're in a priority sector, say healthcare, childcare, something along those lines that you go to the top of the list and then you could be prioritized with it. I think that would be, I think that would scratch more itches than just bang for people to come back or come. Chairman John Young is here from the training program. He just does his hand up to you. Thanks, thank you. I'm a little passionate about workforce. I have two young graduates myself. And I look at one of Vermont's biggest problems is our ruralness, and I also worry about our clusters. So having young men that are college graduates that may or may not be moving out of state, they're looking at clusters of an area. So if I do make the move to wherever, if this job doesn't work out for me, what's next? Young people. Right, right. People in general, right? But I just thought, could you have a regionality to this where we don't have clusters to sort of incentivize somebody to take the leap that they might not make? Like Northeast Kingdom or something? Right, I agree. There's another priority you could give to people who are willing to go and work in Springfield. Correct. That don't have other clusters. Northeast Kingdom or Benton or LaRom. Yeah, I agree. Just my thoughts. No, it's because we can really guide this and help spread the workers. Well, yeah, we do want to also focus on this committee on rural economic development and this is that that could be another kind of preference. The concern is practically you need to think ahead in terms of administration. It's one thing to give preferences if you're expecting thousands of people to apply right away, then you can sort of look through that into preferences. But if you're trying to give the money out in a timely fashion as people come, you know, I don't know how applicable are the preferences. I agree. Yeah. That way, if we were to structure it, so if we got applications from the Northeast Kingdom, Springfield, and picked up the spots that the legislature's preference to incentivize and also a separate section for sectors that we would migrate to those applications first but leave it open that there's a quota in those that within the defined time parameter of a given fiscal year that if you didn't get enough folks in those, you could cascade down from there. And then there's this timing preferences. I guess there could also be my natural preferences like we sort of do with, didn't sort of do something with the FCE in terms of like giving preference or something like this. I mean, you could say we'll give $2,000 if you move to Chippin County. We'll give $5,000 if you move to Chippin County. Yes. Exactly. That's what I think John was getting at. Yeah. Because I think you can really weight this. What have you generally thought out of the proposal thus far but is there a timeframe? How long someone has to be out of state before they could qualify or could somebody go and establish, say I'm a resident in New Hampshire for one day and then I come back and say I'm moved to Vermont so I'm moving from Ohio State. Well, we have not. It specifies that we create the criteria but we don't specify the criteria. We're happy to force them out in the statute. I don't know that for me that I would want to get into that level of minutia but I do think I would want to have an idea of what you're thinking before giving me a blind check. Yeah. I'd like to. I think the way we had it dropped is we were going to leave for the next half year. It would be based on the new tax filers. So they would have to wait. It wouldn't be like they're getting a check. A little bit different than what we're doing right now with Vermont. I think that's still on me. It is. I'm just trying to play out in my head how that would relate to leaving the state for a brief period of time and then coming back to try to take advantage of the criteria. I think we'd have to ask the tax if there's a way to criteria right there. As I was, as you know I was during the fall I was very concerned. It's actually, we had originally proposed a tax credit for the remote worker program. We got pushed to the grant program and I'm sort of glad we did. But I don't want to, I don't want to see this program somehow if we could avoid it being part of the tax program in terms of like the, I mean the people are, people are going to move here as an incentive for instance as a deposit. They're not going to want that money now. They're not going to want to wait to see it 20 months later as a tax grant. So. I also think, I mean this is, I really think we need to think about what we want to inset. So I would agree with John and I think we need to fill those jobs and it strikes me that actually we don't want necessarily, we really want people who've been out working so you're going to see, you're going to be able to have a criteria of job experience. And so that we're not just bringing level entry post college kids back. I mean that's fine but quite honestly I'm the mother of two young men. Coming back here as a young person if you're not living in Burlington it's not necessarily easy. It's very socially challenging but in many ways it would be, because I don't want people to be insented to come back be here for a year and realize I can't meet anybody. There's no social scene here and leave again. So the plus of insented people with a little more experience is they may have seen enough of the world to really appreciate where they are and stay. So do we have a stay requirement? Like how long are we, if once we give you $5,000 for whatever criteria we give it to you for what's your commitment? Is it a five year commitment to staying in Burlington? Ten year? It's much easier to do that when you're with slightly older people, 30 and up. Just saying, from my human family experience I think it's a real challenge to social life here unless you come as a partner. I think that's how, the original legislation was not ours but I think the reason it appeared as a tax credit was the idea of a graduated payment that had an attachment to multiple tax flyers. That's a good point, but I mean maybe that sort of dictates some sort of payment over time. Such a small amount. Pay your broadband bill or something like that. So if you leave after one month while you're getting $100 or something like that. It's not, I mean this is creative stuff, you know. Yeah. It takes some thought not only in terms of the purpose but also the administration. Because it's not really one that's subject to a payback. Right. First of all, good luck to get the money. I'm just coming into this. It's good to end it. It's good. It's already getting complicated and so I would just hope that it doesn't get so obvious that nobody's going to vote for it. That's it. I think that's the balancing act. The balancing act we do between filling the needs we really have and not making it complicated. But we also don't want to make it so lucid. We also want to solve some of our problems. Yeah, and you know the one of the benefits that the agency has been out of bastard about is there's value added to this thing in terms of publicity and attention to the state of Vermont and get that as well. I mean you could probably say with remote worker even if he never gave out a grant it was worth doing. $3.2 million. Right. How do you calculate that? By media impressions and their value. If you were to pay for that. Correct. The equivalence of all the press we got on remote workers. We equated that to 3.4 million. Oh my gosh. Yes. What do people want? We're talking about what we're going to give them. What do they want? We know. We had an extended conversation with representative told about this yesterday. We know what so there are measurements of people that have come to Vermont or have stayed. We don't have measurements of the people that have not come. We can't measure the absence of relocation or the absence of business recruitment. With that as the foundation what we know is at the heart of people. We're talking about people so we'll talk about people please. What people want is a cross-section of they're moving because they have an affinity for Vermont to begin with. It's not a singular thing. They potentially have family here. They identify with Vermont's ideals are sort of ethos of social identity, ethos of taking care of the environment, those kinds of threats. And then what the next layer is sort of the challenges of getting here to make the move once they've identified. So that's the recruitment piece. We're identifying the people that have all those pieces. We start the messaging. Then we're at the stage where we're actually trying to convert them in one housing that is affordable with a small they want a job that is that pays commensurate with the cost of living. So not necessarily the Boston New York pay rate translated to Vermont, but the commensurate rate. And they want a community that's got all of the requisite pieces to live their education, health care, outdoor recreation, the things that we talk about in terms of those regional ecosystems and economies. That's not the 8,000 foot view but sort of the 30,000 foot view of the themes that we come through, that come through on a pretty much weekly basis. Either in studies done by UVM or in just the thousands of conversations we have with folks, whether they're in the state of state program, they're telling us this through the remote worker program or their folks that President Kohl was talking to on this chairlift that's done this weekend. So, and also just to add I just happened to look at some of the applications that came in of remote worker and there's a guy who just moved to Burlington, New York City that he grew up in Vermont. It was, I couldn't believe as I'm reading his story it was classically what we wanted to do. He'd been away for about 15 years all over the world and he resided in, he's back in Burlington. There were about four applications that have been approved. One person moved to Bennington one to Burlington, one to Estes Junction. That was the other one did but there are three people that are willing to tell their stories so we're going to delve a little deeper to understand it but I think this money kind of tipped them over and it wasn't the full 5,000. In many cases they claimed you know 2200 was their so it was very interesting and it was also maybe the money will go further than we expected because of that. We are about to embark on a study of people who have moved to Vermont over the last three years understand that better and that's through the you know Faraday, the artificial intelligence marketing firm and we'll be able to answer that a little bit more precisely. So we don't have the same, this is very interesting we don't have the exact same problem on the people staying with the remote worker thing because theoretically they had a job or somebody had a job. But I'm thinking that you know one of the things one of the ideas in terms of the people staying on this new program is to be an extension of the renovation grant and somehow you could take a lean or something and if they leave and the house was in a house sale which may not be the harm of the situation, at least have your equity to get back from that they left prematurely. There may be a way to get money back, to get the money out slowly so that you're not getting people that are just trying to get out I don't think many people come here and experience that whole change and not be here for a while but there could be some that just don't like it and would have wasted money. We did hire and bonuses for years in Burlington to recruit public safety folks and we had a clawback provision and you had to stay for a certain number of years or you always had to pay it back we never had to actually implement that we did, you wouldn't have had to get it we don't know generally people were pretty good about I understand I need to be here maybe it cost to do it in the program certainly seen another corporate side that's the reason we had to change the veggie program we were giving people money and they weren't living up to their obligations or they were leaving or will have you and clawback even the business was extremely difficult we're very concerned that we don't get ourselves in that situation we'll try to draft some clawback provisions and some ideas because we didn't think about it with the remote workers especially in sending they're moving to areas where we need them to move not just back to Chittenden County so to me to tag onto what John said I really think that's an important criteria we've got some pre-defined area definitions labor market areas new market tax credit zones opportunity zones so you wouldn't necessarily have to reinvent the wheel you could add in multiple locations we've been trying these preferences in a lot of different positions already so we can just peak it back this will just be an added it's hard to clawback not in money we're talking about the practical part the cost is to exceed the amount that you would get back if you build it into a contract with them we obviously have to sign something to get this we have to be engaged and something to we're going to get rid of soon for $5,000 we'll make good use of our small plans for it there are ways to do clawbacks that are almost self-enforcing and there's also a benefit act over time which can also mean that's the incentive to stay but the benefits are so small and that's one of the difficulties that over time you lose the impact and it's the impact that's really important yes and no I agree generally for the most part but if you think of something like your cable bill or your internet someone say oh I got $5,000 but instead of getting a $5,000 check up front you might get 100 or 4 years or something like that and I think also if you know up front that actually you're being asked for something in return for this it's it's got to be self-enforcing we've had a lot of thinking even though they say the cable thing that's all administrative might matter we'll ask the tax commissioner I wonder if it's but it could be as simple as we put a paragraph in that says there's such a thing as a worker relocation tax it applies if you receive this grant and you leave within X number of years you owe a pro-rated amount back to the tax department and then it becomes something that gets attached as a tax that's different than having to go to a small claims so we can inquire about something like that so I have one personal question I have to ask look over here making this up on the fly I mean that is one reason why making them weep for the following tax year it's not such a bad idea we thought because it's like it shows commitment that they're not just getting here getting a check and then bolting that they get here and then the fall we've got to think it through so I did have one I did have one personal question that I had been meaning to have every time you're here I'm going to keep forgetting I actually have my my partner daughter is a perfect person for the remote worker she doesn't qualify because she came a few weeks prior to January 1st but she's an architect from LA and she's planning on staying coming back to a model staying here but she's she is an independent contractor she worked for a business in LA and changed over to an independent contractor's status still does all her work essentially pretty much through her but she's got a lot of freedom and she then went she came she asked them can I do this work in Vermont and they said yes so are we missing anything in the remote worker program by not allowing independent contractors who work remotely out of their home to qualify for these for the benefit right now they have to have an employer we may be at the very complicated it's really complicated once you open the independent contractor window because there's so much of the 21st century economy that relates to that there's really almost there's a lot of verification yeah and we would be out of the money already if it was open there's so many people in that given the demand already for this there's a lot wait and see and let's see how it goes but but I think but she's the class of person you want to company but she came in well that's always a problem you don't know it's got a little bit of luck so for me some of the hope is that some of those companies may depending on what their sizes may actually come themselves the whole company you know it puts our teeth into these tiny small way into that company and if you get the right person who comes and works remotely it's the vice president of whatever and they're reporting back to the mother ship a so that is sort of also my insidious you know hope that we got Connecticut and Massachusetts this also goes back to the question I asked before what do people want the other situation of looking at jurisdictions to put business in I was most impressed by the country that said we got all these things but what do you want we're flexible and the ability to construct something that gives a degree of discretion so that you can tailor a solution to that because every individual has a different need somebody may want internet service somebody else they want a cash grant for rent somebody else people want different things and I would like if we do any of this to have it sufficiently flexible so that there's some discretion may I just tag onto something we talked about last year so you will all remember the exciting New York Times article about e-residency and we had e-residency debate was one of the things to consider for the future in our financial technologies report from last year how might e-residency fit into this what because it is what can we get out of e-residency that might be an incentive is that worth pursuing at all I put that out there just because it is as you know I encourage you to reread the New Yorker article about this domain Australian could offer a lot more than we could offer for e-residents but is there something we could offer that would and financial value we could get from having e-residents in Vermont it was a proposal in the financial technologies report from last year something for us to maybe think about I don't know yet what that would look at this year Senator we did look at it last year and didn't find exactly the right red stuff to pull on to make it work but given this you know or what creating a bigger net and helping to bring people here is this an opportunity that would lead to physical residency or how could we make it something that would be a kind of exciting additional certainly we'd get a lot of reds a lot of reds if we could figure it out anyway can you get a week for us to yes I'll get you the New Yorker link and I'll get those yes great good point I will get that how is it working in Estonia Estonia has an entirely digital economy and governmental structure you can do everything on an app they are leading the way and Talon is a great city to visit have you been there many times and what took you there I have an adopted daughter who was born in Estonia cool you may be our secret weapon does your residency mean that you are you able to collect tax on these people well that's that's one of my questions what's the down but I think that's what we have to what's the value we would get for extending having to make an American version of Estonia residency work which no one's figured out yet so maybe we could be first well I'm trying to figure out how we could get people who don't live here to want to pay taxes well you have her from the airport and we pay a lot less tax everybody's laughing but from your European point of view we pay nothing in tax we are according to world economies under tax so let's just remember that in the context of Europe in particular they're under tax so actually it might be an attractive thing go figure something tells me the Europeans are going to be angry someone's trying to extricate themselves from paying tax in their home country by being a Vermont e-resident well they may do that in addition to wherever they're jurisdictions it doesn't matter it could be have a corporate actual advantage that can give them access to markets or something that they don't have otherwise and that is what we need to figure out okay so hey baby let's check it out so we spent about 40 minutes on the new proposal what else what's a good segue from that in terms of continuing on recruitment do you have is there anything that you want additional information on so that's the back end proposed million dollar investment the front end is the actually the recruitment component of that which has two large buckets the statewide strategy and the regional investments right yeah let's talk about that again so the the two pieces would weave together to create one unified strategy but with two buckets of investment the first would be the statewide marketing initiative that would be inclusive of the state's economic development marketing plan which is something you created in 2016 prior to my arrival that has been invested in being one year increments for the last three years so that would be important that would be 200,000 last year 200,000 200 years before I think it started at 200 then we created the plan and then we went we got carried forward funding each year thereafter for 250,000 so how much is in the government's budget this year it's all enclosed into this 2 million so rather than add another fragment what I suggested is this million would include economic development marketing add the statewide recruitment effort which would be partnering with firms to do the digital analytics to do the messaging and to create that conversion funnel simultaneously an investment in regional recruitment and marketing strategies around the state so that individual regions of these regional economy and ecosystems could create their own I think I need my infograph yeah the infograph and actually some of that is in the white paper it is in the white paper and the white papers are in this manila envelope that's how they'll stand out there's some compelling work going on in some of our RRDCs and with professional groups and chambers of commerce and pockets around Vermont doing marketing and recruitment and what we're suggesting is rather than invest at all in one centralized effort out of the agency we'll have a centralized effort but then we'll also have investments in the three regions to create a fabric of messaging for the entire state that has some region specificity that allows them to do more with the resources that they've got doesn't create additional fragmentation because the entities the efforts already exist it's just additional investment into them and that all holds together to create this unified effort and one of the reasons economic development marketing is rolled in there is we don't want to just continue to create additional fragmentation another program, another thing if we weave it all together we think we're going to get better results better but there'd be one marketing plan so because they can't afford we'd have one strategy and that's one strategy of one purse that it's paid for correct and then follow up region exactly I think that's a great description does the white paper have language that you're asking for have you legislated a language the legislative language I sent to Kayla a few minutes ago it's an expanded version of what we shared with you last week it's just a format that goes better is that this yeah it starts out with economic development and marketing section three did you get the correct one I'm just giving Michael one you gave us last week I sent an updated one and sometimes when you send it out of the I did I'll try against standby yeah is this I think that's the one you attached we you're envisioning this forgive me that I'm playing you're envisioning this as being not separate from the budget building this language whatever it ultimately comes out it's not that long it's not that specific maybe it is I haven't really focused on it it's a big policy changer are you envisioning this in the budget bill or are you envisioning a separate stand-alone bill however the literature would like to proceed I think it's fine it's in the governor's proposed budget so there's a placeholder there but I don't believe we're wedded to one direction or the other you explained to me in like a minute whether it represents an up or down in this area in terms of budgeting it's enough in addition to the $1 million for recruitment that we just talked about how much is another 1.4 million or something it's 2.5 in total a million in the recruitment initiative $500,000 to the department of labor for relocation and a million in the incentives so in aggregate it's probably 2.25 but because we're taking an economic to build a marketing role so describe those two or three other pieces relocation incentives the incentives are the component that we were working on for the first 40 minutes the grants as drafted is $1 million okay the first million is the relocation component which I just described the central effort and the economic development marketing tie-in and then the regional component and then the middle piece so the first piece you find is that like similar to think Vermont relocation? just because it's the marketing that incorporates those components it sounds like a unified marketing plan that then would be distributed and accessed regionally yes I should also say we're missing the commissioner of tourism because of an illness this morning but she would also tell you that this million dollar spend also would bolster our tourism efforts we would weave in the state-to-state program and try to leverage a number of creative ideas they have around converting visitors to being residents so there's the potential for I think we're already seeing an increase in tourism visits as a result of the recruitment effort as well and against we're trying to unify this so we're not asking for some money in here we're asking for money there and we're asking for money here and we've got these three tiny fragments we want to really make it a unified meaningful effort that will achieve multiple outcomes so the effort is the marketing then the cream in the middle that's DOL is the a skill boot up people are on the hook so you've got the fish in the pole and now DOL's job will be to assist those folks with relocation that effort takes two paths as well a centralized effort at DOL technology will open in there there's some supervision of the relocation effort and then there is also a regional investment as well and as last draft they're working on a new draft right now I think it was paying for three regional recruitment specialists that would be in the field reporting back to DOL but at RDC or at our one stop portals or building on robustness of these one stop portals where they would then go and then find all the programs they could access and all the support they could access for federal money, state money don't care about that they just care about what it is housing components just helping personalizing the actual relocation versus having it be all digital and asynchronous that would be regionally well that's where our one stop is so if we drive business to the one stop portals they send them yes we've been really mindful about trying not to create a bureaucratic monolithic thing that lives at national life or at DOL to really put these things out in the field so you wouldn't need these kind I mean it's we need a sort of a holistic recruitment and retention program so when people attack like our remote workers like that it's only a small part of this that would all get different ways so in this particular context these kinds of services wouldn't be necessary for the people in the first million dollars because they already have expressed their interest they've got a job they're coming here and so we don't need to like help them anymore those folks could take advantage of those services but they'd also be available more broadly so we would I don't think we would want to shut them off from using the relocation agents but they would also have broader impact for folks like with remote worker we've got a variety of people that are now in the relocation pipeline that may not be part of the grant program so we want to be able to provide them with the path here as well I mean I would love it if everyone who came was tied to one of the jobs we need to fill but they're not all necessarily going to be that and they may be bringing other family members with them who need that kind of assistance so the hope is we're not just relocating one at a time there's family units where there's kids for our schools which is why I again thought of more experienced workers coming in as also home you're thinking like the commissioner well I'm just thinking how big the problem is and we aren't here is great but we also need to fill it here, here and here there's a lot of birds with ones this is your given that you got the green light for two and a quarter million dollars this is your best thinking as to how to spread the money around it is and important to note that in the in that first million in the recruitment bucket we had an original draft that specified we're going to spend 100,000 in state-of-state we're going to spend 200,000 in target identification etc and our best thinking was it probably doesn't make sense to be that granular because we want to be able to invest in the things that are working and not be pigeonholed to have to spend x on this bucket that bucket doesn't work we should spend zero we should spend more in the bucket that we're finding that works we're confident that this strategy will work because we're already using it in tourism so using analytics to identify the targets we can then tell who's clicking on messages who's pulling on those threads to visit particular properties and then for some cross-section of them we can actually tell when they come to Vermont and along they're here where they are not their names we're not collecting we're not collecting biographical information but we can tell that person 127 started in Buffalo New York on October 1st of 2017 looking at tourist properties that they wanted to visit in Vermont they arrived here January 8th of 2018 and we're here for four days this is and so the most important piece is actually I'm glossing over we can tell which channels so hotels.com kayak what was the channel that grabbed that person and made that conversion that's how we want to invest this money is the channels where we're seeing the highest conversion rates are the places we will make the investments instead of just saying we're going to spend axon here and maybe it works and maybe it doesn't that needs to be we think a malleable a malleable effort we should be very very careful about privacy and resolution right, exactly ties into we're going to push you out of business before you start yeah we don't want your personal biographical information just in but that's just a number there is actually it's not true there is a point where we do when they engage with the relocation agent when they pull on the thread and they come to a thing from our website and they say I'm now signing up for the newsletter but it has to be a conscious effort we're grabbing your information but at the point we sign up they sign up we're going to look back at their trail to say how did you get here because we want to get other people to do the same thing so we've got to be very careful with what we cast with respect to privacy unless we want to stop this effort it does remind you that the state is one of the biggest users of the data that we're talking your goose is cooking and it just is making me think we should have legislators volunteering every weekend for every major ski area to ride the chair you don't need a ski that's right and talk to the language was that a good chair required for for kitty yes it was a good one for kitty those conversations are invaluable both for the intelligence that they gather but also just the engagement because that person well in this case it was a person that's already relocated here but imagine it's a person from Massachusetts who says I rode the chair lift with a senator from Vermont and here's what they told me and that becomes legendary so you know I think a program where we got a benefit of a ski ticket once a month would not be a bad thing so if you were to if you would have twice the amount of money appropriated for this 2.25 is there an element that jumps out of you that could use more of an infusion of dollars than others in this program I don't know that we would suggest investing more for the first year I think we've got it as close to right size as we can make it I'd have to go back and think about it but my initial reaction is I would invest more in in the other areas that are potentially barriers housing and broadband but we're going to invest in housing that's not to say next year we wouldn't if we execute this as framed we might find that in the first year we don't have to spend as much in recruitment because it's less expensive than we anticipated in which case we should make adjustments there and likewise if we find that it's a little more expensive than we anticipated we would come back and we know that we're very mindful about just not trying to blanketly grow programs in bureaucracy for the sake of growing the agency's budget if we want to talk more about the relocation of 500,000 on the VOL I know we have talked about it a little bit should we have is the commissioner the best version of that? Cross-section I believe of the commissioner Sarah Buxton those would be the starting points I think so in terms of the stay stay to stay four new weekends announced yesterday four new weekends announced yesterday so are we expanding the budget for that this year proposal? we don't have a budget for that right now or food strapping that out of our existing budget doesn't have a particular line item part of this million dollars would go to bolster the stay to stay weekends right now they're still in the four pilot communities our hope is to bring them statewide there's a there's a list of communities that are just waiting to deploy them and we just we don't have enough resources right now to do that so where are the four committees you've targeted? it's the same we'll report on that program yes right here 32% conversion rate in its initial pilot year with seven people moving to Vermont and nearly 40 more actively job the white paper that was part of the package but Wendy shared that with us we tried to make them short and succinct but it's still a lot of paper because it's not he's done a good job he's your benchmark there he'll tell you whether one page or one page I think you have I think you're the king of infographics for sure that would be Heather Heather is here Heather are you unleashed on other agencies or are you only at ACCB? well it's interesting ACCD tends to pilot these things and I don't know who to see and they'll say hey can I have that that's great because I'm going to encourage some other places to come okay Senator balance back I think we'll take a break yeah no I'm serious it's a good time to break unless you have things you want to add at this point on the group I think the time is perfect hello so we'll take a break until just did our best work here's what happened here's what happened here's what happened okay so we're just going to continue briefly with recruitment there was one who said I wanted to hear about dealing with the remote worker program there since January but apparently there are some tweaks that have been identified from the agency's perspective so we want to know what you're looking for and do you need legislation for it so in the current legislation it the qualifying expenses are defined as costs that are necessary to perform his or her employment duties remotely and so relocating to the state will never be considered something necessary for somebody to do their job so it would mean that nobody there would be nothing eligible so we have not implemented that way we've said cost incurred for moving to the state plus any of the following and we'd like to change that as soon as we possibly can just so that it makes practical sense I'm not sure I totally thought of that reason to put it like my lawyer had about it so I'm looking at what we're proposing I need to look at the way the legislation actually reads right now the new one the way actual most recent all of the existing the existing language the way so the way the existing language reads it says that you could be reimbursed for costs that you require for doing your job remotely and you legally think that coming here would never be a requirement to do your job remotely but but it also could be interpreted that if you do move your job here in order to do it effectively these things are required for you to do it effectively I'm not sure I agree with your interpretation but let's assume I do you're implementing it now to say that nobody can get repayment for a relocation expense or they have to have a relocation expense on something else I'm just suggesting an enhancement to the language would add some clarity okay but what are you doing how are you interpreting the statute now so right now the statute reads qualifying remote worker expenses means actual costs a new remote worker incurs for one or more of the following that are necessary to perform his or her employment duties and it mentions ABCD a being relocation to the state right and then computer software broadband membership we don't think anybody would be able that relocation to the state is necessary to perform his or her employment duties but your goal is to make that a reimbursable expense so what are you doing now in terms of if somebody claims one of those expenses that would be eligible relocation expenses would be eligible reimbursement you are interpreting it that would concern that that's correct you want to clear that up I don't think it's I don't think it's I don't think it's necessary it's not unnecessary it's certainly your discretion I know it's hard to believe multiple lawyers may differ on their interpretations to our defense to our defense there are many supreme court cases that say that when they interpret laws that the legislature would never pass a law that was meaningless so you're trying to say that putting that in there is inconsistent and meaningless and the court would say their intent was to cover this expense otherwise it would come to why would you put the words in there if you didn't want to do it so anyhow is the sky going to fall if you don't change the language? no we just want you to be we will look at it so I want to have Doug Farnham come up he's been waiting patiently on a narrow issue here he's been rewriting the tax code well he's got a whole new enforcement duty I don't Doug you can introduce yourself but we want to hear about the governor's proposal on land gains tax and specifically if any thought I'm interested if any thought was given to instead of totally eliminating shortening the period yes so for the record Doug Farnham policy director economist for the tax department and so to answer the first question of was any thought put into shortening the period of thought into different ways to modify the tax before repeal and shortening the repeal period shortening the holding period was one of the ideas we consider and sorry could you remind those of us to describe the land gains tax describe the whole land gain tax some of us have been lucky enough to be on raise and mains or whatever and from this committee's perspective one of the reasons that I think it should be a concern is the argument is we need to repeal it because people are not willing to rehab some houses because they feel like they have to pay this steep tax if they speculate and flip it and turn it over that's counter to some of our policies is we want some rehabilitation to be done so and could we do a carbab for that exact maybe I have to obliterate something I'll try to make that argument later but first the so the land gains tax was enacted in 1973 shortly after well several years after Act 250 was created at that point in time municipal zoning only existed in a couple of larger communities Act 250 was still it took several years at least to mature the the lore, the anecdotes that we've heard in talking to different members of the real estate community and conservation community is that one of the main motivators behind the creation of land gains tax was it was land speculation largely in southern Vermont and the activity of buying land from agricultural land from farmers or other people dividing it up into spaghetti lots 10 acre lots and selling it very quickly to make a profit which had the undesirable effect of raising property values on Vermont so part of the goal was to speculation not just to prevent fragmentation although that was a goal but also to prevent land from becoming unaffordable for long term residents of Vermont so that was the framework as described in the 1980 study done by a couple of PhDs that I reviewed prior to tackling how this tax would be modified or repealed and the time frame just for how long you have to hold the land before it's not subject to it right so the time frame is six years and the tax rate is determined by the holding period so basically less than a year less than six months scaling out to it's a progressive rate but on two different factors so it scales from 80 down to I believe 10% might be the lowest based on the percentage of gain above basis so whether it's 0 to 100 100 to 200 or over 200 and then the time period so if you're under six months and over 200% gain then you're looking for an 80% capture of the gain that is in addition to the capital gains that you would owe at the end of the year federally and for Vermont when you file your tax return so if you try to sell a property within six months and make that much gain mathematically you would end up owning more money than the gain originally existed as Does that gain apply in the event that there's a stock sale corporation owns a piece of land transfer of sells the shares in that corporation that is the owner to another corporation have they been exempt from that tax of virtue of taking stock transaction rather than the actual sale of the property so the land gains tax is hooked to the definitions used for property transfer tax which do not apply to situations that we call consider stock transactions controlling interest transactions there's a reporting requirement for large stock sales but it really just requires them to notify the department that happened and there's no specificity or enforcement authority on the quality of the data. Essentially it becomes a loophole but if I want to do this and evade that tax all I do is put it in the name of an S corporation sell the stock in the S corporation on it and tax it off. Right but for context the land the property transfer tax is about 40,000 or sorry 40 million a year 45 in the most recent year and land gains is 1.75 million In talking with members of the real estate community very few buyers very few people are aware of coming into a transaction ahead of time that they're going to hit and gain situation. So the question always comes up of is this impacting behavior is it a turning behavior and because they're not aware of it ahead of time it's unlikely that it's stopping them from coming into the market until they actually get into the nuts and bolts of a transaction and then the report from the attorneys has been this has killed many transactions once they started trying to work something out and then they figure out that either they have to wait if they own the property they have to wait hold it for four or five more years before they get into it. So you're not concerned that there's not collection because an attorney is involved in the closing and they're going to make sure that if there's something to go it's paid So yes there's always an attorney involved we believe that most of the attorneys understand and are complying with the law in this regard if they're not complying it's a lack of understanding and not an intent issue the the source of potential under-reporting would be the complexity of the tax itself and the number of exemptions in different situations which cause it to be exempt and then the attorney has to rely on the client reporting basis because this is a tax on the gain it has to be linked to the basis for the transaction and then properly qualifying that basis whether it's maintenance or improvement to the property is very difficult for most normal people to understand yes and that's where the Graze Deal complexity comes in is proper qualification under the federal rules because we link to the federal rules for what is what is the gain and what is an allowable write off against against your gain I'm sure not understanding my question it is possible to evade the tax by using so to directly answer your question if a property were to be transferred to new ownership through the stock sale process it would not be subject to the land gains tax because it's linked to transfer of title and then under our law it has an officially transferred ownership of the company corporation or LLC or partnership has transferred so anybody particularly a larger transaction to use a stock sale to evade both this and also the land gain tax they could but there are 2,500 land gains property transfer would be a greater concern there are 2,500 land gains from transactions a year compared to so property transfer and only 3 to 400 results in a taxable liability in land gains so it's not necessarily the amount of tax that is being transmitted for land gains it's the burden and the preparation that is the biggest hurdle and in the situations where the tax isn't being paid in 2,100 out of 2,500 cases a lot of those the buyer has to certify that they're going to move in for no liability to be assessed but they get a statement saying if you don't move in and occupy this as your principal residence you may owe up to 20 or 30 or 40,000 dollars the average amount of land gain tax when it is due is over 10,000 dollars so it can be a disincentive or frightening to someone and make them not want to buy and especially if they're planning to build a new home if their plans fall through and they can't build there is a chance that the department has done it where we have to send them a bill for over 10,000 dollars of land gains tax because they failed to build and occupy as they said they would so in return in response to Senator Brock's question in terms of property transfer tax which is a bigger issue do you think that's a fair situation where people can avoid the tax by just a sale by tax to stop transfer which I would add is a more likely situation than a large commercial transaction than the sale of a small home so neighboring states do have a slightly different structure to where if there's real property involved it doesn't matter whether it was linked to title or not that certainly applies more broadly and more equally to all transactions so I think from a policy perspective we are little bit inconsistent with neighboring states I think this does have to do with the fact that our definition behind the property transfer tax hasn't been updated in some time and just it was created before the structure of LLCs and partnerships was really it may have existed legally I don't think it existed legally but even if it did it wasn't really prevalent yet so it sounds like you wouldn't be averse to updating our definitions I think there are a lot of impacts to an update of that manner but from a basic tax policy perspective most of the material out there for different policy things would say it makes more sense for this to be applied to controlling interest is just to not hook it to just the transfer of title because that's an outdated concept that doesn't necessarily apply in all situations so just so the rest of the committee I've got a great co-sponsor in my bill that corrects this problem Senator Brock so now we have the administration on record supporting our bill we're just going to bring millions of dollars to the state I think one of the things though as part of this bill that I'm going back and looking at is large transfers particularly corporate transfers that involve the transfer of land through ownership of the corporation in recent years and I suspect around Vermont we've got some multi-million dollar issues of property transfer that have occurred in that fashion that's multi-million in terms of tax liability in terms of the value of the transfer but anyhow we digress this is an issue we'll probably take up in finance I think our bill was referred to the finance committee but going back to land gains I could go ahead no no after you my question is we have 1.8 million dollars that we're giving up getting rid of this tax if the primary goal is to allow for the renovation of properties is there a way to maintain the land gains tax on other elements that are now being taxed by the land gains tax and somehow exempt out the renovation improvement situations that probably will take place within one or two years of resale so the difficult thing in we looked at how to propose a revenue neutral structure but the problem that we encountered in that and I actually did most of the work personally so I guess I could say that when I looked at the actual transactions that were being charged they were exactly the type of transactions that we would talk about exempting so the situation where someone is taking agricultural land and reselling it and getting a gain I could not find a single example of that what I found were estate transfers that saw a step up in basis and then a gain above that and then they ended up paying corporate transactions within downtown districts or within developed areas I could not find in the top 40 sellers an instance where the money came from a payer that would have been considered a speculative transaction that we would be wanting to prevent until continued taxing so we looked at writing in an exemption to all village in downtown districts that's the first place in the mind we might go and it's very difficult to evaluate because our grand list is not currently linked very well to actually pinpoint where in Vermont physically that property in the grand list is we have a lot of work to do improving that data and we're working on it but PCI's been working on it for a number of years but our mapping in all of our designated villages in downtown is pretty clear on what's in and what's out I mean I'm barely clear in Woodstock where that is so my guess is every lister is pretty clear on where that is we have the overall mass but acquiring a list of spans to compare with the tax return filings is difficult at this point so we're working on evaluating those top transactions to see whether they fall in a downtown or village district at this point but it's hard to say for us right now we're struggling with that but evaluating the type of transaction if you were to excuse corporate to corporate transactions where nothing is changing in the nature of the property because that's one of the ideas we came across is that if there's no evidence of subdivision 87% of these transactions don't involve subdivision so basically zero change to the acreage or less than 0.1 change to the acreage meaning it was a minor minor adjustment and they're not chopping things up that would eliminate nearly all of the tax revenue allow putting in an exemption for downtown and village districts would eliminate nearly all of the revenue from what we're seeing right now so the ways that we would put in exemptions to make this logical and to make the right payers would result in a tax structure still existing but very very little tax revenue being generated and currently we spend 11 cents on the dollar to administer this tax and then that amount that we'd be spending to maintain that structure for the existing usually exempt filings would just would go up further where we might be spending more than we're collecting didn't you say earlier and there were a bunch of reasons you gave that the tax is sourced deals and acts as a deterrent so if we went through of the presenting Senator Clarkson said either downtowns or renovations or stuff like that even though it would eliminate a lot of the taxes that you're collecting now just having the tax on the books could that still prevent the kinds of transactions we're trying to prevent that we just don't see now and if you remove the tax entirely maybe those kinds of transactions that we don't like will start coming forward I know there are proponents that believe the deterrent value of having the tax on the books does create some value our argument is that municipal zoning is prevalent now and nearly every time and that act 250 combined with the municipal zoning is enough protection to prevent the type of activity that the tax was created to prevent in the first place from a revenue perspective this is just this is partially just an anecdote based on my experience with the property transfer and conversations with the community but if the removal of the land gains tax were to stimulate the economy in the real estate economy even by 5% that additional property transfer tax revenue would balance out the loss of land gains tax revenue I'm not claiming I can't provide evidence that that would happen but I think it's fairly reasonable that it might happen that a 5% increase in the number of transactions might occur especially for people that have been waiting in traveling around the state to talk to people from different counties there were several business owners that told us directly I'm just waiting for 3 years to build one of them was a piece of rental housing property that they're just waiting for 3 years to develop so they can sell it at the end of the 6 years to someone to manage that rental housing property that's needed in that town so it's just causing them to wait so that goes to work why couldn't they make an exemption for that yeah we could make it shorten up the time frame again if we made exemptions we would further complicate and change the administrative costs and if we exempt the type of behavior that we want to incentivize then we're likely to not receive any tax revenue from this yeah and I'm just struggling I don't mind that we don't receive tax revenue but I do mind that I guess I just not sure I see the harm in leaving it on the books even if it doesn't generate any tax revenue because it could have a prophylactic effect on people doing bad things that it was originally designed to stop you're saying that they don't exist anymore and you have zonalpal zoning taking care of it but what's the harm to having another protection the harm would be right now taxpayers that are buying and selling properties pay somewhere between $500,000 and a million dollars of preparation fees because of this tax and that's for them to transmit 1.7 million to us and that's based on conversations with attorneys who immediately add at least $200 to a transaction involving land gains but you said that with the exemptions we were talking about they're 100% of your of the fines but to claim an exemption to return and demonstrate the exemption so there are things we can administratively do and we actually held a lean event a continuous improvement event two weeks ago in the event that the legislation is not successful it's our preference to repeal and we think that would provide the most benefit to for monitors and the event that that's not desirable we are preparing ways to streamline administratively as well as a great suggestion this is a real pain to administer first of all that it raises very little money in the grand scheme of things that it's not really necessary because the conditions that put it in effect in the first place are no longer present and it does have a real cost to promoters if it costs promoters $500,000 or more in terms of preparation fees that's costing the economy money to produce but it makes no sense to keep something like that on the books that is yes yes except the one thing that's left out of that argument and I think it has to be debated is there may be actions that are being prevented right now that we don't know about that when we appeal the tax they may start coming forward you can think through what those actions, what those things might be I mean we always face in anything we do the law of unintended consequences but generally speaking when that happens it costs people money rather than otherwise around and we know right now we've got something that we can see in front of us in terms of cost so we're going to deal with this more probably in finance that the connection here was more towards I do want to see this go away to the extent it's preventing renovations of property so that's where I was coming from in this committee and I'm not unsympathetic to the thing that caught my attention as you were saying municipal zoning and all this other stuff has served as a replacement for things coming forward we don't need this tax we also have that protection so that's what I would like to hear more about and deal with it in finance those are the balances and it's an interesting discussion and I think the overlay also just to interconnect everything in this committee is that the short-term rental market is at least in my community exacerbating the purchasing properties that are considered affordable renovating and then reselling them that has happened a bit too and I'm much more supportive of trying to make it a more effective disincentive adding more enforcement or actually using all of your wonderful investigators to actually see how big the if there is an enforcement I know you looked at some of that but I'd rather shorten the time frame and or exempt designated downtowns and village centers rather than get rid of what I think is a disincentive to flipping but and fragmentation so I think we're not there yet in terms of getting all the information we're just having a half hour conversation and to come to I may be leading that way but I'm sure we haven't come to a decision yet and we're going to have Doug back in next week on short-term rentals and that is a concern that we're hearing nationwide I don't know how it applies to land game stacks but affordable housing is we're losing housing to these short-term rentals and I don't know if the land game stacks comes involved in that in any way but thank you there was more than I actually thought I just need to put one thing on the record absolutely related to S67 the controlling interest he's back it off I can't promise administrative support at this time I did say and I do believe that it makes good sense we trapped you rocks are up in connection so we're going to move on to VEPSI and the model training program I thought it would be useful to get sort of an update how those programs are faring and we still have to supply another member of the committee to that yes, yes comments last time Jane is desperate I'm sorry that you didn't get specific notice so if you don't have any handouts that's fine well maybe what we're going to do is go over the veggie proposed changes that's a good idea and that I think was sent it was in the original packet there's a description and a white paper and there's also some proposed language so it's in the white papers there's a white paper that'll describe the changes and there's also proposed language if not I could just say under here it is it's not the same language as we rejected last year is it? similar it's called try, try, try here it is it's the number two clip thing in your packets modernize the product is everybody having it? this is what we modernize is a word that we use also yes it is it's to acknowledge the changes this is community yeah here second mail they do they do should we do an overview first of veggie let's get up all that Megan take that away good morning my name is Megan Sullivan I am the five-month-in new executive director of veggie the Vermont Economic Progress Council speak in acronyms so I've been with veggie now for five months prior to this I was business liaison with Peter Welch's office for about seven years and before that I was working in economic development with the state so I have a career of working in economic development in Vermont and I appreciate the challenges and the opportunities that exist and I'm excited to be participating with veggie and with the agency of commerce in the state of Vermont to try and address some of the challenges as well as enhance some of the opportunities that are here for us so the Vermont Economic Progress Council was created by the General Assembly 25 years ago they just celebrated their 25th anniversary and administrative support is held through agency CD and that is I'm in a point of position executive director and there's one other employee who is a class high position with the department who is a grants program manager that's Adam Sherman who has previously 11 years experience as assistant town manager in back of Vermont so brings an incredible wealth of knowledge to our team and especially with our tech districts so there are nine council members who are appointed by the governor who are regional representatives to the vexing board and then there is a member from the house and a position for a member from the senate we'd love to have as soon as possible just to be clear even though we're on the record is it vacant or is one of our senators just not showing up it is vacant it doesn't have a chemical in it where did I hear senators with workforce development oh different one sorry so that position is appointed by the committee on committees for my understanding I'd be happy to provide information on what the duties of a council member are and what our meeting schedule is so as folks not be looking at what the opportunities are to fill that role if any of that background information would be helpful to provide it to the committee after this discussion we may get a volunteer visit okay so vexing administers two programs the vermont employment growth incentive known as veji as well as a tax increment financing program known as tiff so I think we're today we're focusing on veji veji was created out of a former incentive program the EATI program and I'm not sure what that's for anymore but it's been veji's been in place since 2007 so it's been a little over 10 years that we've had to see how the program works and it's an incentive to encourage business recruitment growth and expansion in vermont that is beyond organic growth of a business that's expected so looking at an industry what is the expected growth so beyond that and that wouldn't have otherwise a famous but for it's a performance based incentive so it's not used for financing it's not a grant that's learned based on targets that are set by the participant so to be eligible to participate the proposed economic activity which would be in the form of jobs new jobs to vermont in the form of payroll so new jobs that meet a certain wage special which I'll talk about and capital expenditure we're building a building, we're buying machinery looking at what is the benefit to the state so the benefit to the state has to exceed the cost to the state for potential growth and that is determined through an economic model remi model that was developed using remi developed by Jeff Carr when it was created these types of growth opportunities are run through the model to say what is the benefit to the state as well as what is the cost to the state so if you're adding jobs there's going to be more kids in the school there's going to be more aware on our roads so looking at that as a piece of this so the model takes that into account as long as the benefit to the state is greater than the cost and this is before any enhancements are considered they've met that first criteria houses, rehab all those benefits to the state the second is that the municipality welcomes the business so we're not going to incentivize the business to grow or to come to Vermont if the municipality says we want nothing to do with this so we require a letter from the municipality we welcome the business it has to conform with regional plans and this will work with regional development corporations and the regional planning commission to make sure that this is part of what that region wants as well it's not an limited local market so it's not giving an unfair advantage to one business over another so if you've got a widget A maker on this side of the road and a widget B maker on this side of the road we're not going to incentivize to grow if it's going to harm another Vermont business so that's what debt is an eligibility criteria and then the but for so the but for is this would not occur without the incentive or would occur in a significantly different manner with a significantly less desirable outcome to the state so that should be someone who might do a partial expansion of Vermont but it's going to be a full expansion elsewhere it could mean they're going to grow a few jobs but with an incentive they could really add more because they'd be able to throughout the years reduce under the costs or it could be that we're full stop we might come to Vermont but we're also being worked by these other states so we need to know what that would look like have you I assume you've seen the auditors report on this so the auditors report are the I've seen both I've seen the auditors report this year yes so in the auditors report there's a real indictment not necessarily but actually the nationwide about the but for tests and so could you explain a little bit more how you have confidence in the but for tests sure so I think Vermont this body when creating the statute really looked at that piece of what is our but for statement and that's critical because there isn't an appropriation for veggie because this is based on the idea that this is new revenue to the state and some states that do have a but for clause they just say okay we need a statement that says but for this we wouldn't do that that's your buyers back documentation so so you've you've made the statement saying but for this incentive you wouldn't grow here we've grown in a different manner on top of that we want to say what if what if those other conversations that you have been we need to see documentation that you really have looked elsewhere we want to see the financials of what it would look like if you were to grow smaller and what it would look like here so we do require additional information and I can I can provide the committee with sort of our sheet that we provide applicants which is three pages long of here's how the but for is considered so there's an initial conversation with staff when someone is looking at this incentive where we might see a lot of drama because folks are saying really excited to grow in Vermont I'm going to add these jobs what can you do for me it's like well it sounds like you're already going to do this it doesn't matter what we're going to do for you you're going to do it anyways so some folks are out at that stage and we're working on really tracking that moving forward I was going to ask if you have any documentation of denying claims based upon the but for testing so we have studying how they succeed we've had some staff turn over so it's not I think that's certainly a goal of mine is to look at that and to really quantify especially because in that inquiry stage we don't have any they haven't filled out a formal application yeah I just want to interject like sometimes this all gets kind of referred to the RDC network right so then the business talks to the RDC and they describe veggie and then they're like forget it you know they may hear about it and I'm not going to go for it we're not tracking how many of those are saying no right at the get go or others who go through the preliminary veggie and find out that the dollar amount that they could possibly go for is so small that they couldn't possibly make a case that but for this that would go on we will go forward and track that a little bit better because what it looks like is that people who go through veggie actually end up getting it because it is such an onerous process there is a smaller subset that goes through it and we had seven has there ever been someone who has gone through the whole process and been denied there have been folks who are denied now you know so there is the council is going to review criteria and there are folks who are coming in and saying that this is I mean those obvious but for should be not get to the point of there being reviewed by the bouncer there are higher applications but there are some cases where folks have said we are going to grow exponentially this amount and they file their initial application and they are approved and then between the initial application and the final application when they had the opportunity to say we are going to start our project and then they say well actually we are not going to grow like that that is where we had folks be denied where they revised those numbers but you don't need this incentive to grow those amount of jobs anymore so we had instances where that has happened I think we had 13 initial applications go through the program last year 13 initial applications we approved last year 7 approved as final some folks deferred until this year there are 21,000 businesses in Vermont so there are plenty of businesses who are growing without Veggie the threshold to participate in Veggie is high and I think if you look at that number of the statistics that were provided that only a certain percentage can meet the but for we are only incentivizing a very small percentage of Vermont business growth so I am happy to continue to look at that data do we have programs in Vermont that are analogous in any way to Veggie for small businesses there is a complaint I keep hearing there is a Veggie process you got to be pretty sophisticated you got to be pretty big you got to have the capacity on your staff to do it, to apply so part of what we are offering here as a proposal for modernizing is to have an enhancement for small business to make this a little more more effective and this would match our green Veggie enhancement right and I think part of this is going to be a legislative fix part of it is also an image that we do have a high percentage of businesses who aren't large who are applying and participating in the program I think 22% are 22% of our 124 that have gone through the program so far have been under 20 employees can you say that one more time we've had 124 businesses who have participated in the program in the 10 years and it's a 9 year program so it takes a long time to complete and of those 124 businesses 22 had under 20 employees at the time of application maybe about a 9 year program so we're incentivizing and businesses are saying here's what our projection is up to 5 years that is paid out each year over the course of 5 years so a business would create their target one jobs and payroll and capital expenditures and would have to create that and then maintain that for 5 years to get those 5 installments for that first year year 2 on top of year 1 they have to create and maintain those jobs for year 2 and year 1 that gets paid out over 5 years so by the 5th year of targets that 5th year will be paid out year 5 so someone who applied but is that just after the 5th year that just ministerial they're entitled to at that point it's just a question when they get the money if they do not maintain those jobs they will not get paid out so it is administratively intensive I remember talking with a company that is in the veggie program and one of their comments was that it is more difficult to pull out the annual reporting for veggie than it is to do their income taxes is that your experience we've talked with the tax department about that so Debsi has the role of authorizing participation they have talked to us about how we can streamline it so this is a program veggie is a real partnership between Debsi and with the tax department it's a real partnership because we authorize and then the tax department has stayed employed over the year one employee who individually reviews all of the claims that come in against a company's W-2s and it is intensive and he is an incredibly hard worker and has been a great partner as I've come up to speed here but there is some ideas on how we can streamline this process to make it more integrated with what a company is already providing let me ask you a question so Megan how many new how many jobs have we incented through this program and what is the economic impact that you would say those jobs have had I think that should be on your infographic oh is it on the annual report okay well I don't have the annual report my infographic is buried big surprise now it's here it's just a question funny so what is it because in the 11th year we it just looks down how many jobs we've created as a result of this and what the cost per job has been to create and how where are we the infographic may have this year's information on it and projected for the current employees I I can get we can get we have that that's why but I can get I can get our annual report our annual report should have that and we have done a lot of work to get our annual report back to what is required in the annual report so that it was a little bit more readable I'll just stay I pulled it up thank you new qualifying jobs this is from the inception of it to December 31st 2016 because there is a lag the new qualifying jobs created was 6216 and the new jobs both direct and indirect were 8,855 new payroll created 368 million in change I'll just round up the average wage of $59,000 qualifying capital investments $829 million and the net revenue benefit to the states $38,866 and what would so we have data through 2016 finalized because it is submitted through a claim to the tax department and then we get those finalized numbers when that full year has been put to you so right now we have through 2016 and then we'll be getting through 2017 when the 2017 claims have all been approved so John the 368 million was the economic impact with the new jobs out of the associated jobs average advantage was the new qualifying payroll created qualifying meaning it has to meet that minimum wage threshold right many of these create economic activity even if they're not getting a veggie thank you so do you want to go through the changes or do you want more background no that sounds good let's go through the changes that's attached the new language so in addition to the other veggie incentive there are a few enhancements that currently exist I think the first few years of going through this program there was a realization that there was a high concentration in our high growth areas and that meant that we weren't incentivizing growth in the rest of the state so how do we do that and that's where LMA enhancement was created to say if you're growing in a department of labor identified LMA we're going to enhance your veggie award for up to 100% of benefit and the wage threshold is lower so instead of 160% of minimum wage it's 140% of minimum wage that in our economically disadvantaged areas we did a few years ago so that exists currently as well as a green veggie enhancement and this is an enhancement to grow jobs in the green industry so that can go up to 90% and then it brings the background growth rate so that is looking at what is expected in the industry and that looks at backgrounds at a 20% level and we're saying that these are important jobs and how do we incentivize businesses who might want to grow in that area to do so because these are types so that's current, that's in place but you're suggesting even going further down that's clean water and all sorts of small business and water percentage of the minimum wage you said you were so currently the way that the wage threshold is currently determined is based on minimum wage it's 160% outside of the L.A. so in Washington some other areas in the state and I can get you that list so the current wage threshold in those areas is $17 and 25 cents an hour that doesn't include benefits so three benefits in addition to that wage requirement and in L.A. it's 140% which is $15.09 an hour I think but you're suggesting changing that I'm just asking looking at a potential for where is it I think it's right at the top there's page numbers here page are you in the bill itself the draft language so under 3331 definitions wage threshold that's where we put in the changes skipping around here so 1725 hourly 3331 it's I don't have that section I don't have it page is 1312 and it goes from 3330 to 3333 so maybe we don't have the latest version of this is it called something I just called veggie modernization draft language the salary enhanced for this you have small business I see it it's at page 11 I think it's fairly further it's at 3335 what's the date on it oh yeah this is the older this isn't the most recent so here it is on page 11 and 12 and the definition you're right says 3334 so we wouldn't want to drop what is currently required but we also want to acknowledge that at a $15 wage the wage threshold for veggie would be $24 an hour or $21 an hour and if our goal is to have this work in rural areas and have small businesses participate that can be a real barrier now as we're incentivizing jobs jobs with higher wages are incentivized more so it's not saying that we're going to incentivize a job that's paying $17.25 an hour the same way we would incentivize a job that's paying $24 an hour but we're also not going to create a barrier to entry so just we don't have to dwell on this right now this will obviously be a controversy but are you making this change contingent upon us passing a $15 wage you mentioned a $15 wage I think that was the impetus but I also we wanted to reach some sort of corresponding to the Vermont training program we currently peg that to the JFO liveable wage so we thought why not we have the same here except that we put the $17 in so that we weren't going lower than what some of the current recipients are having to target part of the original thinking to do this in anticipation of an increase in the minimum wage I hope that we pass the minimum wage before we pick them back to this on the other hand we appreciate the administration the support of raising the minimum wage and pegging new things to it I think what I'm saying is that we want to make sure many continues to work for small businesses and for the rural area acknowledging that the incentive doesn't work isn't going to provide the same level incentive for a job at JFO's local wage that wage won't incentivize the same way as a higher one does but that people don't see that as a factor of well I'm not going to So why do we have a specific I thought it was much better just having it be a percent so if it's a hundred if one car is a hundred and sixty percent of minimum wage it just floats with whatever the minimum wage I think we have a dollar in here because that's what the current the current threshold is so we don't want to say we're going to move to level wage today and have that drop down to what right but it doesn't what I guess what I'm trying to say is whenever you say a percent above the minimum wage it'll always float with whatever the minimum wage is no matter what we in we just don't want the threshold you don't want it to be below we would just disqualify we would disqualify so many you'd have to pay how much twenty four dollars an hour I think center class raises a really good point I mean this my understanding of the law training program this is the wage is yet another element of trying to produce other social policies if we're giving out money and help businesses we want them to be poster childs for a good policy whether we do it for B corporations or whether we do it in certain locations and self-preferences we don't want to raise to the bottom on the wage as an incentive for people to get this money so to leave a fixed number to stagnate in there while the rest of the economy lets it out but it would actually track the livable wage we just put that dollar amount in there to handle this in between time of people who are currently in the program that is the reason why it's there but it really would track the livable wage which we would assume would get adjusted but we're not sadly I wish we were we're contemplating a minimum wage but it's not yet I mean for as we know there's a discussion between basic needs so let's keep going on the line with any other so we've added a few enhancements we talked about small business enhancement which would incentivize the enhancement for businesses that are at the time of application have 0 to 19 employees and what is the enhancement for a greater grant yes and how does that is it specified what the extra enhancement is is it double so it calculates at 90% instead of 80% so the current regular value calculates at 80% so this would be at 90% and it would be at 20% of background growth rate so taking out some of that background growth rate when you're looking at background growth rate which is determined by NAICS code Vermont's business size what we consider a small business is not what others may consider a small business under so our do our small businesses grow at the rate that a larger business is growing at that rate so in the same way that we did with Green Veggie this business sector this small business is really where Vermont rides and this is where where our growth comes from so bringing that background growth rate down in the way that we do with Green Veggie I think I know enough about how this program works to be dangerous it's very difficult to visualize this in practical terms and again on that one page it would be great to see an infographic that takes one or two specific examples to show what do they have to commit to what do they have to deliver and what do they get when they do and when so that we can see this in effect in a real life example I know I'm not so when I can oh that's a great one so this is how this is a sample of somebody's pace payout over the nine years so saying what's being created what is the background growth rate what's the benefit to the state and what's the total incentive now there's the maximum incentive so we're going to create all of our jobs January 1st of the year the state is going to get them the maximum benefit for the people here or more likely and then how is that paid out over the life of the incentive so this is obviously very small we can provide some delay but it gives the picture of what is the business looking at for the incentive and how will that be they have to meet the target the number of jobs, the dollar value payroll and the cat-ex before they even get that little fractional I'm trying to be able to see an example but it just would give me a sense by looking at something practical what's the return on investment to the state for doing this and how can we see it visually whether through figures or whatever in a way that we can understand I think it is a very complicated program so we want to be able to provide information that gets you what you need without and I think this is where we have some trouble is when it's reported in the media that jobs are created and then they're paying this money and then the jobs leave it's much more complicated than that we want to provide you the information without using some of the critical details on how that will be done so I can get you a few pieces that I have now and if that's where we're talking about the process that we're trying to help visualize what the process of company goes through is and what goes into the determinations that are made so we can provide you what we have and then work on how do we provide more what you need for that so the enhanced veggie for the small business was to me exactly that critique that we had heard that it's too difficult for small business they don't have to see a vote and do all this reporting and this would be an attempt to make the enhancement much more worth the time and the effort expended that same enhancement would go for mission based businesses what else mission based so they would have to be registered as an L3C or a benefit corporation so these are corporations that in their business model have a triple bottom line we are not only looking at growing our profit but we're looking at how are we supporting our employees in the community Vermont was the first state to create the L3C kind of that's what L3C is I know what benefit corporations are but L3C is actually a low life low profit it's a low low profit no it's alright there's only one of those yeah it's all name it was just low profit yeah I don't know what it stands for low low liability low liability Vermont was the second state to have a benefit corporation registration option and since then other states and how many do we have now the most per capita but other states have followed suit so we're no longer leading the efforts to recruit these businesses this enhancement would be the first of its kind and I think it would be a really advantageous way for us to continue to grow this type of business and I think by doing this as an enhancement we're not picking winners and losers in the economy but saying that this is part of who Vermont is and this is who we would give an enhancement to part of what we hear from small businesses too is 9 year payout is tough I mean that's I need capital earlier to be able to do what I need to do to make the business successful so one change we have in here is an option for business to say instead of for each year getting picked out of our 5 years we're going to give them a lump sum for that year's goals if they're met year 1 and there would be a stronger recapture than there currently is for folks who will take that over a 5 year installment period because they'll still be required to report on their maintenance of those but and then in year 2 and year 3 and this in part was to recognize that there was a program created by Betty which is a veggie enhanced training initiative so an acronym within the acronym is always a little bit of a red flag and it was created with great intentions of saying that small businesses, start-up businesses have intense training needs at the beginning of their life cycle that's harder for them to finance than maybe folks who have a longer history so can we front load some of their incentive to help cover some of their training provided in the Vermont training program so it was a great idea but it hasn't run out of some great practice but so it's funded through training it's always funded through the training program that's why John is still here okay but so explain to me how it's invested in so if someone is participating in veggie so they'll be signing up and they'll check a box saying we want to participate in the Vermont, the veggie enhanced training initiative and then would say we'll go to John or I would let John know that this company has signed up for Betty so what does Betty stand for? Betty enhanced training initiative with that teeth that teeth so for those companies participating instead of paying up to 50% of the wages the training program would cover up to 75% of the wages and in theory that extra 25% would come out of their incentive so it's front loading their ability to do the training the statute has some language that is made that difficult to administer because in places it says pay 25% back to the training program because the training program is paid that but also pay 25% back to the business so it's not clear as it stands now I think another issue is if the training program is on a rolling basis that you're paying out after folks have done training veggie is done based on the tax calendar year if you have hired 9 people and you target those 10 people you may have already gotten that 75% for training but you're not going to get paid it would be a claimed delay with veggie because you didn't meet your target so what does that mean for the training program? of those employers never earning their veggie so to avoid that to still get to the same result of saying we understand that the businesses may need this sooner have that as an option for veggie participants to say you can choose to get the lump sum for your year one goals in year one and if you don't maintain then we're going to recapture that lump sum as opposed to we just won't pay you your next installment get rid of that altogether if I could add to that from the training program I'm sorry John Young director of the Vermont training program there's nothing that does not allow the training program to run concurrently with their veggie application has is so there's nothing to say that we potentially couldn't help out with up to 50% of the wages during their their first year of veggie either or whatever year that they're choosing the training program so the incentive from the training program is still going to be there just not that extra 25% is that the only training program or veggie related training program that's on the table at this point that changes do you have any changes just for the Vermont training program do you think we're at a good stopping point for I wanted to make sure we covered one more thing which was the LMA cap currently have it capped at a million and we're just wondering why that is like is there a need to have a cap overall cap of 10 million and the idea would be don't we want to encourage growth in those areas that have higher unemployment than the rest of the state are we coming close to the million dollar cap now yes very uncomfortably close like one company backed out at the end of last year and that made us okay otherwise we're going to have to do a whole joint fiscal committee to come and raise the cap at the same time you're not coming close to the overall no like we're midway right 5 million a ballot like midway between the 10 million for the year but how interesting that it is actually in such high demand in the areas we've targeted maybe we should be shifting whatever's left elsewhere well that's what the glazes the cap eliminate the cap and then we have no can we hear about the program in the last 10 minutes is that okay commissioners yeah I think that's great thank you Megan and welcome aboard thank you good job I support with my dear friend Sarah Callaghan I haven't talked to her but she is taking some job with some senator in Maryland no idea what she's actually chosen she was my favorite that's good to be I met her when she was three months old good morning my name is John Young and I direct the Vermont training program I'm a classified employee with the state of Vermont I've been a state employee for about 14 and a half years three and a half which is with the training program and a past layoff of IBM and Essex I was an engineering technician there that chose to stay in the state I live in Maryland their laws are gay there you go that's a hopeful so I'm not sure folks are familiar with the Vermont training program but it's a workforce development program that the state basically partners with employers to upskill their employees so there to be an employee can be an incumbent employee can be a new employee but there has to be you know a contract of employment there with that so in our statutory language there was some suggestion of pre-employment that's always a dicey area for us to get into so we somewhat try to stay away from that but that's DOL DOL certainly does a lot of pre-employment work but I think that's been in that language for quite some time three and a half years we've never funded any pre-employment stuff the only caveat on that is just the carve-out that you did a couple of years ago we carved out a portion of the training program to help pay for talent pipeline development activities like things where schools are developing work-based learning programs and the employer is helping them and the employer is spending time on it on a one-time basis or it's on-going? we have that on-going I think it's 10% it's not as subscribed to as he thought it was initially 10% of what? of the year we have a year which is $1.2 million so roughly $120,000 and we've never hit that cap of $120,000 you have? I have not in a year's time it's sort of like a grant program so I know my time is short here but I can certainly explain another time in much more detail of how that works as well as the regular training program let's focus on the regular training program so I do you have questions? we always have we're restraining ourselves so I'm proud to say that I have a mighty staff of .5 so there's .5 of us I visit between 150 and 200 employers a year around the state of Vermont and I travel between 35,000 and 40,000 miles a year around the state that's even more than us in our campaign so I feel fortunate because I get to sit in in manufacturing facilities and healthcare and a number of sectors to talk about the pain points for our employers and to hopefully help them sort of figure out what their future needs are and you would be amazed that we talk about the fears of high taxes for employers and Vermont's not always the friendliest I believe workforce worries and concerns are even surpassed the other worries that they have currently succession planning just isn't there succession planning isn't with state employees either so it's a scary proposition currently we have 65 grants open in application an employer can have a grant that we can run as Megan said earlier we're on a rolling basis so if somebody gets a grant approved in January 5th of 2019 the grant activity can run into 2020 we also have 5 current active applications that we work with sometimes on a daily basis so I call myself more of a head juggler because if you can imagine we have grants exiting and entering at all times what's the range of the grants this is going to be anecdotal it's in my report but I think our probably lowest the last fiscal year $270 and I think our largest was $270 $277,000 they can repeat right a company can have more than one grant potentially so that was certainly a critique of the auditor a couple years back and we have provided information to them on who has been a repeater so I think within the last three years we've only had one or two grants that were repeated by employers and we're really looking for something that's extraordinary one of these grants they doubled their staff in that time so I believe our feelings were with something like that shame on the state if they're not willing to participate and help them out if possible if there is really rapid growth in this particular overall $40,000 to $50,000 position so very rarely do we see a back-to-back grant from a business we may see back-to-back grants within a year or even multiple years from a training provider who is offering training to a multiple of companies like Jerry high tech or Cal so we'll have to go up in a couple of minutes hear the bells so you pick what you want to tell us sure I think again there's more I'm seeing probably the last two years more pressure on the players sort of screening for help we do not recruit employers for the remote training program we hear from our regional development partners a lot of them will reach out and talk with us so I think for the first time in quite a few years there's a potential that we're going to be fully subscribed to the program by Aprilish so what that means to the staff is if I do get fully subscribed we can't take a vacation at that point with that the uniqueness of the training program is that we're asking employers to predict their activity what their workforce development needs are where are their Oaks, where are their one of the kinds where are they going to lose these employees and so we ask for a crystal ball and I always say recognizing it's probably more like a snow globe it's snowing sometimes on my prediction because we're asking for that year's worth of activity there we also need to be able to amend that activity and current within that so we're amending grants based upon activity it goes through our review process very very rarely only on a couple occasions that we've actually added money to the grant typically it's just a training I didn't like this training provider or all of a sudden we thought our manufacturing was going to be loaded in this direction but now it's loaded in an opposite direction so I have to change some of my activities that I need to accomplish Is there any preferential guidance for who gets the money and then we talk about the lack of matching jobs to needs I mean are there industries that are favored at all so part of our SEDS has sort of our sectors that we're going to support Statutorily I believe the language changed four or five years ago put me on the four or five years ago to be open to all sectors I think originally was primarily manufacturing or production so we're seeing a lot more trades we're seeing a lot more we just did a really neat grant with Green Mountain Transit who could not find bus drivers or bus mechanics who have hired on a number of new Americans and we actually they hit our wages training that was specific to CDL mechanics That's a great place to end I was in Burlington for a meeting with like 15 employers that do new American training and hiring and that's a real ripe area for workforce recruitment so I'm glad to hear that you're doing that and maybe we could look at somehow that Will you update us on that meeting? We also have a partnership with adult tech center in Bennington that's a great model that I'd love to share that I think we should do Yeah, I think