Vermont Legislature SmartTranscripts:

[Senator Ann Cummings (Chair)]: We are alive. We are alive, and we are back. We're than I anticipated. But I've I've least one member was a Zoom meeting, so we're trying to get us moving along. Today we are going we are looking at the Vermont Economic Growth Incentive Programs. We have had a walk through on this one, and we have Frank Coffey here, which is a witness. Frank, welcome.

[Frank Cioffi, President, Greater Burlington Industrial Corporation (GBIC)]: Thank you, Senator.

[Senator Ann Cummings (Chair)]: So just introduce yourselves to the record and

[Senator Scott Beck (Member)]: the floor

[Frank Cioffi, President, Greater Burlington Industrial Corporation (GBIC)]: is Okay. Can you hear me okay? This Okay. All right. Thanks so much. Thanks, Senator Cummings. Really appreciate. Great to see you, I apologize that I'm not there. I've got a a 12 year old who's autistic, so I have to pick him up at school. So I I apologize. My name is Frank Coffee, and I work for GBIC, which is the Greater Burlington Industrial Corp. As you all probably know, Vermont has 14 counties, but we have 12 regions for economic development and then for land use planning and transportation planning. So we have 12 regional planning commissions and we have 12 regional development corporations. GBIC is one of the regional development corporations and we are the well, I think we're tied with Brattleboro Development Credit. The oldest one in the state is Rutland, and Rutland was formed in 1948, and GBIC and Brattleboro Development Credit were formed in 1954. So we've been around. We were the first three before governor Salmon and governor Snelling rounded them out to being 14. So we we do the economic development programs and services for the state of Vermont. We work with the agency of commerce and the department of economic development. So we're kind of the state's eyes and ears on the ground and the ones that are out there working with key employers. We primarily work with employers that have the profile of being dollar importing goods and services exporting. So if you make a product or you add value to a product or if you perform a service or add value to a service, then take that product or service and export that or deal with people outside of Vermont as customers and bring the first dollar into the Vermont economy, then you're an employer that forms the economic base. You bring dollar 1 into the state of Vermont before it starts to multiply. So to give you an idea, Chittenden County probably has a 111,000 people in our market area, labor market area, and we in migrate about 26,000 people a day from other counties, and we out migrate around 9,900 to Washington County and and to Franklin County, Lemoyle County, Addison County. So we do in migrate now out migrate as well. So it's a it's a pretty dynamic economy With with the 111 employees, there's about 8,800 businesses or employers in Chittenden County, and they employ the 111,000. We are micro focused on about 300 employers who employ 40,000 Vermonters, and they are the dollar importing business services exporting employers. So they're they're the ones that form the economic base and GBIC recruited IBM brought IBM into Vermont and we've led in the recruitment of a number of other companies. We help grow Burton Snowboards. We brought Jake out of a garage in Manchester and and helped him really start that industry right here in Vermont and numerous others. We work in partnership with with all the other regional development corporations, with the governor's administration. No matter who the governor is, we're apolitical. We do not make political contributions and and really work with with everyone. My background is I grew up in I live in South Burlington now as my primary residence, so my little boy can go to school in the South Burlington special education program for autism. But my home is Saint Albans. I I'm a native of Saint Albans. I still have a home there. And I worked in the family's real estate business, and I did a couple years. I ran Franklin County Industrial Development when I was in my early twenties and took it from being being called target area development to Franklin County Industrial Development Corp. Then I went from there to join my friend Howard Dean, became governor, and I served governor Dean for three years as one of his commissioners of economic development. So during during that time, senator Cummings will will remember we we brought forward the first tax increment financing concepts and also the first economic incentives pretty much in modern times. So we brought the economic advancement tax credits. Those that was the initial program for economic incentives. And then over time, a lot of people didn't understand tax credits, and tax credits really weren't meaningful to to companies in in the two thousands because a lot of companies were not profitable so that they weren't able to utilize the Vermont corporate income tax credits. So senator Cummings, senator Lousy, and some other leaders in the senate helped the governor at the time work pull together Tom Covet, Jeff Carr, and then a policy analyst in the administration named Michael Wasser. And those three gentlemen were the people that came up with the idea for VEGI, the Vermont Employment Growth Incentives. And myself and Dan Smith, who now heads the Vermont Community Foundation, and and a few other folks worked with with that team led by senator Cummings, senator Lucy, and others to to write Veggie. And what we were trying to do was to have a cash incentive that grew employment in Vermont. The primary driver was to grow jobs, grow new jobs in significant industries that were going to make that were gonna employ people at higher wages and that were gonna make investments in capital investments and in people. And the one thing that that Jeff Carr and Tom Caledonia and Mike Wasser did was they made sure that the state of Vermont makes money on the program immediately. And so if you're if you're applying for a veggie award, you have the but for condition, which is a bit subjective. But it it's been a real moneymaker for the state of Vermont, and it's grown huge amounts of capital investment around the state. And it's and it's helped grow a lot of jobs in this state as well. I since the pandemic, the program has not been as active as we would have liked it to be because a lot of companies were in uncertain times during the pandemic. We're starting to come out now into an era where companies are once again looking at investments and capital investments. And I can tell you, we really need an economic incentive program because we do not compete well with with other states. And we're almost senator Brock will probably understand this really well as he's been a student of economics forever. And but we're we're almost in a period like the nineties where multinational corporations are looking at where they are located, and they're taking another look at where it is best to make investments. So we recently, in Chittenden County, lost an expansion to Michigan because the the prices of real estate were about a third of what the prices are here. So the price per square foot that a company could lease or occupy or, you know, buy a place because they have so much inventory in the Midwest and the industrial states. I will say that the companies are looking at The US again in in making investments. There's incredible automation going in. So when you're looking at the manufacturing sector or technology sectors in the state of Vermont, the companies here are the best of the best. So you're not gonna be in manufacturing or technology and have a really low price product, you're going to be at the higher end of the value chain if you're producing from Vermont or anywhere in the Northeast. It's just, it's more expensive to operate here. It's winter five months a year. And so, you know, we have higher overhead costs here and we're a little bit further from global markets, but we have an incredible workforce in the state of Vermont, and that's always been an advantage. So I would just like to thank you for this opportunity and tell you that we are very supportive of s two twenty five that would remove the the sunset on the veggie incentive. This, I can tell you from from the front lines of economic development, we very much need economic incentives and having this sunset come up every two years really adds a level of uncertainty and unpredictability to any employers that are here. And it kind of sends a message that Vermont is tentative about employers making investments here in the state of Vermont, investments in people and capital, and we're in a really competitive environment. So this would really, really help. And I think I've said enough, I'm happy to take any questions. And the last thing I wanna say is, and I should have led with this, thank each one of you for your service to the state of Vermont. I know from my three years serving as economic development commissioner, how much time you spend away from your families and in your communities and having a citizen legislature and doing what each one of you do is greatly appreciated by all of us for Monarch. So thank you.

[Senator Ann Cummings (Chair)]: Okay, thank you. Any questions?

[Senator Randy Brock (Member)]: No. I certainly know how hard Frank has worked in the economic development area over many, many, many years. Been around this particular program, as you know, for many years. It's done some wonders in particular what it's done for St. Albans in particular is very, very obvious to anybody who's been there fifteen years ago compared to now. And the work that we've done in this area and the veggie program. But beyond that, beyond the amount of time that we spend every two or three years depending upon what it is, we waste such a horrendous amount of legislative time doing the same thing over and over again. And we've done this enough. I think that we've proven that this is something that works. And if we don't like it, we can always repeal it. But the notion of reviewing it constantly makes no sense.

[Senator Ann Cummings (Chair)]: I'm not seeing any questions, Frank. Thank you.

[Frank Cioffi, President, Greater Burlington Industrial Corporation (GBIC)]: Okay. Thank you all. Have a great day. I really appreciate your time.

[Senator Scott Beck (Member)]: Have nice weekend.

[Frank Cioffi, President, Greater Burlington Industrial Corporation (GBIC)]: Thank you.

[Senator Ann Cummings (Chair)]: Okay. My agenda again. Senator Beck. Yes. Next.

[Senator Scott Beck (Member)]: Alright. I'll be brief. I think I believe Kirby's scheduled to walk you through the lane Tomorrow. Tomorrow. Okay. So what I've I've got here is WiLAN, which is a major manufacturer in St. John's Murray, Northeast, Keenan. What do they do? They make the cellulose, the board that goes inside of transformers and really big ones. They're part of the electrical revolution that's going on. They're an international company. Anyhow, they've been at St. John's Bridge since 1970. In 2012, they did a, they basically, brought in a whole new press and part of their factory, which basically solidified their presence for the next four years. Their technology was going away, and they had to do this

[Senator Ann Cummings (Chair)]: Committee did some work.

[Senator Scott Beck (Member)]: Yeah. They had to do a new press, a new fabrication, new building, everything to, solidify their presence in Vermont for the next thirty, forty years. And, this is before my time in legislature. I know senator Ketchel was very involved in and came through. I think They put

[Senator Ann Cummings (Chair)]: together through in the appropriations bill. Right.

[Senator Scott Beck (Member)]: They put together a manufacturing tax credits that Weiden became a part of. I don't know if anybody else became a part of it, but I think they're the last people that were a part of it. And what they have is they have a as part of that deal, they have a tax credit, but the tax credit was set against the Vermont state income tax liability, and they don't have any way to use it. And they still have a chunk of about 3 and a half million dollars that they have not been able to use. It expires in 2026, so time is is running out. It was 2024, but it was extended

[Senator Ann Cummings (Chair)]: some So we're Vermont, we altered the corporate tax

[Senator Scott Beck (Member)]: Yes.

[Senator Ann Cummings (Chair)]: To help businesses that are located in Vermont They're selling. Inadvertently.

[Senator Scott Beck (Member)]: Yeah, they don't have any so what I proposed here is to make that tax credit that they have to make it refundable at no more than $500,000 a year out till, like, 2034 is in the bill and so that they can use that tax credit. It would not be I I put the effective date of 07/01/2027 because I did not want it to affect the corporate income tax revenue for this year and the budget conversation that's going on, so it would not begin until till the next the next, budget year. Okay. And that's effectively what the what the bill does. It just makes it refundable, at at no more than $500,000 a year until they can use the credit and then it just all goes away. And we will have Kirby will go through the land project.

[Senator Ann Cummings (Chair)]: Yeah. Yeah. Great fiscal. Yep. This is the only company that it's

[Senator Scott Beck (Member)]: I believe so. It's it's billed as

[Senator Ann Cummings (Chair)]: It was done Yeah. For this company because they were trying Yeah. To it was an international competition,

[Senator Scott Beck (Member)]: as I

[Senator Ann Cummings (Chair)]: remember, or they were they were gonna redo a factory somewhere in the world, and Vermont was one of them. If we didn't get a rehab, the chance that the company would stay here was minimal because whatever we were doing wasn't moving into the modern world.

[Senator Scott Beck (Member)]: Yeah. They did the project and part of the thing was they projected an employment increase of 75 people. They did that. They did that. They built the factory. In fact, there has nothing to do with this, but they're undergoing another expansion right now. They're actually gonna be the center for transformer excellence for the entire This company owns like 85% of the ore manufacturing in the world. They're a Swiss Swiss corporation. Yeah. They're Swiss so they've they'll their appointment's gonna go up to three, I think, three seventy five for this next one. So they they've done the projects and added the people who said they were gonna Yeah.

[Senator Ann Cummings (Chair)]: So who will see? Washington. You should hear from? Talk to Well, I can Anybody in economic development? Or

[Senator Scott Beck (Member)]: Yeah. I can the person that I worked last year retired, Brett Brett Long. I'll find out who's replacing him. Tim Terry might be able to come in and talk to

[Senator Ann Cummings (Chair)]: us about Okay. If you can find out.

[Senator Scott Beck (Member)]: Yeah. Tim might be able to come

[Senator Ann Cummings (Chair)]: If the company wants to get to

[Senator Randy Brock (Member)]: the car.

[Senator Scott Beck (Member)]: I could get their CFO, Carol Martine, to come to Zoom in or come over or something, but yeah.

[Senator Ann Cummings (Chair)]: This was similar to we've done a few bills for an unnamed wood products company in The Kingdom. These we have a few companies that provide a lot of good paying jobs in sections of this state that don't have a lot of good paying jobs. And we've tried to The

[Senator Scott Beck (Member)]: three fifty, three seventy five are center for transformer excellence like

[Frank Cioffi, President, Greater Burlington Industrial Corporation (GBIC)]: That's

[Senator Randy Brock (Member)]: a Those are gonna

[Senator Scott Beck (Member)]: be some high paying jobs you're gonna come into staff at.

[Senator Ann Cummings (Chair)]: St. John's Berry is looking very up and coming these days down. We've strong manufacturing. Yeah. I would not like to change this.

[Senator Scott Beck (Member)]: You still have 1,500 manufacturing jobs in Desertes. Yeah.

[Senator Ann Cummings (Chair)]: Okay. That's it. We'll get testimony on that one. And we can go offline