The recent layoff of over 100 employees at Keurig highlights the flaws in the Vermont Employment Growth Initiative (VEGI) program.
The concept behind the VEGI program is to give tax incentives to companies to hire “but for” workers to positions that would not be possible without the tax incentives, and that the taxes paid by these newly hired workers will make up for the revenue lost with the tax incentives. The biggest problem with the program is that large tax incentives are given to large companies. These are exactly the companies that are most likely to leave the state or suffer these kinds of downturns.
A better way to create sustainable jobs that pay a livable wage is to fund small businesses and to create infrastructure that enables job growth. While microloans are harder to track and don’t make for great press releases they are much more effective and allow for the risk to be spread across a number of businesses.
Since 2007, Green Mountain Coffee Roasters/Keurig has received four separate tax incentive packages totaling over $7.7 million. Imagine what this kind of money could have done spread out across 100 small businesses. Another problem is with the rate of return realized by the program. Investing a dollar to get back a dollar is hardly a way to grow; at best you are standing still. By investing in infrastructure you create the climate for new jobs not only for the present but going forward, whether or not an individual business succeeds or fails.
This kind of forward thinking to support small businesses that help grow the Vermont economy, protect our environment and nurture our communities is taking place in Bristol where a new industrial park is being developed; at the Vermont Sustainable Jobs Fund where the Flexible Capital Fund helps boost growing businesses in the natural resources markets; at the Farm to Plate program where the focus is on sustainable agriculture; and in so many other small, innovative programs. These are all successful examples of how we can be doing better with our hard-earned dollars.
Stephen Pilcher
North Ferrisburgh