1. VERMONT EMPLOYMENT GROWTH INCENTIVE (VEGI)

2. VEGI: WHAT’S IN A NAME?
Vermont: New, qualifying job and payroll creation and capital investment in Vermont.
Employment: Incentive is calculated based on creation of new qualifying payroll for new qualifying jobs.
Growth: There must be incremental job and payroll growth, beyond organic (background) growth, in Vermont, to be eligible for approval and to generate an incentive.
Incentive: Not a grant or lending. Program goal is to incent activity that would not occur, or would occur in a less desirable way, without the incentive.
V = Only for eligible activity in Vermont
E = Calculation of incentive is based on qualifying payroll paid to new qualifying employees
G = Has to be incremental. There have to be new qualifying jobs and payroll created, beyond normal or background growth.
I- Not a grant or financing. Have to meet approval criteria and then incentive is paid in cash installments after annual performance requirements are met.

3. VEGI: What is it? Cash incentive for new job and payroll creation by:
Existing Vermont businesses
Start-up businesses
Businesses relocating to/expanding into Vermont
Requires authorization to earn incentive based on statutory criteria
Only prospective investments are eligible
Payment of cash incentive requires meeting annual performance requirements
Provides cash incentive to existing Vermont businesses that will add qualifying jobs, to start-ups, and to help recruit new businesses to Vermont.
Company and project must first go through an approval process to be authorized to earn the incentive.
Not retroactive – only prospective activity that occurs because of the incentive is eligible
Incentive is paid in cash installments, if authorized, and only after annual payroll, qualifying job, and investment performance requirements are met.

4. VEGI: WHAT KIND OF PROJECT/COMPANY?
Will add new qualifying jobs and payroll because of the incentive
Beyond background (organic) growth
Qualifying = New jobs that are 160% of Vermont minimum wage ($16.80 in 2018), offered certain benefits, FT (35 hours/week), Permanent (not contract, PT, Seasonal), Non-owner (10% or more ownership). (Note: Some regions 140%)
Capital investments: will increase total incentive available, but are not required
Any type of company
Any size company
Any sector
Any location in Vermont
Have to add new, qualifying jobs
Qualifying means full-time, permanent jobs that pay above 160% of VT minimum wage
Jobs have to be above and beyond background growth, which is calculated based on the growth in the company’s sector in Vermont
No statutory limitation on type, size, sector or location.
But must be able to meet approval criteria

5. VEGI: APPROVAL CRITERIA
But For: Activity would not occur, or would occur in a significantly different and less desirable manner, except for the incentives.
Benefits exceed costs: Fiscal benefits (new tax revenue from all sources) outweigh cost of project and incentive.
Welcome and in Good Standing: Project/Company welcomed by municipality, complies with local and state laws and regulations, project fits municipal and regional plans, business is not a named party in a state action, and is current on state tax liabilities.
No Unfair Competition: Incentives cannot provide unfair competition in limited, local market.
But For: Have to show that without the incentive, the activity would not occur at all, would not occur in Vermont, or would occur in a much different way which would cause less tax revenue to be generated to the state of Vermont
Guidelines: Set of 9 guidelines to ensure well compensated jobs, minimizing negative impact on the environment and the community, and maximizing positive impact in relation to supporting the community and other businesses.
C/B: analysis of the project’s overall impact on the Vermont economy, then the tax revenue that will be generated to the State after benefits and costs calculated, including the cost of the incentive payments. Has to be positive.

6. VEGI: PROCESS OVERVIEW
Authorized:
Pre-Application and Incentive Estimate - Anytime
Initial Application – First Friday of the month; VEPC approval before project commences
Final Application – First Friday of the month; VEPC approval before end of calendar year
Earned:
Once authorized, a portion of the total incentive is earned by the company each year that new qualifying payroll is created (for up to five years) by meeting economic activity performance requirements for that year.
Performance requirements are: 1) Maintaining base employment and payroll; 2) creating the new qualifying payroll for that year; and 3) creating the new qualifying employment or making the qualifying capital investments for that year.
 Paid:
Once the annual incentive is earned, incentive is paid out to the company in five installments. 
But For: Have to show that without the incentive, the activity would not occur at all, would not occur in Vermont, or would occur in a much different way which would cause less tax revenue to be generated to the state of Vermont
Guidelines: Set of 9 guidelines to ensure well compensated jobs, minimizing negative impact on the environment and the community, and maximizing positive impact in relation to supporting the community and other businesses.
C/B: analysis of the project’s overall impact on the Vermont economy, then the tax revenue that will be generated to the State after benefits and costs calculated, including the cost of the incentive payments. Has to be positive.

7. VEGI: ENHANCEMENTS
Green: Certified by Secretary of Commerce as research, design, engineering, development, manufacturing related to:
Waste management;
Natural resource protection and management;
Energy efficiency or conservation;
Clean energy.
LMA: Located in eligible LMA (all Southern VT is eligible) and approved by VEPC Board.
Capped
Must meet LMA Enhancement Criteria
Both enhancements increase incentive and decrease net return to the state
But For: Have to show that without the incentive, the activity would not occur at all, would not occur in Vermont, or would occur in a much different way which would cause less tax revenue to be generated to the state of Vermont
Guidelines: Set of 9 guidelines to ensure well compensated jobs, minimizing negative impact on the environment and the community, and maximizing positive impact in relation to supporting the community and other businesses.
C/B: analysis of the project’s overall impact on the Vermont economy, then the tax revenue that will be generated to the State after benefits and costs calculated, including the cost of the incentive payments. Has to be positive.

8. VEGI: EXAMPLES Commonwealth Dairy: Start-up and Expansion
GS Precision: Expansion
Chroma; Expansion
National Hanger: Expansion
JBM Sherman Carmel: Expansion
But For: Have to show that without the incentive, the activity would not occur at all, would not occur in Vermont, or would occur in a much different way which would cause less tax revenue to be generated to the state of Vermont
Guidelines: Set of 9 guidelines to ensure well compensated jobs, minimizing negative impact on the environment and the community, and maximizing positive impact in relation to supporting the community and other businesses.
C/B: analysis of the project’s overall impact on the Vermont economy, then the tax revenue that will be generated to the State after benefits and costs calculated, including the cost of the incentive payments. Has to be positive.

9. Contact Us Casey Mock, Executive Director
Vermont Economic Progress Council
National Life Building
Montpelier, VT
Telephone: (802)
Abbie Sherman
Grants Management Specialist
Telephone: (802)