In 2006, the Legislature established the Commission on the Future of Economic Development (CFED).  Made up of leaders in the private sector and government, CFED was charged with identifying those elements that advance or impede economic development.  It was also asked to develop goals believed to be most critical to Vermont’s future prosperity and vitality.

From this work, the Committee identified four principal goals to establish economic viability, security and opportunity for all.  These were:

1.    Develop a highly-skilled multi-generational workforce
2.    Invest in digital, physical and human infrastructure
3.    Take advantage of our small scale to create nimble, efficient and effective government and regulation
4.    Leverage our brand and scale:  our rural character, reputation for environmental quality, and entrepreneurial spirit.

“Bold and disciplined action is needed to accomplish these goals,” the report stated.  “The legislature, administration, and myriad of economic and community partners must work together with unerring discipline to focus our policies, regulations, programs and incentives on the critical interconnection between Vermont’s assets, our collective values, our capabilities, and the opportunities which will increase state revenues and the prosperity of all Vermonters.”  http://www.snellingcenter.org/cfed

This session, the House Committee on Commerce and Economic Development has been working on a bill to develop near-term and long-term economic strategies guided by the four CFED goals.  Near-term strategies focus on stakeholder collaboration for effective use of the stimulus monies.  An example of this would be writing unified proposals for competitive grants. Long-term strategies set a statewide framework for collectively realizing sustainable economic prosperity.  An example here would be the requirement that the legislative and executive branches align new programs and initiatives with the four CFED goals.

The bill includes legislation that would advance development or remove impediments in a variety of areas.  A list of these is as follows:

•    Green Economy Initiatives
•    Workforce development
•    Housing incentive program
•    Inventor and entrepreneur assistance
•    Licensed lender exception
•    Energy efficiency
•    Forestry and biomass
•    Motion picture business
•    Tourism infusion: excess meals and rooms revenues
•    Federal funds and smart grid
•    Digital business
•    Small business/technology loan program
•    Microbusiness and entrepreneurship

If you would like me to email a copy of the 68-page bill or the 6-page description of this bill, you can contact me at: KLWebb22@mac.com.  985-2789.

Please join Joan Lenes and me on Tuesday mornings from 7:30-8:30 am at Brueggers and the 4th Monday (3/23) at Village Wine and Coffee.

March 5, 2009

First, the good news:  The American Recovery and Investment Act (ARRA), also known as the “Federal Stimulus Package,” was signed into law in February.  It is estimated that the ARRA will bring in approximately $925-950 million in resources over the next two years.  It is a highly complex package coming in roughly 300 different funding streams, each with its own terms and conditions.  Some of the funds will require state or local funding matches while others have tight time constraints. Most have very specific project parameters.

On February 26, Stephen Klein from the Joint Fiscal Office presented preliminary estimates as to the dispersal of these funds.  He cautioned us that these were truly preliminary.  They are still reviewing the implications and strings attached to these funds.  A percentage of matching dollars will likely be required to capture $240 million of these funds.  He estimated the following:

1.    $275-300 million will go to the Vermont General Fund
2.    $290 million will go to project funding such as transportation, energy, broadband, upgrading.
3.    $210 million to state, local and communities for schools, organizations, higher ed., research and businesses
4.    $25 million to individuals in the form of Pell grants, food stamps, SSI etc.

Representatives from the Legislature and Administration have been meeting continuously in order to better understand contingencies, plan and coordinate best use of these monies once they are available.

More good news:  Vermonters can also expect approximately $500 million in tax cuts for individuals and businesses.  Some of these tax cuts include credits for first time homebuyers, credit for education expenses, and child tax credits. We can also expect energy-related provisions for people who improve the energy efficiency of homes, purchase plug-in vehicles or invest in renewable energy such as biomass or wind among others.

Now, the not-so-good news.  By 2011, current projections indicate that we will face a deficit of more than $200 million if we stay on the same course.  Projected revenues are simply outpaced by spending.  Finance 101 reminds us that we must increase revenue, decrease spending, or both.  But these times call for more than that.  They also call for a clarification of principles and values that will guide us in restructuring and redesigning our state through hard times and into the future. Number shifting alone cannot do this.

When the Legislature returns, we will be addressing a 68-page bill that  1) establishes a state-wide guide to economic development, 2) promotes near-term economic development by getting the most out of ARRA and 3) promotes long-term economic development.  This bill will be guided by principles developed after 2 ½ years of testimony and public hearings from businesses and people throughout the state.  It is extensive.

Please join Joan Lenes and me at Bruegger’s Tuesday mornings at 7:30 or at Village Wine and Coffee most Monday afternoons at 4:30 or by appointment. I will be away the week of March 9th. KLWebb22@mac.com. I enjoy hearing from you.