Business Success

S.327, a comprehensive economic development and workforce bill, was voted unanimously out of both the House Commerce and Economic Development Committee and the House Ways and Means Committee and is expected to be voted on the House floor next week. With the session entering its final stretch, S.327 is emerging as the primary vehicle for economic development policy this year and will return to the Senate following House action.

The legislation reflects a mix of progress and gaps, when measured against priorities identified through the Vermont Chamber’s policy retreats with manufacturers, tourism leaders, and legislators, as well as the data driven recommendations developed from the Vermont Futures Project’s Economic Action Plan and Competitiveness Dashboard.

Key sections of the bill include:

• Business Resources and Growth
  • Directs the Department of Economic Development to inventory public and private resources available to businesses  identify gaps and improve how those tools are communicated to businesses
  • Aligns with the Vermont Chamber’s priority to improve outreach and coordination of existing programs, addressing a consistent challenge identified by employers.
• Convention Center Task Force
  • Extends the timeline and expands membership of the task force studying a statewide convention center and performance venue.
  • Continues broader tourism infrastructure discussions, though remains exploratory.
• Vermont Employment Growth Incentive (VEGI) Revisions
  • Repeals the program sunset but reduces annual allocation cap on incentives from $10 million to $5 million.
  • While it provides long-term certainty for VEGI, it reduces a key tool for attracting and retaining business investment without adding a program aligned with current needs.
• Culinary and Hospitality Education Study
  • Requires a study on rebuilding Vermont’s hospitality workforce pipeline following the closure of the New England Culinary Institute.
  • Directly reflects priorities identified through engagement with the tourism industry.
• Hospitality and Culinary Apprenticeship Pilot
  • Establishes a two-year, multi-employer apprenticeship pilot for the accommodation and food services sector.
  • Strong alignment with employer driven solutions to strengthen workforce pathways in a critical sector.
• Rural Industry Development Grant Program
  • Codifies the program in statute to support business expansion, relocation, and redevelopment.
  • Advances broader goals of supporting regional economic growth.
• Nickel Rounding for Cash Transactions
  • Allows businesses to round cash transactions to the nearest five cents with required notice.
  • A technical change providing operational flexibility.
• Commercial Property Assessed Clean Energy (C-PACE)
  • Establishes a framework for municipalities to create C-PACE districts, enabling access to private financing for energy efficiency and resiliency projects
  • Supports business investment in infrastructure and long-term cost management.

S.327 advances several priorities shaped by direct employer engagement, particularly in hospitality workforce development and improving access to business resources. These elements reflect ongoing efforts to better align state programs with employer needs and workforce realities.

The bill also leaves key priorities unaddressed. It does not include reforms to improve permitting and regulatory coordination, which remain among the most frequently cited barriers to business investment.  In addition, it does not advance policies to support automation and productivity, both of which are critical in a constrained labor market.

The most significant concern is the direction of the VEGI changes. While the program remains in place, reducing its scale without introducing a modernized alternative limits Vermont’s competitiveness at a time when the state continues to lag behind peer states in economic momentum.

As the bill moves to the House floor next week, attention will focus on final House action before negotiations with the Senate. S.327 represents a meaningful step on several workforce and development priorities, but also highlights the continued need for a more comprehensive approach to economic competitiveness in Vermont.

Vermont’s economic competitiveness took center stage in the House Ways and Means Committee this week as lawmakers listened to the Vermont Futures Project present findings from its Competitiveness Dashboard. The dashboard is a compilation of national and regional research, illustrating data sets that provide a clear picture of how Vermont compares to other states and highlights trends shaping the state’s economic performance.

The most striking data point of the research is Vermont ranks 51st in economic momentum, a measure that evaluates population trends, employment growth, business formation, and overall economic performance relative to other states. The ranking reflects a combination of indicators that, taken together, point to a slowing trajectory in key areas that drive long-term growth.

In presenting the data, Vermont Futures Project Executive Director Kevin Chu emphasized these findings are not based on a single metric, but rather a consistent pattern across multiple measures. Vermont is currently the only state experiencing both natural population decline and negative net migration, while also ranking near the bottom in business formation and employment growth. These trends are further compounded by challenges related to cost of living and overall economic competitiveness.

A key theme from the presentation was the importance of focusing on the foundational elements that support economic growth. Housing availability and workforce supply continue to be central constraints. Maintaining a stable population requires sufficient housing to meet changing needs, and expanding the workforce depends on the state’s ability to attract and retain residents.

The data also highlights the broader competitive landscape. Other states are actively investing in strategies to attract talent, support business growth, and expand economic opportunities. In that context, Vermont’s ability to build economic momentum depends on how effectively it aligns its policies and investments to support those same goals.  Currently these goals seem unattainable, as the Committee continues to evaluate tax policy proposals that would add barriers to improving Vermont’s economic competitiveness.

While there are no single solutions to these challenges, the Futures Project’s findings reinforced that improving competitiveness will require a coordinated approach. Aligning housing, workforce development, regulatory predictability, and overall economic policy will be essential to supporting sustainable growth and strengthening Vermont’s position in a competitive national environment. As policymakers continue to evaluate proposals, including changes to tax policy, grounding those decisions in data and a clear understanding of the state’s economic trajectory will be critical to building long-term economic momentum.