DFR completes legislative report analyzing the economic impact of worker resettlement incentive programs

Montpellier, VT – Today, the Department of Financial Regulation (DFR) submitted a report to the legislature examining the various Vermont worker relocation incentive programs under Law 51 of 2021.

In 2018, Vermont implemented a remote worker relocation program, the first in the country, that reimburses certain moving expenses up to $ 10,000 to people who have moved and worked remotely in Vermont. This was followed by a 2019 program focused on attracting new workers to existing job openings in Vermont and a 2021 program combining elements of both programs.

The DFR has been tasked by the Vermont Legislature to review “the effectiveness of incentive programs in attracting new remote workers to address the demographic challenges and labor shortages that exist in Vermont. “. DFR contracted with Philadelphia-based consulting firm PFM Group Consulting LLC to perform economic analysis of the programs.

To determine the true economic impact of the programs, the consultant first had to address a fundamental challenge: How many program participants would have moved to Vermont without the incentives? The consultant addressed this limitation by interviewing program participants to assess the impact of the incentives on their decision to move to Vermont, then updated the economic impact based on the survey results. Using this approach, the consultant estimated the following impacts:

  • Economic impact estimates: The consultant estimated that the 140 participants in the 2018 program helped spur the creation of 52 new indirect jobs, $ 2.5 million in wages and $ 7.6 million in annual economic benefits in Vermont. In addition, the consultant estimated that the 167 participants in the 2019 program resulted in the creation of 63 new jobs, $ 3.1 million in salaries and $ 9.5 million in annual economic impact.
  • Estimates of direct tax revenues: The consultant also estimated that the 2018 and 2019 programs created approximately $ 419,001 and approximately $ 527,089 in annual state tax revenues, respectively. Taking into account the appropriations for the 2018 and 2019 programs ($ 500,000 and $ 670,000 respectively), the consultant estimated that the two programs paid for themselves within two years of their implementation.

Considering these impacts together, the consultant estimates that each tax dollar spent for the 2018 program generated $ 93.88 in economic activity and that each tax dollar spent for the 2019 program generated $ 66.26 in activity. economic. The 2021 program was not included in the analysis due to its recent implementation.

The report also provides several recommendations for improving programs and the consultant also highlighted Vermont’s need to tackle affordable housing, availability of child care services, and high-speed internet access to attract newcomers. new workers in our state.

Read the full report.

At least 52 other worker relocation programs have been put in place by states and municipalities over the past three years, but this is only the second study examining the effectiveness of such programs. The first looked at the remote work program in place in Tulsa, Oklahoma, which was completed last month. This report found similar challenges in definitively quantifying the impact of the worker relocation incentive, but concluded that the program likely benefited Tulsa’s economy.

Connect with the Vermont Department of Financial Regulation on Twitter, Facebook and on our website.

###



Source link