Bills would cushion blow of Yankee closure
One proposed statute would offer tax incentives to former Yankee employees who are starting new businesses. Also eligible for tax breaks would be businesses hiring recent college graduates and first-time home buyers in Windham County.
The other bill would extend a property-tax break that benefits Vernon residents, even after the nuclear plant hosted by the town no longer is producing power.
"Money is one thing," said state Rep. Mike Hebert, R-Vernon, who is a sponsor of the latter bill. "But this is something we can do to provide stability."
Vermont Yankee owner Entergy last year announced that the aging plant would shut down by the end of 2014, citing economic reasons. While decommissioning will take time, the closure eventually will siphon hundreds of jobs and critical tax revenue from this area and from the state.
In October, the House Commerce and Economic Development Committee and the House Natural Resources and Energy Committee held a joint hearing in Vernon to determine what the state could do to help Windham County weather Yankee's closure.
State officials later struck a tentative deal with Entergy that provides, among other things, for the company to pay $10 million over five years to promote economic development in Windham County.
Also, the town of Vernon has negotiated a one-year tax-stabilization agreement with Entergy.
Hebert's bill, H.835, would add another layer of insulation for local taxpayers. Its statement of purpose is to "alter the tax treatment of towns hosting an electric-generating plant subject to the electric-generating tax" -- in other words, Vernon.
He explained that the legislation actually would continue a long-term tax break that saves all Vernon property owners money.
Because Entergy pays a state electric-generating tax based on power produced at Yankee, and because the town hosts the plant, Vernon property owners at one point had to pay just half the statewide education-tax rate.
Over the years, that number has risen to 75 percent of the statewide rate. But the reduced rate still saves Vernon taxpayers a bundle, and officials were concerned that the tax break would cease when Yankee shuts down.
Hebert's bill says that "Vernon shall continue to be treated as if its grand list included an operating electric-generating plant ... until the property in Vernon currently composing an electric-generating plant ... has been decommissioned and repurposed for another use."
That means the town's education-tax break would continue for the near future. Hebert argues that Vernon deserves such a break.
"We're losing a major employer," he said. "And we will still continue to send a great deal of money to Montpelier."
This afternoon in Montpelier, the state House Committee on Ways and Means is scheduled to hear testimony on the bill.
Also referred to Ways and Means is H.842. The bill was introduced by state Rep. Tim Goodwin, a Weston Independent whose district includes several Windham County towns.
Goodwin's bill "proposes to make tax changes designed to assist with the transition when the large electrical-generating plant in Windham County ceases operation." It does so in three ways:
-- The bill provides for an income-tax credit and an income-tax exemption for new businesses started by former Yankee employees. Credits would be capped at $5,000.
-- It allows "bonus depreciation" for businesses that hire recent college graduates in Windham County. The bill says anyone who hires such a graduate "shall be entitled to an additional deduction equal to one-quarter of the total salary and benefits paid to the recent college graduate in the preceding tax year."
-- The legislation also would exempt first-time Windham County homeowners from the property-transfer tax as long as the transaction is for $300,000 or less.
While Hebert is hoping H.835 will move forward soon, Goodwin is not as optimistic for progress on H.842.
"It would probably take something not far from an act of God, and one that we probably would not want to see, for the bill to go anywhere this year or probably next," he wrote in an e-mail to the Reformer.
"But it gets a bill introduced to Ways and Means that would provide incentives for some people from an educated workforce -- who like it right where they are -- to stay and start businesses," Goodwin added. "It would also do a little to make purchasing a residence in Windham County attractive as well as helping create an environment for building an educated workforce."
The full text of the two Yankee bills -- and for all bills and resolutions introduced in the Vermont Legislature -- is available by searching via bill number, title, keyword or sponsor at www.leg.state.vt.us/ResearchMain.cfm.
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