Vermont wooing big business
MONTPELIER >> When Vermont last month pledged $1 million to the company that recently acquired the former IBM plant near Burlington, it wasn't the only enticement the state dangled in hopes of keeping a long-time economic linchpin happy.
Documents obtained by The Associated Press after a request under the state Public Records Act show state officials looking to throw a $17 million highway upgrade into the mix.
The documents show the company pushing to speed up the improvements to Vermont Route 22A, a road on the western side of the state and a link in the most direct route from the former IBM — now GlobalFoundries — computer chip plants in Essex and Williston to company facilities in New York state.
They also show the company demanding support from the administration of Gov. Peter Shumlin for payments to GlobalFoundries from the Regional Greenhouse Gas Initiative, a multi-state pact that spins off money to states with a low carbon footprint.
And they point to these incentives coming in exchange for a promise that "up to" 100 temporary jobs at GlobalFoundries' Vermont plants would be made permanent, at a base wage of $14 per hour — less than what other Burlington-area companies are expected to pay when they get job-creation incentives from the state.
The documents show the $1 million, to be paid in two installments by March 31 and Oct. 31, marks the first time there will have been a direct cash grant of Vermont taxpayer dollars to IBM or GlobalFoundries. But, "I think the million-dollar investment is just the beginning," Shumlin told reporters last month.
"The reality is GlobalFoundries is an extraordinary job creator," the governor said. "We're darn lucky to have them. And if we're too dumb to partner with them you won't find this governor joining you."
A memo from Shumlin to the Emergency Board, which is made up the governor and the chairs of the four legislative money committees, sought to justify the payment in advance of the Jan. 8 meeting at which the board voted to make the grant from the Vermont Enterprise Fund. The memo was labeled confidential but was included in the batch of documents obtained by the AP.
It called GlobalFoundries Vermont's "most significant and vital private sector economic engine," and said the $1 million investment would generate $3.2 million in new tax revenue during the next five years, as well as support $72 million in plant upgrades and equipment. It acknowledged that $55 million of that investment already had been made.
State Auditor Doug Hoffer challenged the revenue estimate and several other assertions in the governor's memo, saying there was "no evidence" to support them. "Since there are no new jobs, where in the heck is that money coming from in the out years? It doesn't make any sense to me," Hoffer said.
Patricia Moulton, secretary of the Vermont Agency of Commerce and Community Development, defended the material in the governor's memo. She said the estimate was based on an economic model used by legislative researchers, adding that "it is updated annually, and has been used for many years."
Moulton downplayed the GlobalFoundries link with the Route 22A upgrade, saying the work was needed regardless of the company's wishes.
GlobalFoundries spokesman James Keller said in an email the company's interest in improving the road "has been around a few years, starting when we were owned by IBM." He said the company's truck shipments between the Vermont and New York sites had increased since the acquisition in July.
In a confidential email to Moulton, Janette Bombardier, the senior executive at the Vermont plant, expressed some dismay at the state's estimate that the $17 million in work on the road would not be complete for five years. "Regarding 22A, did you really mean to say FY (fiscal year) 21 and 22?" she wrote.
On the carbon credit program, she added, "Also, I want a commitment that we will get the support required" to get Regional Greenhouse Gas Initiative funds.
Moulton said in an interview that state officials were still investigating that possibility.
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