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“From Dirt Roads to Tech Towns – no matter where you reside in Vermont, you will be part of a community…” – ThinkVT (Vermont Department of Economic Development)

Visitors come to Vermont for the autumn foliage; the many outdoor recreation opportunities and still-wild places; the local tradition of food-to-table, farmers’ markets, and craft beer; the relative safety; our settlement pattern of villages and downtowns hosting vital community services surrounded by rural countryside that is still, despite the many pressures, a working landscape. Those attributes and more flourish in our cities, towns, and villages. Local leaders are determined to build on the unique assets of their communities, providing amenities that their citizens expect and that are authentic to and serve to implement the vision of each community.


What entices visitors to come to Vermont? What keeps them here? What makes people decide to make a life here and contribute to the future of the state? Every Vermont community wants a local economy that supports residents and makes that city, town, or village a place where people want to live, work, and play.


Challenges. We all know that Vermont has its challenges.


     Our population is the second oldest in the nation.

     While our high school graduation rate is one of the highest in the nation (87.9% in 2017), the $19,000-to-$28,000 per student cost is higher than many other states. (The national average was $12,578 in 2014-2015.)


     Our rate of college attendance is low (54% in 2014).

     From 2016 to 2017, Vermont’s population grew by 0.05 percent, an improvement over the last ten years and yet the second lowest rate in New England, whose growth rates are low overall. (This reflects a national trend: U.S. population growth has slowed almost every year since 1992 due to declining fertility rates, aging populations and the associated increase in death rates, and declining rates of international immigration.)

     Vermont consistently ranks in the top five in the country in terms of total tax burden (the proportion of total personal income that residents pay toward state and local taxes).

     Due to the state’s mountainous terrain, broadband and cell phone service are spotty.

     The lack of sufficient community wastewater capacity severely constrains development in the village centers, which state and local policies prioritize for growth opportunities.

Competition from our Neighbors. Meanwhile, Vermont is competing with its neighboring states for business. This week’s Radically Rural Summit in New Hampshire, brought together “500 people who are passionate about creating vibrant, robust rural communities and eager to learn, connect and lead change.” The purpose of that state’s new Department of Business and Economic Affairs – like Vermont’s ThinkVT program – is to enhance economic vitality and promote New Hampshire as a destination for domestic and international visitors. Between 2011 and 2017, New York spent $354 million on ads to promote tourism and economic development. A little farther away, the Maine Department of Economic and Community Development now includes the Maine Film Office. (Vermont has gone nearly ten years without a film commission, losing revenue from that industry to neighboring states.)


Moving Forward. None of us would live in Vermont if we didn’t welcome a challenge. The resolve of Vermonters to build on the Green Mountain State’s allure, energize its economy, diversify and grow new businesses in the face of an increasingly unreliable winter climate, and to build on the attributes that distinguish each city and town from its neighbors is strong. The governor has made economic resurgence a cornerstone of his administration, and the legislature has supported those endeavors. Growth takes place in our cities, towns, and villages, and local jurisdictions are seeking to stand out not only from their neighbors but also among municipalities across the country. According to the National League of Cities’ “State of the Cities 2018” report, 58 percent of mayoral annual speeches highlighted economic development as the major policy issue. Infrastructure was a close second at 56 percent. And infrastructure improvements lay the groundwork for economic development in all of its multifarious manifestations.


Last June, the Killington Grand Hotel was packed with enthusiastic, energetic, and visionary local officials attending the VLCT-hosted conference “Building a Sense of Place: A Forum for Municipal Officials and Community Development Groups.” Each attendee was intent upon learning new strategies to identify their municipality as a unique, fresh and maybe quirky Vermont destination and to spur future growth that highlights those assets. Keynote speaker Peter Fairweather, an expert in strategic change processes for communities, stressed the importance of working within the appropriate scale for each community. “Be true to what makes your town unique and develop efforts around that,” he said. “Every place is different; every community has something interesting about it. Promote those characteristics, create a place that speaks truthfully to them, and people will want to spend time there, open a business there, or decide to make it their home.”


Last summer, the Department of Labor’s, Economic and Labor Market Information Division released a report that highlighted the distribution of jobs for each of 15 career and technical education regions – although it didn’t include figures for the self-employed or for the burgeoning outdoor recreation economy, two sectors that generate significant economic activity. According to The Trust for Public Land’s “Vermont’s Return on Investment in Land Conservation” report, every state dollar invested in land conservation returns nine dollars in natural goods and services by protecting lands that support forestry, farming, outdoor recreation and tourism enterprises, adding to an exceptional quality of life and supporting more than 50,000 affiliated jobs.


According to a recent Vermont Futures Project report, Vermont will need 10,000 additional workers annually until 2040. The report included recommendations for private businesses, state government, non-profits, and individuals to adopt in an attempt to close this ongoing workforce supply gap.


Planning Your Economic Strategy. In 2014, Vermont became one of the few states to complete a statewide comprehensive economic development strategy that established “eight steps to success”:


1.   Make financing accessible to Vermont enterprises

2.   Educate a great workforce (targeted to skills needs of Vermont businesses and residents)

3.   Build for the future (improve infrastructure critical to development)

4.   Help businesses flourish, especially those likely to have the greatest impact on quality of life

5.   Enhance the Vermont brand

6.   Preserve the working landscape

7.   Cultivate innovation

8.   Plan for resilience.

Act 52, passed in 2011, requires municipal plans to include an economic development element when plans are readopted (required every eight years). That element needs to identify polices, projects, and programs necessary to foster economic growth. The elements serve to focus municipal officials and citizens on strategies that will fit in their community. Today, statewide and regional economic development efforts incorporate those goals into the programs offered to municipalities and businesses undertaking projects.


Opportunities in Place. The Agency of Commerce and Community Development (ACCD) offers assistance to preserve the historic character and enhance the future of downtowns and village centers. Vermont has 23 designated downtowns, each with an organization that manages the development and marketing of the designated area.


ACCD’s Downtown Development Board has approved six growth centers – in Bennington, Colchester, Hartford, Montpelier, St. Albans City, and Williston. A growth center aims to align public infrastructure and private building investments with local policies and regulations to ensure that 20 years of future development will enhance vitality in the commercial center, and protect surrounding farm and forestland. The Downtown Development Board has also approved 180 designated village centers (often several in one town), two new town centers, and five neighborhood development areas.


Additionally, the Vermont Economic Progress Council oversees 11 tax increment financing (TIF) districts: in Barre, Bennington, Burlington (two), Hartford, Milton (two), Montpelier, South Burlington, St. Albans City, and Winooski. Municipalities establish TIF districts around a commercial center that needs public infrastructure improvements in order to encourage private real property development or redevelopment. The council then reviews and, hopefully, approves the district. Voters must agree to incur debt to build public infrastructure, with a portion of newly generated property tax revenues dedicated to repay the debt. TIFs are neither for the faint of heart nor for towns with limited staff to administer them.


Partly because of the complexity in administering TIFs and the slim likelihood that smaller towns could undertake the effort, the 2017 legislature passed Act 77, which established economic development initiatives for towns in rural Vermont, such as providing funding and regulatory incentives for farms, the forest products industry, and other emerging agricultural businesses. Act 69, also passed last year, creating the Rural Economic Development Initiative “to promote and facilitate community economic development in the small towns and rural areas of the state.” And this year’s Act 194 created the Outdoor Recreation Friendly Community Program to help communities leverage recreation assets to foster economic growth.


The federally funded Northern Border Regional Commission (NBRC) invests in economic and infrastructure projects in Caledonia, Essex, Franklin, Grand Isle, Lamoille, and Orleans counties. Depending on the level of economic distress, an NBRC project can be eligible for up to 80% matching grants.


Accelerating Our Success. Probably the most important need in downtowns and village centers eager to build on their historic settlement patterns is wastewater capacity. A compact village or downtown will not be able to grow until it has addressed the need for wastewater and a reliable water supply. New or rehabilitated housing to accommodate increasing demand is dependent upon the availability of both.


Both the cost of infrastructure improvements and the process to secure permits are daunting. Vermont has much work to do to align its many permit processes at state agencies, in Act 250, and even at the local level. Vermont needs to eliminate duplicative review and devolve permitting authority to the most local level demonstrating capacity if it hopes to remain economically competitive.


People who move to Vermont from more urbanized areas depend on and expect high-speed internet and consistent cell phone coverage to facilitate both their personal and business lives – basic amenities that are not available everywhere. While Vermont’s outdoor recreation economy and craft brewing businesses put many towns on the national map, a lack of wastewater treatment and spotty broadband service continue to limit growth opportunities.


Vermont’s longtime state policy is to preserve and promote compact settlement areas surrounded by rural countryside. If amenities and appropriate infrastructure – which are inextricably linked – are in place in compact settlements making it attractive to build there, less development will occur in the rural surrounding countryside.


While much has been accomplished, much remains to be done. State and local governments can work in partnership with citizens to reimagine, reinvent, and strengthen vibrant communities, positioning them to thrive in the twenty-first century.


VLCT supports:

local discretion in pursuing economic development activity;

substantial deference to municipal planning, zoning, and siting decisions when state entities make permitting decisions;

funding and incentives for programs to spur economic development at the local level including deference to locally implemented tax stabilization agreements;

directing incentives and programs to designated downtowns, village centers, new town centers, growth centers, and other areas designated in the adopted municipal plan for growth and development near jobs, services, and amenities.

delegating the responsibility for Act 250 to municipalities with duly adopted local zoning and subdivision regulations and to those with designated downtowns.


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