Senate committee reviews S.88 to add enhanced VEGI category for employee‑owned businesses

Sen. Wendy Harrison, sponsor of S.88, presented the bill Wednesday to the Senate Economic Development, Housing & General Affairs Committee as a targeted change to the Vermont Employment Growth Incentive (VEGI) program.

Harrison said the bill would create an enhanced incentive for locally owned and controlled, employee‑owned businesses (including worker cooperatives and ESOPs) to keep firms anchored in Vermont and increase the state’s return on investment. “They won't move out,” Harrison said of employee‑owned firms, arguing the structure makes them “better employers in terms of pay and benefits.” She cited Chroma as an example of a local company that converted to employee ownership and “is just doing great things.”

Rick Segal of the Office of Legislative Council walked the committee through the bill text and the mechanics of the enhancement. “Enhanced is 90%. So there's extra 10% there,” Segal said, describing how the enhanced incentive raises the share of new revenue growth counted in the VEGI calculation from the typical 80% to 90%. He also described an adjustment to qualifying payroll for the enhanced incentive that effectively multiplies a business's full‑time payroll by an additional 20% of the background growth rate used in the program’s payroll calculation.

The draft adds a statutory definition of “employee‑owned business” intended to be inclusive. It lists types of ownership arrangements such as employee stock ownership plans (ESOPs), worker cooperatives, and organizations that meet specified member‑control and allocation criteria. Sponsors and counsel repeatedly said Vermont currently lacks a single statutory definition and that they intend to take testimony to confirm which structures should be covered.

Committee members pressed on practical matters: how frequently companies can claim the incentive, how large the resulting award might be (Segal said the final dollar value depends on a company’s employees and revenue growth and that JFO assists with calculations), and whether marketing or outreach would be paired with the change. One committee member noted VEGI application volumes and recommended a broader program update; committee leaders agreed to invite agency staff (named in the meeting as Jessica and Megan Sullivan) to brief the panel on program performance and outreach.

No motion or vote was recorded. Committee members directed staff to schedule testimony from the Vermont Economic Progress Council staff and the agency that administers VEGI, and to gather fiscal details so the committee can evaluate the enhancement's cost and likely uptake.

The committee also flagged drafting and scope issues for public testimony: whether the incentive should target employee‑owned firms only or also explicitly include locally owned but not employee‑owned businesses, and whether administrative barriers to applying for VEGI should be addressed alongside any enhanced award.

The committee left the bill in discussion status and set follow‑up briefings as the next step.