Economic Development
Economic development legislation focused on keeping core business tools in place while addressing the conditions needed for growth: housing, workforce, infrastructure, and access to capital. S.327 carried the main package, including changes to VEGI, RIDP, C-PACE, and related studies, while other bills reinforced the link between economic competitiveness and housing, education, and workforce policy.
S.327 served as the Legislature’s primary economic development bill of 2026.
The legislation permanently removes the sunset on the Vermont Employment Growth Incentive (VEGI) program, strengthens the Rural Industry Development Program (RIDP), establishes a statewide Commercial Property Assessed Clean Energy (C-PACE) framework, authorizes nickel-rounding for cash transactions, and directs several studies related to business growth, tourism, and workforce development.
- VEGI
A major component of S.327 is the permanent authorization of VEGI. Prior law would have sunset the program, creating uncertainty for economic development organizations and employers considering future expansion projects. By eliminating the sunset, lawmakers signaled continued support for performance-based economic incentives while reducing annual program caps. Regional Development Corporations and business advocates viewed the change as an important step in preserving a key economic development tool.
- RIDP (Rural Industry Development Program)
S.327 expands the Rural Industry Development Program by increasing potential reimbursement levels to as much as 50 percent of eligible project costs. The legislation also allows certain previously approved projects to access the higher reimbursement level for future expenditures, providing additional flexibility for rural economic development and business expansion projects. The FY2027 budget also includes $2 million for the program, earmarked for projects in Montpelier and Newport, providing additional support for rural economic development and business expansion.
- C-PACE
S.327 establishes Vermont’s Commercial Property Assessed Clean Energy (C-PACE) framework, creating a new financing tool for energy efficiency, renewable energy, resiliency, and other qualifying building improvements. The program allows municipalities to create C-PACE districts and enables project costs to be repaid through a property assessment, reducing upfront capital barriers and encouraging private investment in commercial, industrial, agricultural, and multifamily properties.
Although several of the measures below are covered in greater detail elsewhere in this report, they are highlighted here because of their direct implications for economic development, workforce growth, housing availability, and business competitiveness:
S.313 – Career Technical Education Transformation
While primarily an education initiative, S.313 was driven largely by workforce development goals. Many of its provisions were ultimately incorporated into H.955, including efforts to expand access to Career Technical Education, reduce barriers to participation, strengthen alignment with workforce needs, and ensure CTE coursework is fully integrated into students’ educational pathways.
S.328 – Housing and Community Development
Although principally a housing bill, S.328 included several provisions intended to support economic growth and workforce attraction. The legislation expands financing tools for housing development, creates an Off-Site Construction Accelerator Pilot, broadens certain housing financing authorities, and seeks to increase housing production to address one of the state’s most significant economic development challenges.
H.757 – Economic and Community Development
H.757 makes a variety of technical and programmatic updates to existing economic and community development programs. While not a major policy overhaul, the bill reflects the Legislature’s ongoing efforts to refine economic development tools and support community revitalization initiatives.
H.951 – FY2027 Budget
The FY2027 budget maintained funding for several programs important to Vermont’s business community, including the Vermont Small Business Development Center, Small Business Law Center, and Rural Industry Development Program. The budget also continued investments in workforce, housing, and community development initiatives that policymakers increasingly view as essential to the state’s long-term economic competitiveness.
