Thank you to this week’s sponsor of our Advocacy Update:
March 26, 2021
An astute and comical comparison was made on a call LCC hosted this week; that just as the warm temperatures we experienced in the last week are what Vermonters know as “false spring” or “fool’s spring” since “true spring” is a few cold spells away, we are facing a “false spring” of sorts in many areas of policy. This is true of federal aid, as we know it is coming, yet we don’t know all the rules. We also see this in re-opening where we’ve heard promises of normalcy soon, and we’ve seen some turns of the spigot and increases in vaccinations, however, we are not in a place where we can truly act on any of the temperate news.
In this week’s update;
- Governor Scott Promises Blueprint to reopening; urges caution and vaccination
- State budget passes the House
- Revenue bill that passes House brings mixed reaction
- Problematic unemployment bill advances in the Senate
- H.159, Economic Development Bill, passed in the House
- Federal Business Relief Updates
- The Laundry List
Governor Scott Promises Blueprint to Reopening; Urges Caution and Vaccination
Today Governor Scott promised a blueprint for opening up based on a percentage of those vaccinated, a move we’ve discussed in previous updates as “a Vermont pandemic exit strategy” and something we have long been advocating for. This plan will outline the lifting of restrictions throughout the Spring as more Vermonters become vaccinated. Earlier this week, Governor Scott announced that after a White House briefing, the State will be receiving 5,000 more doses of the vaccine for a total of 23,000 next week. At this time, Vermont ranks first in the nation for the percentage of people over 65 who have gotten vaccinated, a demographic that represents 93% of hospitalizations and deaths from the virus. At this time, 85,700 Vermonters total have gotten a first dose of the vaccine and 103,800 Vermonters have gotten both doses making up about 35% of the population.
Now is not a time to become complacent though. Vermonters need to continue mitigating the virus as best they can and get the vaccine as soon as it is made available to you.
State Budget Passes House
Yesterday the Vermont House passed a roughly $7 billion state budget. Within the state budget is about $650 million in American Rescue Plan Act (ARPA) dollars. $650 million is roughly half of the discretionary ARPA money the state will receive. This has been an emerging point of contention as the Governor and his administration staff have expressed some dismay over spending those funds in advance and early, as they are available for three and a half years. From conversations we’ve had with those at the federal level, the U.S. Treasury is likely to take its full 60-days to create guidance and announce it all at once; as compared to the waves and multiple iterations of guidance that we received for CARES Act funds.
As a reminder, the state was already expecting to see available one-time money of roughly $200 million due to better-than-expected revenues (they were still bad in the grand scheme of things, just better than expected). The state budget offset most of the proposals that would have been paid by these dollars to instead be paid with ARPA dollars. Those one-time dollars have been directed towards the $150 million in payments the state will make towards the unfunded liability associated with the state pension systems unfunded liabilities next year in a hope that prioritizing next year’s debts, rating agencies will look favorably on Vermont.
Still, while some things the state would like to do clearly are dependent on guidance, there are others that are clearly in the law and the state is safe to move forward with; mainly investments in water, sewer, and infrastructure. That is where the bulk of the ARPA spending is in Vermont’s budget with $150 million to broadband buildout, $100 million to state IT infrastructure improvements originally planned to be done with state one-time dollars, and $100 million towards water quality projects over the next five years.
Revenue Bill Passes, Prompting Mixed Feelings
H.437, an act related to changes that affect the revenue of the State, passed the House this week. The bill does three big things;
- It adds a marginal surcharge to the property transfer tax, meaning it is applied to the value of the property transferred above $1 million, so properties transferred over $1 million would pay 1.95% (1.25% plus 0.5% new surcharge + 0.2% clean water surcharge) on the value of the transfer over $1 million, up from 1.45% currently. This would be on property transfer by deed, excluding controlling interest transfers.
- It cleans up the assessment of sales and use tax on manufacturing equipment.
- It expands the first-year credits for the manufactured homes component of the Affordable Housing Credit from $425,000 to $675,000.
This is a bill to have mixed feelings on because the Lake Champlain Chamber was in support of the second two items and not in support of the first. Our hope is to work with the Senate Finance Committee when it is transmitted over to remove the property transfer surcharge. We believe they may be able to do this for one, or a combination of the following reasons; first, there is natural growth in the property transfer tax due to the hot real estate market we are witnessing; second, this amount of money is relatively small when compared to the massive amount of ARPA dollars the state is receiving and there may be a chance to offset this revenue.
Rep. Heidi Scheuermann of Stowe attempted to make the first case in an amendment offered up on the floor, which did not succeed.
Problematic Unemployment Bill Advances and Stalled by Power Outage
S.10 has made for an eventful week for the Senate Economic Development, Housing, and General Affairs Committee. After passing out of the Committee with no testimony on major components of the bill, the legislation caused a massive backlash and was passed over for a floor vote continually. For more about the history of the legislation and LCC’s take on it, see last week’s update.
On Tuesday, the Lake Champlain Chamber and other partners released a joint statement on the bill and planned media availability for the next day to discuss the bill with reporters. In a flurry of overnight activity, many of those who were planned to speak to the media were invited to testify before the Committee the next day. LCC’s Government Affairs Manager was one of those able to take the unordinary step of testifying on a bill that the committee had already passed and was being considered on the floor. Watch LCC’s testimony here and watch media coverage from Local 22 here.
The final version of the bill includes;
- a five-year $50/week dependent benefit starting at the end of federal enhanced benefits (September 6th),
- a one-year freeze of the tax schedule,
- a one-year freeze on the taxable wage base,
- directs to the Department of Labor to distribute a relief of $66 million (that amount that would be delayed in payment in a one-year freeze) across UI contributions over the next 10 years. This is a false benefit to employers, as the money to pay for it comes from the UI trust fund, which is funded by employers. Additionally, it is unclear how or if this would be implemented.
- A study from the Department of Labor, engaging stakeholders, to come to the correct size of the UI trust fund. We expect this to be taken as an opportunity to further expand benefits.
Unfortunately, the Lake Champlain Chamber cannot support S.10 in its current and latest form. Removing 2020 from the calculation of the Unemployment Trust Fund’s balance size is of vital importance to the employment community and is not accomplished in this legislation. Instead, this legislation creates a new, additional benefit for 5-years for claimants and a false savings for employers, as it will be repaid with money from their own contributions to the Trust Fund. LCC engaged in good faith efforts to come to a suitable agreement.
During the floor debate, Senator Jane Kitchel, Chair of the Appropriations Committee made a strong case that making such dramatic changes at this time to the trust fund is unadvisable and that it might be better to just provide more support to Vermonters with ARPA funds outside of the UI system. Members supporting the bill conceded multiple times during the floor debate that their bill was written and passed out of their committee without consideration to ARPA.
The Senate was unable to vote on the bill due to the power outages across Vermont and adjourned until Tuesday at 9:30 a.m.
H.159, Economic Development Bill, passes the House
H.159, which we covered last week, passed the House this week with a few distinct changes from amendments the money committees put forth. First, to our elation, the tourism marketing dollars were increased from $1 million to $2.5 million by an amendment from the Appropriations Committee. Second, the expansion of Downtown Tax Credits was stripped from the bill by an amendment from Ways and Means Committee. It is their intention to consider these changes in a stand-alone bill, or as part of S.101 when it has made its way over from the Senate (S.101 passed today). Finally, beneficial changes were made to the section of the bill directing ACCD to work with BIPOC businesses. The Appropriations Committee amendment bill also directs some of the General Fund supported programs to be funded by ARPA.
LCC is very grateful for the work of the House Commerce and Economic Development Committee for shepherding this bill to completion and the Administration for putting forward many of these programs.
Federal Business Relief Updates
We wanted to present a quick round-up of the status of federal business relief.
PPP Updates
- PPP is extended! The Senate passed legislation yesterday delaying the PPP application deadline from March 31st to May 31st. This still needs to be signed by the President, however, applications received by the deadline will continue to process into June.
- The program is down to $79 billion, so get after it. Vermont’s SBA office will be working with the Department of Labor and Department of Financial Regulation to get small business owners on Pandemic Unemployment Assistance.
- Important note; If you’ve already had a PPP loan in 2021, with this extension you may be eligible for a second draw.
Economic Injury and Disaster Loan
- SBA says it is increasing the cap on COVID-19 EIDL loans from $150,000 to $500,000. The change will take effect the week of April 6 and if you have a loan already, they will likely contact you.
- Those who received the targeted EIDL advance at a level less than $10,000 are being reached out to by SBA at this time.
Shuttered Venue Operators
- The program will open on April 8th, however, the landing page and forms are available now. We’ve heard it is difficult to fit in many people, however, everybody should try. Take your time on this application, as this program will be difficult or close to impossible to rectify the information. Sign up for updates here.
Restaurant Revitalization Fund
- We are still in a holding pattern regarding the nearly $29 billion dollar program, with some estimates that it won’t be open until May.
- PPP will not count against you in this program, it will from your award, so you should still apply. It is unclear if this program will be able to cover all of the pent-up demand out there, so you should also pursue PPP.
Laundry List
- You can read last week’s update here
- Have an issue our Government Affairs team can help with? Use this tool to schedule a meeting.
- Have vaccine-related employment questions? Vaccines bring about a whole host of new questions employers must ask and contingencies they must plan for. Our Government Affairs Manager Austin Davis sat down with two leading attorneys in the Lake Champlain Region to talk through some of these questions to develop some of your own answers and contingencies. WATCH it here.
- H.171, a bill supporting childcare and putting Vermont on a trajectory such that no family pays more than 10% of their household income towards childcare by 2025, passed the House this week nearly unanimously.
- S.79 was amended on the Senate floor today to include the VHIP program, which was mistakenly taken from the bill when the Senate Committee on Appropriations removed the funding from the program to be considered at another time. The bill also contains a rental registry with a $35 dollar registration fee.
- The Agency of Transportation told the Senate Committee on Transportation this week that Amtrak service between Burlington and New York City is only about a year away. The trip is expected to take about seven and a half hours and will have stops in Vergennes and Middlebury.
- Last week, the Governor turned the spigot to allow bars to reopen and this week Mayor Weinberger shared that the City of Burlington will not add additional regulations to bars as they previously had. Read more via VTDigger
Concerned or need to learn more about anything in this newsletter? Email our team at [email protected].
We look forward to working with you.
Sincerely,
The Lake Champlain Chamber Advocacy Team