This week’s Legislative Update is sponsored by:
May 1, 2020
This week saw the first cracks in what previously was strong solidarity between the Governor’s administration and the legislature. First, there is disagreement over the use of the $1.25 billion in Coronavirus Relief Funds granted to the state under the CARES Act; with the Administration seeking more discretionary funding than the legislature was willing to provide. Second, continued issues with unemployment, which have been a point of contention in the relationship between the two branches of government, turned into a real division this week as legislators launched their own efforts to field complaints and legislative leaders ramped up their criticism of the Labor Department’s handling of the issue. However, backing up and looking at the cracks in context, Vermont is doing a far better job responding to this 100-year epidemiological storm. While other states are seeing armed protest, premature re-opening, and partisan fighting, Vermont continues on in the Vermont way.
One Senator summarized how the week felt as “the days seem to mush together and looking back, I don’t think we pushed anything forward.” One thing made abundantly clear this week is that the legislature is not going home anytime soon. The Senate President proposed that the body consolidate all legislative meetings to two days of the week to stretch resources and allow the legislature to meet through August or even September. He also suggested that the body divides into two groups; one compiling lessons learned from this pandemic that should be built into future policy and budget making and another working on legislation to have in place to be triggered in the event of another emergence after the legislative session ends.
In this week’s update;
- What to know about getting back to work
- State revenues look bleak with federal aid debated and at least a month out
- Vermont hazard pay for frontline employees proposal passes
- Senate’s Workers’ Compensation bill moves to the House
- Unemployment update
- Chamber launches Rapid Response Program
- The Laundry List
Getting Back to Work
Today the Governor continued a two-week trend of opening the economy in a modest, data-driven way. This week’s turn of the spigot entailed an increase in the size of work crews as well as face requirements for coverings for anyone utilizing public transit and clarity around the status of employees traveling into the state to work.
The Governor announced that as of Monday, May 4, already re-opened industries with outdoor work crews and non-essential manufacturing, fulfillment, and distribution enterprise can increase to 10-employees. As of the following Monday, May 11, such employers will be able to increase to full operation. Additional training beyond the recently released VOSHA training will be required and is expected to be available this week.
As a reminder, all of this still is subject to the directives in Addendum 11 to the Stay Home, Stay Safe Executive Order which requires that by May 4th, all employees returning to work according to Phased Work Safe Guidelines, including those already working, must complete mandatory training on health and safety requirements as provided by VOSHA, or another training program that meets or exceeds the VOSHA-provided standard. The Department of Labor has posted training materials in both online and printable formats. LCRCC has provided more information and guidance on reopening your business here.
On Wednesday, Governor Scott, Department of Health Commissioner Mark Levine, MD, and State Epidemiologist Patsy Kelso, PhD detailed a phased-in approach to have the state conduct up to about 7,500 tests per week. The increase will take place in stages over the next month, each expanding on the targeted populations to be tested in an attempt to closely monitor the spread of the virus and provide the data for our data-driven approach to re-opening. Read more about the advances in testing here. Additional symptoms have now been added to the list of coronavirus symptoms that warrant testing.
Maine’s Governor grabbed the attention of many in New England with a three-stage plan to open Maine’s economy over the next 3-months.
State Revenues Look Bleak, Federal Help Debated, Weeks Away
This week, the state’s economist and the joint fiscal office made the rounds to legislative committees with the latest bad news. Revenue and economic forecasting are difficult enough, but adding in epidemiological forecasting makes it near impossible. Behavioral issues such as fear, which we cannot account for necessarily, will also have a tremendous impact on what the economy looks like after COVID-19. You could hypothetically say “everything is open and the virus is gone” and many people might not be so quick to jump back to their usual habits. This is especially true in tourism, hospitality, and leisure which typically see the most spending from age demographics most vulnerable to the virus and therefore will likely be slow to return.
The state’s most recent revenue forecast has us looking at a $144 million revenue downgrade in this fiscal year followed by a $430 million, or 17.4%, downgrade in fiscal year (FY) 2021. While the state’s fiscal office and economists have not begun to calculate it, we should anticipate a smaller yet still substantial downgrade in FY22. The Vermont legislature will take up the work of an FY19 budget adjustment next week to hopefully finalize by the middle of May. Once that process is complete the legislature will create a budget for the months of July, August, and September. Finally, the remaining nine months of the state budget will be completed at the end of the summer when there is a clearer fiscal picture.
The most daunting hole right now seems to be in the education fund, where if we do not fill the hole from trust taxes (rooms and meals tax, sales tax), we’d see the equivalent of upwards of 23 cent increase in the property tax rate. The Chair of the House Ways and Means Committee brought forward a proposal this week which would increase property taxes to the level required to fill the hole and then use a portion of Vermont’s allocations from the CARES Act to offset the increase in education property taxes by providing taxpayers with a flat credit per parcel of taxable property. The Administration is not certain that funding from the CARES Act can be used for this purpose.
Vermont, of course, is not alone in these troubles. According to a report released this week, the country should expect a cumulative $500 billion in state budget shortfalls over the next three years. Needless to say, the problem is going to require serious federal help and many of the nation’s governors have called for Congress to commit another $500 billion in federal aid to the states to pay for the unplanned costs and backfill tax revenue losses brought on by the pandemic. This request has caused contention between Democrats and Republicans in Congress as each party drafts proposals for the anticipated next round of federal coronavirus relief legislation. The next proposal will likely start in the House and Speaker Pelosi has been sympathetic to these requests, however, new legislation shouldn’t be expected to be passed until mid-to-late May. Most congressional observers expect at least another trillion dollars in the next few months.
While the applications for the Paycheck Protection Program (PPP) have re-opened, many of the known issues LCRCC and other advocates have called attention to in the program have not been resolved. This week, Vermont’s Congressional Delegation sent a letter to Steve Mnuchin, Secretary of the U.S. Treasury, requesting greater flexibility in all aspects of the PPP program. While Vermont has received a great deal of aid from the PPP, the legislature’s economist pointed out this week that leisure and hospitality received only 9% of the funding from the program, despite being one of sectors most affected by the pandemic.
There are certainly gaps between the programs available to small businesses in Vermont, with neither the Paycheck Protection Program, Economic Injury Disaster Loans, nor Pandemic Unemployment Program accommodating the needs of some businesses. The Agency of Commerce and Community Development has been working on a Re-Start Vermont Grant Program which would aggregate $15 million in unallocated loans throughout the state centrally with a common application. The hope would be to allocate loans that can convert to grants of up to $20,000 dollars with potentially larger grants for those that took at least a 75% hit in revenues.
LCRCC is hoping to better understand the size of the gap so we can best help the business community. Please complete this survey so you get the most relevant assistance and resources.
Vermont Hazard Pay Program Passes the Senate
Work has been completed on a plan that would send a $1,000 monthly grant to employees making less than $25 an hour at essential employers who meet criteria to show that they are at greater risk of contracting COVID-19. This program is intended to remedy the issue created by the Pandemic Unemployment Compensation program which adds an additional $600 on top of the state’s unemployment benefit resulting in many employees making less by staying at their job than if they left.
The program was planned to be a three month, $90 million program, however, it was cut to two months and $60 million. The Senate Committee on Appropriations made the deliberate move this week to add the word “hazard” into the bill so that CARES Act Coronavirus Relief Funds could be used to pay for the program. The Administration is not certain that funding from the CARES Act can be used for this purpose.
The bill also urges municipalities who receive funding from the CARES Act to utilize a portion of the funding to provide some kind of monetary benefit to municipal employees whose jobs placed them at an increased risk of being exposed to or contracting COVID-19 during the program period.
As of this week, 30 million Americans have now sought unemployment benefits and the numbers are still growing. In Vermont, more than 81,000 Vermonters, or nearly 1 in 4 workers in the state, are receiving unemployment benefits this week. The Vermont Department of Labor announced Wednesday that it has provided more than $24 million in direct deposit payments to about 8,500 Vermonters through the newly created Pandemic Unemployment Assistance (PUA) program.
The PUA program is an entirely federally funded program and can hopefully provide substantial relief for small business owners who were not able to receive a PPP, EIDL, or private loan to help them through this turbulent time.
The Vermont Department of Labor released guidance this week on potential refusals to return to work that can be found here.
Senate Passes Workers’ Compensation Bill
On Monday the Senate passed S.342, creating a rebuttable presumption that if certain employees contract COVID-19, it was due to workplace exposure. At this point, 12 states have passed rebuttable presumptions for COVID-19. Similar legislation was blocked by a judge in Illinois this week. The change would apply between March 1, 2020-January 15, 2021. However, the bill contains language voiding the presumption if a worker is offered a COVID-19 vaccine and refuses it, a solution which is by most estimates at least 18-months away, leading many to believe that drafters may intend to extend the provision. The bill will now go to the House for consideration.
LCRCC raised concerns about this approach and weighed with a request that workers’ compensation be the remedy of last resort as the FFCRA sick leave benefits which were established and are paid for federally would be a better remedy for individual employees, employers, and the state economy in 80% of COVID-19 cases.
Chamber Launches Rapid Response Program
The Lake Champlain Chamber is here to support you during this uncertain time. We know your business is working hard to understand our rapidly changing environment as we all try to navigate the impacts of the COVID-19 crisis. Our Rapid Response program will provide guidance for employers so businesses like yours can comply with frequently changing rules and regulations.
Whether you are a small business owner wearing multiple hats, or have a team of hundreds, we are proud to provide resources you can depend on. If you are unsure about developing regulations at the federal, state and local levels or have a question on best practices as you reopen your business; we are available to help you navigate the crisis.
The Laundry List
- The House Committee on Commerce and Economic Development continued work on a bill this week that would assist manufacturers in quickly increasing capacity or pivot production to create necessary items to combat COVID-19. The program would provide $20,000 in grant dollars to assist in these efforts. A draft of the proposal can be found here. Members of the committee questioned if this effort would be too little too late, as many Vermont manufacturers have already undertaken these efforts and such a program couldn’t feasibly be active until June at the earliest.
- S.333, a bill preventing foreclosure eviction moratorium across the state for the duration of the COVID-19 state of emergency, and 30 days after, passed the House this week. We’ve covered this bill extensively in past legislative updates and it has changed little since. A summary of the bill can be found here.
- S.182 also passed the House this week and would loosen licensing requirements during the pandemic for workers like plumbers and electricians, as we had previously reported. This bill will now head to the Governor’s desk for signing.
- In a recent report card delivered to the Vermont Department of Environmental Conservation (DEC), the U.S. Environmental Protection Agency (EPA) applauded Vermont’s progress toward reaching Lake Champlain cleanup goals. Read more here.
- Farmers’ markets may open after May 1st using limited in-person operations under detailed guidance from the Agency of Agriculture, Food, and Markets. Vendors will need to significantly alter their business practices and use a “pre-order, local food pick-up” model to eliminate crowds and reduce contact with customers.
- ACCD wants to hear from all Vermont businesses impacted by the response to the COVID-19 virus. Please share these impacts via the ACCD Business Impact Form, which will help us assess the full impact as we work toward solutions.
- The LCRCC COVID-19 Resource Guide can be found here.
Concerned or need to learn more about anything in this newsletter? Email our team at [email protected].
We look forward to working with you this session.
The Lake Champlain Regional Chamber of Commerce Advocacy Team