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LCC Advocacy Update: Week 1, 2021

This Week’s Update Sponsored by; 

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January 8th, 2021 

There is a lot to unpack this week at the national and state level which we cover in a Vermont-focussed way in this week’s update. Be sure to register for our Legislative Breakfast Series as well as the Vermont Small Business Summit we are co-hosting with the Better Business Bureau. Also, we have and will continue to update our advocacy update breaking down the most recent coronavirus relief in the consolidated appropriations legislation

In this week’s update; 

Insurrectionists Storm the U.S. Capitol – Vermont Reacts 

Peaceful protest and freedom of speech are tenets of our democracy; however, that is not what we witnessed Wednesday. When a small minority of insurrectionists attacked the U.S. Capitol, they attempted to derail the democratic process and deprive millions of American voters of their rights. Their actions are a disgrace.  Democracy must prevail, and our country must grow through this. Our thoughts are with our congressional delegation members and their staff who were unexpectedly and unnecessarily put in harm’s way.

Despite their best efforts to thwart democracy, Congress reconvened and certified what we already knew; Joe Biden is the next President of the United States. Governor Phil Scott responded swiftly and was among the first elected officials to call for the 25th amendment to be invoked. On their second day in session, the legislature passed JRH.1 “condemning the storming of the U.S. Capitol on January 6, 2021 as an attack on democracy” and calling for the President to resign or be removed.

Georgia Senate Race Has Major Implications 

What would have been a top headline in any normal time was almost missed during Wednesday’s chaos; Democrats pulled off a two-seat swing in the Georgia Senate Election, giving control of the Senate to the Democrats. 

This a major advantage for a Biden administration, so long as the Democratic Party can remain united, which might be easier said than done. This majority will be slim, requiring the incoming Vice President, Kamala Harris, to potentially cast tie-breaking votes frequently. In the House, Speaker Pelosi will be governing with the slimmest House Majority in modern history of  220-213. Still, it is likely that progressive blocks in the House and Senate will try to pull legislation further left, making it unpalatable for the larger body. Finally, don’t count out now Minority Leader Mitch McConnell’s ability to gum up the works, he’s been around the Hill long enough to know how to do it. All of this basically equates to a divided government, where it will be hard to pass anything except the more moderate proposals, which are seen as favorable to markets and some businesses. 

This also has a big impact on the Vermont Senate Delegation. With the change in Majority, Senator Patrick Leahy is expected to be back as Senate President Pro Tempore and Chair of Appropriations and Senator Bernie Sanders is the likely Chair of the Budget Committee meaning our Brave Little State is steering the most powerful committees. 

Vermont Legislature Reconvenes 

This session starts against a backdrop of Vermont voters sending all the leadership packing, except for the Governor and rewarding moderates in these turbulent times. Also hanging over the first half of this new biennium is the nearly $200 million elephant in the room – the deficit. Vermont is almost hopelessly dependent on the federal government to solve the state deficit if we don’t want to make big cuts or raise large revenues. 

Limited federal relief is coming and more is expected in March. President-elect Biden will likely push a deal through in February or March. Federal dollars will have the most outsized role in the coming session. Despite limited dollars, there will be no shortage of needs. Businesses and nonprofits are still losing revenue due to COVID-19 restrictions requiring more grant assistance, as the last round only covered losses due to restrictions between September and March of last year. 

As we outlined to the attendees of our December Legislative Reception and was repeated by the Speaker and the Senate President last night, expect the legislature to be very focussed on issues with large lobbying efforts already underway, that have become front of mind during the current crisis.  

    1. Childcare – after 6-years of an air-dropped national paid medical and family leave campaign being the sole focus of childcare coalitions’ aim, it seems those who thought the expansion of early childhood education is a more pragmatic use of limited resources can feel vindicated. 
    2. Affordable housing – last session, fresh off the success of a housing bond, legislators wanted to do it again, causing a rift between them and the State Treasurer over bonding capacity. It was back to the drawing board to get at the issue in another way, and the focus became modernizing regulation to lower cost. Some of this work made it across the line, however, much of it did not. 
    3. Broadband – the multi-hundreds-of-millions dollar issue that Vermont has grappled with for years cannot be postponed anymore in the new COVID-economy. Progress on this has been incremental, however, the current occasion calls for it to be sweeping. 

The legislature will reconvene in a remote form (for now) the pace will be slow at first. The biggest question from everyone who needs to observe them while confronting the impacts of the pandemic is; How much of your focus will be confronting the impacts of the pandemic and how much will be regular business? That was the request put to the legislative leaders and the Governor in a letter sent last week by a coalition of business organizations our team helped organize. 

Finally, how will they balance all the needs in front of them? While Montpelier has shown us over the years that they understand environmental sustainability and environmental stewardship, they haven’t quite shown us that they understand economic sustainability and economic stewardship. The pandemic has been a crash-course in not taking the economy and our business environment for granted for many legislators; it’s now clear to many of them that there is not infinite capacity there. Will this translate to better policy? Only time will tell. 

More Guidance for Paycheck Protection Program 

Straight from our inbox to yours; the U.S. Small Business Administration, in consultation with the Treasury Department, announced today that the Paycheck Protection Program will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially, only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.

Read More Here 

There is a steady stream of new information that is available to prepare for the application and you should be reaching out to your Vermont lenders to begin the conversation. For more guidance, you might want to watch this webinar facilitated by ACCD (slides here – it also covered the changes to the employee retention tax credit and FFCRA leave) which provides a great baseline understanding of the changes to the program. 

For more in-depth answers, two PPP IFRs are now available on Treasury’s and SBA’s website;

And PPP Access to Capital Guidance  –

Governor Gives Inaugural Address

Governor Scott’s inaugural address felt a bit less special than a typical address without the pomp and circumstance of the State House. After over 300 days with unprecedented media access to the Governor and his cabinet for two-hour-long press conferences, the address continued the unprecedented access so many Vermonters have come to enjoy. None-the-less, the Governor stuck to his typical moderate and steady tone to deliver a much-needed message of not further burdening businesses already struggling as well as the need for new taxpayers, not new taxes. The Governor highlighted a few upcoming directives and policy priorities which he will provide more detail on in his budget address to the Joint Assembly later this month:

Education and Childcare 

  • Plan to get full in-person instruction, as early as April 
  • Organize all the state’s childcare development work to breakdown silos and bureaucracy
  • A proposal to use the lessons of remote learning to open access for students to take a class from another school in the state that is not offered on their own 
  • Suggested a property tax exemption for pre-k providers

Healthcare 

  • Directing the Department of Financial Regulation to explore what they believe will be over $10 million dollars in rebates to ratepayers. 
  • Continue the work of the the all payer model. 

Keeping Costs Down for Employers 

  • Proposing to reduce the cost of unemployment insurance without impacting benefits to the unemployed by containing any changes in the payroll tax.  

Development and Housing 

  • Expand the use of Tax Increment Financing (TIF); last legislative session, the Administration had put forward “mini-TIFs” to expand the benefits of this tool to smaller communities. 
  • Modernize Act 250 to remove duplication. 
  • Investments to revitalizing older homes to also meet environmental goals 

You can watch the Governor’s address here. You can find the response from Speaker Krowinski and Senate President Balint here

Join Us for Our (Virtual) Legislative Breakfast Series 

Our Legislative Breakfast Series is a staple of each legislative session, providing access and perspective into the inner workings of Montpelier. During these uncertain times, the format has changed, however, our team’s dedication to bringing you this access has stayed the same. We invite you to join us on the following dates

  • Monday, January 25, 2021  – 7:30 a.m. to 9:00 a.m. – Special Guest: Governor Phil Scott  (invited)
  • Monday, March 15, 2021 – 7:30 a.m. to 9:00 a.m. – Special Guest: Lieutenant Governor Molly Gray 

Special thanks to our series sponsor; 

NEFCU

The Most Asked question this week 

What options are available to employees who have a COVID-related absence from work? 

  • The Families First Coronavirus Response Act (FFCRA) created sick leave for employees for six qualifying reasons related to COVID-19, one of which is being ordered to quarantine. More info on this can be found on the DOL website here. The cost of the leave is reimbursed to the employer in the form of a payroll tax credit. The most recent federal legislation amended FFCRA to make it non-mandatory, yet extend the tax credit until March 31st for employers who elect to use it. ACCD will be held a webinar on a number of provisions from the recent legislation today at 3:00; if you want to tune in they should be covering these changes. If for whatever reason FFCRA is not available to you, quarantining is a qualifying reason for the employees to draw unemployment insurance during their leave and those charges should not be held against your employer experience rating. 

What is going on with vaccine roll-out in Vermont? 

  • The Governor recently announced a slight change of course on delivery schedules, with Phase Ia, which involves vaccination of healthcare workers, first responders, and staff of long-term care/residential living facilities currently underway (around 44,00 Vermonters); hopefully/potentially done by the end of January. As originally planned, after Phase Ia comes Phase Ib (likely start of February), when people with high-risk medical conditions. Now Phase Ib will be happening in parallel to a rollout of the vaccine by “age band” around the start of February; in which age or the presence of a high-risk medical condition (defined by a list by the VT Department of Health) will determine when an individual can access the vaccine. Still, Primary care offices are not likely to be delivered to specific age bands until after the supply coming to the state is stronger. 

Laundry List 

  • We have and will continue to update our advocacy update breaking down the most recent coronavirus relief in the consolidated appropriations legislation
  • The Tax Structure Commission has issued its draft report.  After two years of testimony and deliberation, the commissioners (Deb Brighton, Stephen Trenholm, and Bram Kleppner) have honed in on a set of eight recommendations they believe will make Vermont’s revenue system work better for Vermonters. They are soliciting feedback on the draft paper over the next two weeks, from now until January 21. Then they will deliver their final report to the legislature in early February. To read the recommendations and the entire draft report, please click 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.
Sincerely, 
The Lake Champlain Chamber Advocacy Team