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LCC Advocacy Update: Week 3, 2021

Thank you to this week’s sponsor of our Advocacy Update:

January 22, 2021

We have a new president, a new tone from the top, and a new take on the next four years. Immediately, starting Wednesday, we saw a difference with just a few executive orders making a mountain of change. Here in Vermont, our legislature has kept its focus on responding to the pandemic, however, we are beginning to see the first signs of mission creep. 

In this week’s update; 

Join Us for Our (Virtual) Legislative Breakfast Series 

The first legislative breakfast is quickly approaching! We look forward to everyone joining our team, Governor Scott, and the 22 elected policymakers who have already RSVP’d. 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 – REGISTRATION CLOSED  
  • Monday, March 15, 2021 – 7:30 a.m. to 9:00 a.m. – Special Guests: Lieutenant Governor Molly Gray, Senate President Pro Tempore Becca Balint, and Speaker of the House Jill Krowinski. 

Special thanks to the sponsor of our Legislative Breakfast Series:

State Finances and Budget 

Twice a year, the Emergency Board, or as it is called E-Board) meets to officially adopt a consensus forecast of revenues created by economists representing the legislature and the administration. Their report can be found here. As we expected and foreshadowed last week, things are looking better than we worried in the past six months. They are not great; as Jeff Karr put it, “if I was giving you this update in a normal year, we’d be looking at a 5-alarm fire.” Total revenue in all funds is now expected to be only $20 million below pre-pandemic FY21 estimates and $77 million above FY 22 estimates from August. As we’ve said time and again; all of this is artificial economic activity spurred by the nearly $5 billion in federal assistance the state has received and does not mean that the businesses and people of Vermont have fared well as they operate at reduced capacity due to the pandemic. Furthermore, while the near future of our state’s financial health looks fine due to federal assistance, a great deal of uncertainty exists around the years to come. 

All of this sets the stage for the Governor’s Budget Address on Tuesday at 1:00 p.m.(watch here) in which he will provide more details on some of the proposals from his Inaugural Address as well as a few other proposals not yet public. Meanwhile, work is well underway to move the Budget Adjustment Act (BAA), an annual occurrence to adjust the current fiscal year’s spending. Among the items in this BAA, LCC hopes to see a recently proposed Gap Economic Recovery Grant Program for businesses that have for one reason or another not been able to receive any economic assistance yet; we describe it later in this update. The Vermont House Committee on Appropriations is seeking public input on the Governor’s Recommended FY 2021 Budget Adjustment and will hold a public hearing on Monday, January 25, 2021, from 12:00 p.m. to 1:30 p.m. Learn more and sign up to comment here

The often unsung heroes of our state are working hard to unravel the massive matrix of crisscrossing regulation and rules around the federal funds provided to the state from the CARES Act, the recent Consolidated Appropriation Act, and other funds, including those made more recently available through Biden Administration executive action. It will take some time for the revenue picture to become fully clear as everything develops. For example, Executive action this week will allow our state to have greater bill-back authority to FEMA for things we’ve already spent or are spending CARES dollars on. This may seem like a minor change to you and me, however, this could mean a complete reshuffling of current spending to free up CARES CRF dollars to go to other pressing needs. 

New Business Relief 

The Agency of Commerce and Community Development rolled out a plan to deliver $10 million in what they called a Gap Economic Recovery Grant proposal in the BAA. The program is designed to cover businesses that were ineligible or received only partial funding from the PPP or EIDL grant program, prioritizing businesses that were established after February 15, 2020, frozen out of many programs. The proposal, unfortunately, received a skeptical reception in the House Commerce Committee due to timing among other issues and ACCD will make their case to the Senate Committees. If you are a business owner that would be aided by such relief, contact our advocacy team.

Federal Update 

It seems that the relief package we covered last week is already slowing down. Many Democrats wanted to jam through the legislation using the “budget reconciliation” tool, however, the Biden Administration is tapping the brakes in hopes of building bipartisan consensus. This also might be part of the reality that some in the press have conceded; that the party was caught flat-footed by sweeping the majority, and they don’t necessarily have the planning necessary to handle an impeachment trial, more cabinet nominations than you would typically see at this time, and a large spending bill. In the interim, Democratic leadership might go for a small win for congress to bond over by passing relief checks among other provisions and then focus its immediate energy on a three-day impeachment trial and cabinet confirmations.  

How long will the bipartisan attempt last? One interesting indicator comes from our very own US Senator Bernie Sanders who due to the flip in the Senate is now the very powerful chair of the Budget Committee. While many might have been focused on his continued contributions to the meme world thanks to his very Vermont Burton coat and upcycled mittens, our advocacy team was paying attention to what he was saying. When asked when his committee might get to the OMB nominee Neera Tanden’s confirmation process, he responded that he was unsure and “right now what I’m working on as we speak is reconciliation.” Sounds as if the Senator has other plans that don’t involve waiting for the exercise in unity to play out. 

Also this week, Vermont’s Senior Senator stepped back into a familiar role that puts him third in line to the Presidency. Hours after the inauguration, Senator Leahy was sworn in by Vice President Kamala Harris as the Senate President Pro Tempore. In addition to this distinguished position, the Senator is the Chair of the Appropriations committee. We know we’ve highlighted this before, however, it just bears repeating, as so much power at the national level is held by our Brave Little State. 

Transportation Demand Management 

Always be suspicious when someone has to mandate that you accept something for free. H.94 was introduced this week which among other things would mandate employers with more than 50-employees that provide free or subsidized parking for employees in a facility that is owned or rented by the employer is required to maintain level-2 chargers at 6% of all parking spaces available to employees. The bill sets up a grant program to pay for the charging installation, begging the question; why do you have to mandate it then? In this economic climate, no business would turn down a state grant to make improvements to their business and meet our climate goals if they can. 

LCC will engage with the Committee on this bill when it comes up and make this case; requesting that a mandate be dropped and the grant program is kept. We will make abundantly clear that we will partner with the state to advertise any such grant program if it were to be developed. 

Aside from this, the bill includes many other provisions, some of which LCC can support and others we believe are an overreach at this time. What do you think of this list? 

  • Required under the Residential Building Standards electric vehicle supply equipment be added to new construction 
  • Mandates all public transportation vehicles bought by 2022 be electric 
  • Establish and appropriate money for expansions of the New PEV Incentive Program to also include the Replace Your Ride Program and incentives for motor-assisted bicycles
  • Require certain employers to establish a transportation demand management plan

LCC Files Comments on Tax Structure Commission’s Draft Report 

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. 

  1. Restructure the homestead education tax 
  2. Broaden the sales tax base 
  3. Modernize income tax features 
  4. Undertake analysis in order to eliminate tax burden/benefit cliffs 
  5. Improve administration of property tax 
  6. Create a comprehensive telecommunications tax 
  7. Utilize tax policy to address climate change 
  8. Collaborate with other states so each state can build a fairer, more sustainable tax system

They will deliver their final report to the legislature in early February. To read the recommendations and the entire draft report, please click here. You can watch them present this draft report to the Ways and Means Committee here

Read LCC’s comments here. We welcome any feedback you have as we will likely be engaging on these issues in the legislature in the coming weeks.

Rough Road Ahead of Act 250 Executive Action 

It would seem that the two branches of government cannot agree on how to disagree…. When the Governor rolled out his Executive Order last week to reorganize the Natural Resources Board that administers Act 250 we knew things wouldn’t be simple or straightforward, however, the events of this week have given us a perspective on how chaotic things can get between now and the April 15th deadline. The legislature began reviewing the Governor’s Executive Order this week and things quickly turned into a larger discussion around the authority of the Executive and Legislative branch that have rattled some basic assumptions. 

The Committees were told by their counsel that either the House or Senate has 90 days to void the order if they so choose. State statute does require either body to veto the Executive Order, however, the Governor’s Executive Order states that the House and Senate would need to void the order. On Thursday General Counsel from the Governor’s Office told a Joint Committee that they consider the state statute to be unconstitutional, citing a U.S Supreme Court case; presumably (not confirmed) INS v. Chadha, 462 U.S. 919 (1983) which found a single-body veto was a violation of the separation of powers provisions contained in Article I of the Constitution, requiring exercises of legislative power in such situations be subject to the bicameral action. 

Meanwhile, a Bristol-based attorney has reportedly filed a suit challenging the constitutionality of the action and questioning the authority of the legislature to veto executive orders. Judging from the initial reception of this order, it might be safe to assume that this will be anything other than a straightforward discussion that might last past the April 15th deadline and close to the July 1st effective date.  See a side-by-side of the changes the Executive Order would make here.

Laundry List 

  • Looking to engage in our advocacy work?  Please fill out this survey to assist us and our partners in advocating for you
  • Town Meeting TV and Seven Days are teaming up to host a virtual election forum with Burlington mayoral candidates on Friday, February 5, from 5:30 – 7 p.m. Learn more here. 
  • Unfunded Liability – On Friday, Treasurer Beth Pearce released a report outlining cuts that will likely need to be made to the state pension system which has a ratio of fund contributions to benefits collected which are quickly approaching 1:1. The unfunded liability in the state employee fund (VSERS) increased by $225 million from FY21 to FY22 and needs $36 million in payments from the state to stay on track. The teachers’ fund (VSTRS) increased by $379 million and needs $60.6 million. 
  • Businesses can learn more about First and Second Draw loans at the SBA website. At the Governor’s press conference this week, a presentation offered additional insights into the program. Businesses can view that presentation at the ACCD COVID-19 Recovery Resource Center.
  • The Vermont House and Senate have passed and the Governor has now signed H.48 which gives flexibility for municipalities in voting procedures to change their Town Meeting dates and to use mail-in ballots. 
  • The Legislative Tourism Caucus now has a Youtube Channel where you can stream their weekly meetings. Follow this link Fridays at 8:00 a.m. to join or see archived meetings. 
  • The Chair of the Senate Committee Economic Development, Housing, and General Affairs is interested in pursuing a housing bond again. What are your thoughts on this?  
  • ACCD has allocated $1.6 million to Southeastern Vermont Community Action, the Everyone Eats Program Administrator, to relaunch the program. Though this allocation only funds three weeks of programming, partners across the state including the Scott Administration and the Legislature are working together to identify additional funding opportunities. In 2020, Everyone Eats funded over 530,000 meals, injecting $5.3 million into local restaurants and nearly $500,000 to Vermont farms and food producers.
  • A report required under Act 62 asked a Commission to consider a number of ways to help Vermont achieve its energy and climate goals. The report concludes that more funding is needed and suggests that it should come from pricing on unregulated fossil-fuel sources—fuel oil, propane, kerosene, and other dyed diesel fuel. The report concluded that one of its main exploratory charges, the creation of an All-Fuels Efficiency Entity is not needed. The report can be found here. 
  • Did you miss the Shuttered Venue Operators Grant webinar on January 14, 2021? It’s been recorded and currently available on SBA’s YouTube channel. Watch this archived webinar for a preliminary overview of the Shuttered Venue Operators Grant program included in the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act signed into law by President Trump on December 27, 2020. Watch now.
  • Researchers at the University of Vermont are conducting a survey to study how Vermonters as well as out of state residents that recently traveled to the state are understanding and responding to Vermont’s Covid-19 guidelines. Complete the online survey and be entered to win one of ten $25 gift cards to a local Vermont business.

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