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Legislative Update – Week 20

This week’s Legislative Update is sponsored by:

May 29, 2020

Legislating via Zoom is taxing as legislators and lobbyists tend to be social people who enjoy that the Vermont State House is a high-speed environment.  Technical difficulties resulting in the cancelation of committee meetings on Thursday really drove home the reality of the new environment while creating frustration and questions about transparency.  

This week foreshadowed future shake-ups in the State House, with the Chair of House Appropriations announcing her departure, both of Burlington’s South End seats being vacated by their long-time occupants, as well as many other notable departures.  The last few weeks have also brought big announcements in the Chittenden County Senate race as two seats will open up for the first time in quite a while.  And then there is an odd set of circumstances around our Gubernatorial election necessitated by our current state of emergency, with Governor Phil Scott announcing he will seek re-election, but will not solicit campaign contributions, hire campaign staff, or campaign in other traditional ways until the state of emergency is lifted.  For all candidates this year, campaigning will look nothing like it has in the past. 

Find candidates who have filed with the Secretary of State here.

At the Chamber, our own President and CEO at LCRCC, Tom Torti, announced his plans to transition leadership to our Executive Vice President, Cathy Davis, while focusing his attention over the next few years on the Chamber’s foundation.  The move is long-planned and will serve the Chamber and the region well. 

And finally, legislative consideration of the emergency relief package proposed by the Governor has put on full display how close to the edge many Vermont businesses are after months without income during what for many are the months they make the majority of their income.  If you have not asked your legislators to quickly pass the Governor’s economic relief package, please do.  You can find your representatives and senators here

In this week’s update: 

More Turns of the Spigot 

Today, Governor Scott announced, in addition to existing health and safety requirements for all businesses, new guidance from the Agency of Commerce and Community Development which will allow for close contact businesses to re-open.  These include gyms, spas, fitness centers, massage therapists, and similar businesses, as well as interior maintenance may reopen with guidance on June 1st.  Additionally, retail restrictions will be applied to museums, galleries, libraries, and similar entities which will be allowed to open June 1st.  

Children’s overnight summer camps will be allowed to accept out-of-staters with quarantine requirements developed by the Department of Health.  Lessons learned within this narrow sector of hosting out of state guests will serve to inform how to move forward with lodging.  For the Governor, how our neighbors are doing is important due to the fact that 41% of all confirmed cases in the United States are within a five-hour drive of Vermont borders. 

Group gatherings will go from 10 to 25 on June 1st.  This pertains only to events such as cookouts or family gatherings, and private events, not retail or public events. 

All of these updates can be found here.  Reopening plans for the Department of Motor Vehicles are coming Monday.  The Governor is hopeful that an announcement about a timeline for allowing limited indoor dining will be forthcoming soon.

State Budgeting 

It would seem that the $1.25 billion in CARES Act Coronavirus Relief Fund (CRF) money is completely subscribed, if not over-subscribed.  The two big-ticket items that take up the bulk of the funding are the Governor’s proposed two-phase economic relief package at a price tag of $400 million and a cash infusion for the Vermont healthcare system of about $300 million to for dentists and mental health care providers that could be used to cover COVID-19 related lost revenues and expenses incurred.

The Appropriations Committee continued work on the first quarter of the FY 21 budget this week and received the news from the legislative economist that the latest forecast shows a $230 million problem for FY 2021, an improvement due to people paying taxes.  The state expects about 95%, or about $129 million, of the $136 million in deferred taxes to come in.  That will leave around $24 million after paying the $104 million to get FY 2020 in balance and $24 million to be applied to FY 2021 first-quarter budget.  The committee decided for the FY 2021 first-quarter budget to appropriate 25% of the FY 2020 budget to avoid programmatic changes.  The FY 2021 first-quarter budget bill will need to appropriate $34.45 million from the CRF to accomplish that.

Legislative committees are looking for money to close gaps in revenue with new revenue.  The Ways and Means Committee has expressed interest in a COVID-19 sales tax surcharge, creating an internet service charge, a candy tax, and a tax on luxury clothing.  This week, the Chair of Senate Finance cited increased constituent requests to “tax the rich”- a proposal that the committee might seriously consider.  However, that might not yield the results desired, as columnist Art Woolf outlines in his recent column.  According to Woolf, Vermont doesn’t really have rich people, those people already are responsible for half of the personal income tax the state collects, and due to the structure of unemployment, these income brackets will show the most dramatic drop in income this year.

Economic Relief Package 

Last Wednesday, Governor Scott proposed a $400 million economic relief and recovery package, using federal CARES Act funds.  The two-phase proposal will start with $310 million for immediate relief to the most impacted sectors and businesses to be followed by $90 million for long-term recovery efforts.  The House and Senate economic committees began reviewing the proposal in more detail this week.

We encourage you to register your support for business recovery assistance.  You can find your representatives and senators here

ACCD hosted a series of webinars over the last week to explain the proposed $400 million economic relief package and answer questions from impacted sectors.  Recordings of those webinars will be posted to the Recovery Resource Center as they are available, for anyone who may have missed them live.

In addition to advocating for the proposal, you can make sure you are ready to capitalize on it in the event the legislature passes it by making sure you have a myVTax account and are up to date on filings.  Failure to pay taxes won’t disqualify you, however, you will need to have filings up to date and be on some sort of payment plan.

PPP Flexibility Act Passes the House, Heads to Warm Reception in the Senate  

This week marks eight weeks for some of the earliest Payroll Protection Program (PPP) recipients, an occasion that is sure to be marked with stress as they try to navigate forgiveness with rules ten times longer than what was on their original application.

Yesterday, the US House easily passed the Paycheck Protection Program Flexibility act by a vote of 417-1.  The legislation extends the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks as well as extending the deadline for rehiring workers from June 30 to the end of this year.  Another welcome portion of relief is the changing of the ratio of payroll to expenses from 75:25 to 60:40.  For those who are seeking new PPP loans, the length of the terms of the loans will move from one year to five years.  Businesses who receive money under the program would also be able to defer payroll taxes. 

The bill now heads to the Senate where there seems to be warmer reception for it than when the massive and controversial HEROES Act contained these changes, as we outlined extensively in last week’s newsletter.  We’d suggest that if you don’t have a PPP you consider getting together what you need for an application now, as there will be a run on both applications and money if this bill gets through the Senate.

Restaurant and Retail Relief 

LCRCC asked the legislature, as you should too, to put into statute the temporary changes that allowed the delivery and to-go distribution of alcohol, as we realize this will need to be a component of the business model for Vermonters for some time to come. 

Sign the petition.

In these uncertain times, Vermont businesses need as much certainty as we can provide. The new flexibility from Directive 4 to serve alcohol by curbside and delivery methods has provided a needed source of revenue for our struggling small Vermont businesses.  As these businesses look forward and plan for the coming months which will be filled with great uncertainty, it would be helpful to know that they can depend on the flexibility afforded to businesses under the Governor’s Executive Order and incorporate it into their business model.

ACCD worked with VTrans to provide guidance on the use of public rights of way for restaurants and retail businesses.  The guidance lays out considerations and steps to ensure social distancing to enable a wider restart of retail operations and restaurants, in a way that does not increase the risk of auto-related injuries, addresses pedestrian safety and accessibility, and shares items towns and businesses should consider when using the street during these times.

The Laundry List

The Laundry List 

  • On Tuesday, LCRCC hosted a webinar with special guests Sheehey Furlong & Behm to provide an overview of the Families First Coronavirus Act (FFCRA) and its interaction with other state and federal programs. You can watch a recording here
  • The weekly claims report indicates that for the week ending May 23, 2020, the Department processed 1,552 Initial Claims, down 647 from the previous week but 1,122 more than the same time last year. Total new and continuing claims are 51,837, a decrease of 5,465 from the previous week and 48,204 more than the same time last year. Read more here
  • Those who loyally follow our newsletter will remember we predicted a combination of an increase in jobs going entirely remote and the new-found distaste for urban life during a pandemic would drive new people to Vermont. This week saw widespread reports of just that. 
  • Governor Phil Scott and Department of Financial Regulation (DFR) Commissioner Michael Pieciak today announced the approval of a premium relief plan submitted by Northeast Delta Dental, Vermont’s largest provider of dental benefits. In total, $2.89 million in premium relief will be provided to approximately 70,000 Vermonters after the suspension of most dental services due to COVID-19.
  • VTDigger is reporting that due to COVID-19, the governor’s paid leave program for government employees is also being postponed because the state couldn’t find a vendor to institute the program in time. 
  • South Burlington voters overwhelmingly rejected by a margin of 64.5% to 35.5% a second school budget this week which would have increased taxes by 5.91%. Over town meeting week, the district rejected their first budget by a vote of 57% to 43% a budget close in size that also included a $210 million bond that would have increased taxes by 11.2%.  
  • Read last week’s newsletter 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.
Sincerely, 
The Lake Champlain Chamber Advocacy Team

Man with white shirt and black sports jacket
Tom Torti, President
headshot of lake champlain chamber president cathy davis
Cathy Davis, Executive Vice President
Austin Davis headshot
Austin Davis, Government Affairs Manager
Thank you to this week’s sponsor of the Legislative Update: