Thank you to this week’s sponsor of our Advocacy Update:
January 15, 2021
It might be lost on people, however, because it is early in the session, we’d like to remind folks that there are 25 standing committees (not including joint or special committees) that can produce over 624 hours of content in any given week. Our advocacy team is monitoring these meetings closely, so we can break it down for you in these weekly updates.
We do our best to put in these updates what is most relevant; however, we can’t include it all. Furthermore, just because the Vermont legislative session starts, doesn’t mean that regulatory proceedings, study committees, federal legislation, or other matters requiring our team’s attention take a break. If you don’t see an issue covered in our update, you should always feel free to reach out to our team at [email protected].
Looking to engage in our advocacy work? Please fill out this survey to assist us and our partners in advocating for you, and don’t forget to register for our legislative breakfast series, as our first breakfast is January 25th.
In this week’s update:
- Join us for our Legislative Breakfast Series
- Biden looks to go big early on federal relief
- VT revenue forecast better than feared
- Governor uses Executive Orders to restructure Act 250 and Public Safety
- Workers’ compensation and unemployment bills moving already
- PPP updates and information
- Laundry list
Join Us for Our (Virtual) Legislative Breakfast Series
The first legislative breakfast is quickly approaching, so please register today. We look forward to everyone joining our team, Governor Scott, and the 16 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
- Monday, March 15, 2021 – 7:30 a.m. to 9:00 a.m. – Special Guests: Lieutenant Governor Molly Gray and Senate President Pro Tempore Becca Balint
Special thanks to the sponsor of our Legislative Breakfast Series:
Biden Proposes More Federal Relief
President-Elect Biden rolled out a $1.9 trillion proposal last night that he asked Congress to act on quickly. This will be the first of two proposals, with the second coming a few weeks into February. This plan includes:
- $1 trillion in direct support via $1,400 tax rebate checks for individuals.
- $400 weekly unemployment enhancement through September (currently this amount is $300 through mid-March). Many Democrats would like to see this tied to economic stabilizers, rather than a date certain, given the experiences of the last year.
- $400 billion for direct pandemic relief such as vaccine distribution, testing, and resources for schools to return to in-person learning within the first 100-days of the new administration.
- $350 billion in funding assistance for state, local, and territorial governments.
- $20 billion for public transit systems.
- Increases the Federal Minimum Wage to $15 per hour and eliminates the tipped minimum wage.
- Requires paid sick leave similar to FFCRA for all employers, regardless of size.
- Expands the child tax credit to $3,000 from $2,000 for each child 17 and younger. Children under age six would be eligible for $3,600.
- $25 billion for a stabilization fund to help open child-care centers.
- $15 billion in grants to support essential workers in meeting childcare costs.
- $35 billion in government funds to leverage into $175 billion in low-interest loans to finance small businesses.
- $15 billion in grants for small business.
- A proposal to use laid-off restaurant workers to partner with federal nutrition programs similar to the “Everyone Eats” program.
Biden’s request to Congress to move on $350 billion (in the past negotiations this was $160 billion) in additional aid to state, local and tribal governments, sets up a familiar fight in the Senate where the now minority GOP, will want to see legal liability relief in exchange for that aid. One thing conspicuously absent from this package that looks a lot like the HEALS Act proposed last summer is a state and local tax deduction (SALT), rumored to not be a priority Biden shares with his party, making the case for states to make use of the workaround Treasury already gave it’s a blessing to.
Things are different now that the Democrats have won the (slim) majority in the US House and Senate giving them the ability to utilize a tool called “budget reconciliation” to sidestep a filibuster and pass these proposals solely with Democrats’ votes (would likely need to drop the minimum wage component to use reconciliation). However, will Biden want to bet big on such a move so early? He says he wants this to be a bipartisan bill, however, it is difficult to see Republicans playing along with the changes they’ve long said “no” to.
There is certainly a lot going on next week in the first week of a Biden administration and the first week the Senate is back: a coronavirus relief proposal, new cabinet appointments, and potential deliberation on articles of impeachment depending on when they are delivered by the House.
Vermont State Revenue and Budget Overview
Things are better than expected, which by no means can be taken to that things are going well in our state finances. In August, our state forecasted that revenues would be down $182 million dollars and that was used to build the FY 21 budget. We are exceeding that amount, however, if we were to see these revenues in any typical year, they would be dramatically below forecast. There is profound uncertainty around revenue forecasting and it is difficult to assess what the impact of all the different relief and stimulus would be.
That said, state revenues performed about $164 million better than expected. Why? The state has received about $5 billion in relief which has been circulating through the economy. If you read our newsletter often, you’ll know that we’ve been highlighting this for some time and it is one of the reasons, aside from supporting businesses, we pushed for CRF dollars to quickly get out in the form of business recovery grants. CRF funding that had strict parameters from the federal government is just now being released to businesses and should have positive state revenue impacts in January through March to land back in state coffers and fund essential services.
There are two “big pressure points” for our state budget at this time, the pensions ($60 million) and State college systems ($40 million). Both come as no surprise, as they have been pressures for the last decade, however, the problems have become more acute in the last two years. Adding to that are increases in state employees’ wages under the Pay Act which account for $18 million.
There will be one-time money coming in – we’re set up for a revenue bump this year and possibly next because of the federal relief, however, structural problems will exist past that federal revenue, setting up the question, should we continue moving forward as normal using these short-term dollars, or should we start planning for what happens after the revenue bump? The worry is that spending expands in such a way that cannot be sustained after this help from the federal government disappears.
Look forward to more on this subject in next week’s update after the E-Board meets.
Governor’s Executive Orders on Act 250 and Public Safety
On Thursday Governor Scott signed two executive orders in his continued trend of rearranging government to find efficiencies and modernize state efforts.
Act 250 Changes
Executive Order 02-21 seeks to professionalize and modernize the Natural Resources Board and its district commissions by reconstituting the current 5-member Board with a chair and two full-time professional members, effective July 1, 2021. Two district commissioners will join the Board to review the major project applications from the region where the application originated. If this proposal seems familiar, that’s because it had been bouncing around the legislature during the entire last biennium and was part of an agreed bill the House had put together to provide increased expertise and consistency, while still ensuring a local voice in the process. Under this structure, the Board will handle all major projects and regional commissions will continue to review minor project applications when a public hearing is not requested, with enhanced policy guidance from the professional board. The Administration also plans to introduce legislation to modernize Act 250.
Click here for details and the timeline for the proposed modernization of the Natural Resources Board.
New Agency of Public Safety
In another action released at the same time, Executive Order 01-21, Scott has created the Agency of Public Safety which will consist of the Department of Fire Safety & Emergency Management, and a Department of Law Enforcement, which would bring the Vermont State Police and Motor Vehicle Enforcement under one roof. The E911 Board, Fire Service Training Council, and Criminal Justice Council would also be brought in under the title of Division of Support Services. The order also would seek to study if and how the Fish & Wildlife Wardens Service, the Department of Liquor & Lottery Enforcement, and other state sworn law enforcement and regulatory operations could eventually be brought under this structure.
Click here for details and the timeline for the proposed Agency of Public Safety.
Part of a Bigger Trend
Senate leaders responded cautiously to the news Thursday. This is not the first time the Scott Administration has proposed reorganizing state government in the name of efficiencies. As reporters from VTDigger reminded us this week, Scott initially sought to merge the Department of Liquor Control, and the Department of Lottery, and was prevented from doing so, only to have the House follow through with the merger on their own a year later.
It’s becoming clear that government reorganization will likely be a forgotten, yet long-lasting legacy of the Scott administration. Last week we reported that as part of Scott’s inaugural address he proposed consolidating all the state’s childcare work under the Agency of Education.
Workers’ Compensation and Unemployment Insurance Bills Already Moving
Senate Economic Development has already taken up and passed out S.9, a bill that extends the previously created and set to expire rebuttable presumption that certain workers who contract COVID-19 did so at work through until 30-days after the end of the state of emergency. There are many first reports of injury within the program; however, not many positive cases, as most cases are not workplace-based. LCC’s team will likely engage on this legislation next week in the House to discuss accommodating for new variables, such as vaccination, moving forward.
In the same committee, S.10 has been brought up and is being discussed to extend measures in Act 91 that are about to sunset related to expanded eligibility for unemployment insurance for situations related to COVID-19. The Committee has been discussing circumstances around reinstating work-search requirements and other changes to the bill around rate relief for employers when their employees have left for COVID-qualifying reasons. The committee will take testimony on this next week; however, it seems that they will leave issues of employer charge relief to administrative rulemaking.
PPP Updates and Information
PPP access is expanding today, with small banks (those with less than $1 billion in assets) able to submit applications for first and second-draw loans. All other banks participating in the program will be able to process loans with SBA starting Tuesday. We recommend tuning into this webinar by the Agency of Commerce and Community Development for more information. Updated PPP Lender forms, guidance, and resources are available at www.sba.gov/ppp.
- Read last week’s update here.
- A new term has brought some changes in the Scott administration staffing. Those can be found here.
- Check out our breakdown of the Consolidated Appropriations Act and what economic relief it contains for Vermont.
- Please take a moment and share with us your achievements in 2020.
- The Vermont House and Senate have passed H.48 – flexibility for municipalities in voting procedures to change their Town Meeting dates and to use mail-in ballots.
- A last-minute change to S.237 (Act 179) last year, had the unintended consequence of widely invalidating deeds as of January 1, 2021. S.14 was taken up by the Senate Committee on Economic Development, Housing, and General Affairs retroactively corrects this problem to more narrowly prohibiting restrictions to achieve the originally intended purpose; deed restrictions that conflict with the accessory dwelling units and small lot provision will be invalidated. Special shout out to Attorney A.J. LaRosa from member business MSK Attorneys for spotting and quickly pushing for this outcome. The Committee is expected to pass this bill on Tuesday.
- The Tax Department Commissioner presented a miscellaneous tax bill that clarifies that the meals tax applies to both the meal itself and any fee charged by the delivery service that stems from a meal delivery platform. A similar proposal has been brought forward in previous years around booking agents for rooms and meals.
- 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. You can watch them present this draft report to the Ways and Means Committee here.
- Please fill out this survey to assist us and our partners in advocating for you.
- Our Advocacy team was in the House Committee on Commerce and Economic Development yesterday for a general check-in and overview of our priorities this year. You can watch that interaction here.
- The Vermont Recreation & Parks Association (VRPA) and the Vermont Arts Council have teamed up with several artists to organize a Zoom meeting on January 21st to discuss the ongoing challenges the Covid-19 pandemic has created, as well as to discuss safe outdoor venues for the summer 2021 season. Register Here.