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DRM Advocacy Update – Week 7 – 2023

This Update is Created by the Lake Champlain Chamber for Distribution by

February 17, 2023

This week major legislative conversations picked up speed with the passage of a few large initiatives. The legislature is now exactly one month away from the crossover deadline (with a one-week break for town meetings in there), which is their deadline to have legislation out of the committee of jurisdiction. Of course, in the legislature, deadlines are often deadlines to make new deadlines by, and we’ll see if crossover matters much this year.  

In this week’s update; 

Childcare Discussion Picks Up in the Senate 

The Senate rolled up its sleeves and dove into the work of how to reshape and fund an overhaul of our state’s childcare system this week, with work being done in three separate committees. The conversation is taking place within the context of S.56, the Senate’s bill that overhauls early childhood education (ECE). We’ve broken out some of the elements of this conversation below. 

Levers and Decision Points  

  • Revenue – in this conversation around childcare, the source of revenue and the total amount of revenue are often gotten to last. We know from the RAND report that if the state were to go with the “platinum plan,” we’d need to raise about $260 million. What has been proposed in S.56 is about $120 million. At this time, the Governor has identified $50 million in his budget of base funding, and many are pointing towards using the nearly $40 million from the state’s child tax credit passed last year more efficiently by rolling it into childcare subsidies.   
  • Mixed delivery – S.56 would seek to replace our state’s mixed delivery system with full-time, universal pre-K in the public school system for four-year-olds at the low cost of about $20 million to the education fund. This creates a problem for the private market proponents, who will say that children 0-3 are their loss-leaders, and they need the older children to make the books balance. The bill would also amend some of the education funding per-pupil weighting changes made last year to accommodate this change.     
  • Income eligibility – The Senate Committee on Health and Welfare heard from childcare advocates this week that they hope to see subsidies cover up to at least 600% federal poverty level (FPL) in fiscal year 24 and 900% of FPL in FY 25. This is, to a large extent, where the rubber meets the road, as S.56 caps eligibility at 450 FPL, which is roughly $127,000 for a family of four with two earners, and leaves many middle-class families paying for other people’s childcare and unable to access it themselves. 
  • Subsidy Level – the whole goal of the childcare movement you’ve likely seen ads for has been to cap the cost to families at 10% of household income. That’s gone for the most part in S.56, and the bill looks to just add funding to the existing childcare financial assistance program (CCFAP) in a phased approach. 
  • Work Requirement – S.56 would not require a recipient of childcare subsidies to be participating in the workforce. This is a non-starter for many business advocates who were always under the impression that childcare proposals would bring more Vermonters into the workforce. The Rand report stated that the “platinum plan” contemplated would bring between 612 and 2,900 hundred new workers into the workforce.. 
  • Early Childhood Educators – wages in this sector are notoriously low, and advocates want to see any proposal to increase these wages peg it to parity with teachers working in the kindergarten through the third-grade system. Advocates asked this week for ECE workers to be categorically eligible for childcare subsidies. 
  • Credentialling – the RAND report identified increased credentialing as an element of the increased cost of ECE. This has not been a topic of conversation, and all indicators point to this not being addressed. 

Pushing or pulling any one of these levers increases or decreases the price, as well as the workforce impact of a final proposal making the entire conversation a high-stakes calculus optimization problem graded on how the proposal affects the three criteria of availability, affordability, and dependability. 

Unemployment Legislation Takes Shape in House Commerce 

The House Committee on Commerce and Economic Development continued discussion around H.55 and H.92. At this point, the Committee is looking to move forward with H.55 with language that would do the following; 

  • Removes the exemption from offering unemployment insurance that currently exists for nonprofits employing fewer than four employees. The Committee extended the implementation date to July 1, 2024. 
  • The Committee abandoned the language requiring a surety bond of 2% of a nonprofit employer’s payroll. Instead, the bill calls for the Secretary of State to assist the Vermont Department of Labor in an educational effort to explain to nonprofits the pros and cons of their options in the unemployment insurance system. 
  • The bill seeks to address the issues with the existing unemployment system that promoted the discussion around H.92 and requires the Vermont Department of Labor to report back to the legislature next January on the issue. 
  • The bill also updates language in the statute to be more modern and inclusive. 

The Committee hopes to pass the bill next week. 

VEGI Conversation Continues; Counter Proposal Rolled Out  

The House Committee on Commerce and Economic Development continued their conversation this week around H.10, which seeks to make major changes to the Vermont Employment Growth Incentive (VEGI) program that would render it inoperable. The Committee heard testimony from the State Auditor, Doug Hoffer, which was later pushed back on by a former Director of the program as reflecting the auditor’s own political bias rather than that of a rigorous audit of the program. 

The Committee walked through a counter proposal from the current director of the program with the new name “Think Vermont Investment Program.” which would simplify the program by providing an annual cash award of $5,000 for every qualified job created and an enhancement of $7,500 for each job created in economically disadvantaged areas over a period of three years instead of the current five year period. 

The Chair of the Committee and sponsor of H.10 reiterated an unease with the close relationship between ACCD and the program’s governing board, VEPC, indicating that he’d like to see more distance between the two as well as more legislative representation on the VEPC Board. The Committee will pick up the discussion again next week. 

Becca Balint Visits Montpelier, Circumstances Involve a “C” Grade Though 

Vermont’s first Congresswoman was in Montpelier Thursday for a press conference on a recent report by the American Society of Civil Engineers, which gave Vermont a “C” grade on our state’s infrastructure. Balint noted the good work the state has done to deploy federal infrastructure dollars and the work being done by those who work in these areas. Nationally, the average grade is a “C-,” which puts Vermont ahead of our peers, however, it still doesn’t make anyone feel good. The report notes that over the next two decades, the state will need to spend about $2.3 billion to match federal funding that’s available for infrastructure work. Read the report here. 

Lake Champlain Chamber Board Approves Public Safety Agenda 

The Board of Directors of the Lake Champlain Chamber (LCC) voted to adopt Mayor Miro Weinberger’s Public Safety Priorities as the Chamber’s policy positions on public safety at their February Board Meeting. The unanimous vote in favor came after the Chamber convened a Public Safety Committee to review how the Chamber could best utilize its advocacy resources to ensure greater public safety in the region. 

Chamber President Cathy Davis stated that “The Lake Champlain Chamber seeks to create economic opportunities for all Vermonters. We strongly believe that our region must be one where both businesses and residents can thrive and one that is safe and welcoming for everyone. After a thorough review, we believe that moving forward with recommendations in Mayor Weinberger’s public safety priorities is the best path forward to ensure that the greater Burlington area continues to be a safe place that is welcoming for all and one that allows both our businesses and residents to flourish.” Davis continued that “We are aware that there are many organizations and individuals working diligently on the complex issues considered in these recommendations. We look forward to engaging with others and collaborating so that we can move forward on opportunities to improve our systems and infrastructure as they relate to issues of health and safety.”

Mayor Weinberger welcomed the Chamber’s actions, adding that “I greatly appreciate the Lake Champlain Chamber’s willingness to engage the public safety challenges we are currently facing and use their advocacy resources to help move the community forward. I am particularly grateful for the Chamber’s willingness to take a clear position opposing Question 7 on the Town Meeting Day ballot – this is the wrong time for another poorly-planned public safety experiment.”

This move marks a shift in LCC advocacy, which to date has never touched issues around firearms. LCC’s team is getting up to speed on the status of existing gun legislation and will seek to push legislation within the policy framework endorsed by the Board toward passage this legislative session, as quick action is imperative for the safety and continuation of commerce in our region. 

If you have any questions, please reach out to us at [email protected] 

House Committee Passes Paid Family and Medical Leave Bill 

The House Committee on General and Housing passed out H.66 Thursday, which would create the most generous paid family and medical leave program in the United States. The Committee heard a last-minute appeal from the Lake Champlain Chamber to reign in spending and insulate risk to state finances with some of the requests being met. Despite this, the bill is still extremely generous and might create major risks to the state. 

The bill provides employees with up to 12 weeks for their own health, maternity/parental, family care, safe, and bereavement (bereavement would be only two weeks). Employees that have been employed with the same employer for a period of six months, during which time they averaged 20 hours a week, would be eligible. The bill provides a wage replacement of 100% up to the state’s average weekly wage of $1,135 per week. Notably, the bill changes FMLA leave in Vermont to cover any person employing one or more individuals in Vermont. The program would be paid for by a 0.55% payroll tax split between the employer and the employee. 

The Committee heard from the Office of the Treasurer that administering this program would double the size of their office, and they would need upwards of $100 million to stand up the program. The Treasurer’s Office also was granted authority to set the tax rate annually. Historically, the bill would now head to the Ways and Means Committee, however, some are advocating for the bill to be sent to the House Committee on Commerce and Economic Development due to their existing jurisdiction around comparable programs such as Unemployment Insurance and Workers’ Compensation. 

Clean Heat Standard Passed by Senate Committee 

The Senate Committee on Natural Resources and Energy passed S.5 Friday morning. The bill will effectively create a cap and trade system in which all fossil fuels, with the exception of transportation fuels, in the state will need to participate. Under this program, those who import fossil fuels into the state are defined as “obligated parties” and are required to reduce greenhouse gas emissions attributable to the Vermont thermal sector by retiring required amounts of tradeable clean heat credits, which they can either purchase or deliver eligible clean heat measures, to meet the thermal sector portion of the greenhouse gas emission reduction obligations of the Global Warming Solutions Act. 

The legislation is seen as necessary by many due to the passage of the Global Warming Solutions Act, which created a statutory obligation for the state to meet greenhouse gas reduction goals or face potential legal consequences. The fallout of missing these goals would be that state agencies would have emergency rulemaking authority and might resort to draconian measures to meet the statutory obligations. Still, many are disappointed in the program marching forward under the banner of “heating” and “thermal” use while, through its definitions, pulling in all fuels, including “process fuels,” which will add cost to sectors such as farming, construction, and manufacturing. 

The legislation can be read here. 

The Laundry List 

There are many moving pieces, and we do our best to add the ones that don’t get a section in the newsletter yet should be on your radar here. On any given day in the State House, there are about 175 hours of committee time outside of floor time, and then the hallway, cafeteria, or other time spent legislating. 

  • Read past updates here – week 1, week 2, week 3, week 4, week 5, week 6, and the last session’s wrap-up
  • Senate Committee on Economic Development, Housing, and General Affairs continued its work on legislation that will be called the Housing and Opportunities Made for Everyone or HOME Act. As we previously covered, the bill focuses on removing regulatory barriers at the local and state level to make it easier for housing to be constructed. A recent report from VHFA showed the cost of housing jumped an additional 15% last year. The latest version of the bill can be found here. 
  • According to reports from VTDigger and others, TDI is back on the table, which could mean an over $100 million windfall for Vermonters. For those of you who can’t remember that far back, this was an underwater electrical transmission project that was considered about eight years ago that didn’t move forward after New England states found alternatives. Upon Governor Scott’s return from the National Governor’s Association, he shared that there was interest from his colleagues in revisiting the matter. Read more here
  • Recent Deputy Secretary of State and Secretary of State candidate Chris Winters was appointed by the Governor this week to lead the Department of Children and Families. Chris is an experienced public servant, and we’re excited to see him move to this role responsible for some of the most vital improvements needed in employees’ lives.
  • We received word this week that as of February 4th, the Vermont Economic Development Authority’s Forgivable Loan Program is closed. They are currently holding all applications received since then in the queue. The was designed by advocates to assist businesses that are suffering financially from the impacts of the pandemic. The program has $19 million appropriated to it and is now oversubscribed. This took a tremendous amount of work on the part of business advocates to create.  
  • The Greater Burlington Young Professional Community Report is here and some messages came through loud and clear. While we need more single-family homes and a manageable cost of living, there were some distinct changes between this survey and the last. Previously,  “meaningful work” ranked the most important component of a young professional’s job search. This time it was replaced with “compensation.” Additionally, safety is now one of the top concerns for those respondents, and it was listed as one of the top three challenges that a respondent would tell a friend about if they were considering relocating to the area. Despite all of this, 70% of respondents would still refer a friend to move to the greater Burlington area. 
  • Noncompete agreements for the past four years have been a topic of discussion in statehouses across the country, including our own. Now the FTC is looking to potentially ban these agreements and announced a Public Forum on the Proposed Noncompete Ban
  • The Vermont Department of Labor’s 2023 Unemployment Insurance Trust Fund Report is now available and was presented to multiple committees this week.

Hey! You read the whole update. You probably have some thoughts on the content or how we delivered it. Feel free to reach out with those at [email protected]

Bills of Interest Thus Far 

We follow a wide range of bills each session, as any issue that affects the day-to-day operations of our employers warrants monitoring. While many bills are still awaiting release for introduction, here are some on our radar.