Federal Issues Roundup 12/29/2021

Federal Issues Roundup 12/29/2021
  • The Restaurant Revitalization Fund (RRF) was quickly depleted last spring with over 60 percent of applicants in Vermont left without any funding and a hole of more than $120 million in much-needed relief. There is cautious hope for the replenishment of the RRF when Congress reconvenes in January. As a result of collective efforts by state and federal partners, there is a group of bi-partisan Senators working together to assemble a package of relief programs for small business sectors with restaurants as the anchor of the bill.

  • The Occupational Safety and Health Administration (OSHA) issued an emergency temporary standard (ETS) to reduce COVID-19 transmission in the workplace, requiring employers with 100 or more employees to ensure their employees are vaccinated or undergo weekly testing and wear a face covering at the workplace. This requirement was challenged in court, given a brief stay, and then allowed by the Sixth Circuit Court of Appeals, taking full effect in February 2022. Because Vermont is a State Plan state, Vermont has 30 days to adopt a standard that is at least as effective as what is outlined federally.

  • A surprise announcement from Senator Manchin that he would not support Build Back Better has left President Biden’s legacy-defining legislation in limbo. With historic investments in child care, green infrastructure, health care, and affordable housing on the line, the President is unlikely to walk away from negotiations without a last-ditch effort to bring the senator from West Virginia back to the table. But Manchin’s opposition to the Child Tax Credit may be the roadblock that prevents Build Back Better from becoming law.

  • The Infrastructure Investment and Jobs Act, signed into law on November 15, is set to bring a total of  Vermont over the next several years. This will mean big business for Vermont companies working on roads and bridges, power, broadband, water infrastructure, public transit, cybersecurity, climate change resiliency, and electric buses and charging stations. This funding will support the Vermont businesses laying the foundation for our future economy.  

Other Issues 12/29/2021

Other Issues 12/29/2021

Continued Stalemate on Pension Reform
Pension reform for State employees and teachers is back on the agenda, with no clear path forward. The summer study committee was tasked with identifying new revenue sources to permanently address the $5 billion debt that has accumulated and must be paid by 2038. The unions have been clear that they don’t want substantive changes to their benefits and that any solution must have a dedicated revenue source. Given Governor Scott’s opposition to raising taxes, that is unlikely and the committee’s inability to name a tax recognized that political reality. Lawmakers previously set aside $150 million in one-time funds to put toward the pension debt as an incentive to find a solution. Since it’s an election year, it’s likely these funds will be appropriated, and no new tax will be levied, continuing the long-term impasse on this issue.

Will Single Member Districts Gain Traction?
The General Assembly will redraw its boundaries for electing House and Senate members in 2022, using new Census data to maintain adherence to the one person-one vote standard. The Legislative Apportionment Board approved a map for the Vermont House of Representatives, eliminating two-member districts. The Vermont Senate map has not yet been released, but the debate over single-member districts is in play there as well, with many legislators expressing concerns about fairness for their constituents, as well as the unspoken threat to their own electability.

Minimum Wage Is Set to Increase on January 1  
Beginning January 1, 2022, Vermont’s minimum wage will rise to $12.55 per hour, an increase of $0.80 from the current minimum wage of $11.75. Tipped employee minimum wages will rise from the current $5.88 to $6.28 per hour.

Legislative Changes to Unemployment Insurance Could Hurt Small Business Recovery

Legislative Changes to Unemployment Insurance Could Hurt Small Business Recovery

The Unemployment Insurance (UI) Study Committee issued a preliminary report outlining two possible ways to update weekly benefits and funding. Both options would raise the weekly minimum and maximum benefit amounts for claimants. The Committee explored paying for this change by decreasing unemployment insurance contributions by roughly $100 million over 10 years while creating a surcharge directed to a special fund to provide for increased benefits.

The Vermont Chamber has protected the integrity of the UI Trust Fund and will work to secure unemployment insurance rate relief to help Vermont businesses have a safe and robust recovery.

Economic Advancement Through Liquor Law Modernization

Economic Advancement Through Liquor Law Modernization

Last session, a significant liquor law modernization bill was signed into law. There were several provisions that positively impact businesses and serve as economic recovery tools such as a temporary measure to allow alcohol to-go until 2023. While Act 70 signified a major progression, there were important provisions left on the table that the committees of jurisdiction did not have enough time to fully consider. This includes allowing low-alcohol spirit beverages (ready to drink canned cocktails) to be sold by the same retailers that sell beer, wine, and hard cider, and allowing small Vermont distillers to ship directly to consumers. Permitting Vermont distillers to do so would bring Vermont in-line with other states that have already passed a similar measure. Discussions around these provisions will continue this session. Continued adjustment and modernization of alcohol regulatory and financial policies is a priority for both the Vermont Chamber and our partner, Vermont Independent Restaurants. 

Bigotry is Bad for Business

Bigotry is Bad for Business

Last session, the Legislature passed H.439 to address systemic inequities in Vermont’s economy, mandating that the Agency of Commerce and Community Development (ACCD) collaborate with BIPOC businesses and community organizations to develop recommendations on best practices to support BIPOC business development. The report from ACCD is due later in 2022. In the meantime, the Vermont Chamber has been working to center the voices of BIPOC leaders of the business community in discussions around building Vermont’s future economy. Diversity, equity, and inclusion are not just core Vermont values, but also critical to Vermont’s economic health and future.

Proposed Actions from Climate Council Report to be Addressed

Proposed Actions from Climate Council Report to be Addressed

The Legislature and agency regulators will be reviewing the Vermont Climate Action Plan recommendations and possible regulatory changes. Given the labor shortage, it is unclear how this plan could be carried out without addressing workforce shortages first.  The Vermont Chamber supports increased density in downtowns and village centers as part of the climate solution.

Getting Creative to Move the Needle on Housing

Getting Creative to Move the Needle on Housing

While there is universal agreement that Vermont has a housing shortage, how to fix it and where to allocate funds continues to be debated. Recently, Governor Scott requested $80 million in ARPA funds for multiple housing initiatives for the current year budget and another $100 million in ARPA funds for a housing package next year.  The Vermont Chamber has suggested creating incentives for converting empty office buildings into housing in our downtowns and village centers and will advocate for the proposals outlined by the Vermont Futures Project to create workforce housing.  

The Vermont Chamber will also be an active voice in supporting the modernization of Act 250 to facilitate a more predictable and less costly permit process to better enable the development of housing in our downtown and village centers. 

Is There a Fix for the Workforce Shortage?

Is There a Fix for the Workforce Shortage?

Businesses across every sector of Vermont’s economy are experiencing a severe shortage of workers. According to the Department of Labor, there are only about 8,000 unemployed Vermonters and over 20,000 job openings. The Vermont Chamber will lobby for program funding to encourage people to return to work, and to attract more workers to Vermont. Those include:  

  • The Vermont Training Program which gives Vermonters the ability to upskill and enter high-need industries like advanced manufacturing, health care, food systems, and green building.  
  • The RETAIN initiative to help workers with injuries and illnesses stay at or return to work.  
  • CTE programs for high school students and adult learners.  
  • Relocation grants and the Stay-to-Stay program which are even more critical now as the labor shortage puts pressure on an insufficient number of workers. The Vermont Department of Financial Regulation recently released a report quantifying the effectiveness of the incentive programs, further illustrating how these programs are a key component of the State’s strategy to attract and retain new workers. Additional funding for refugee resettlement programs to support the 100 Afghan refugees being resettled in Vermont.  
  • military retirement pay tax exemption to better incentivize military retirees to move to Vermont, increasing the diversity of our communities while also strengthening our workforce. 

In 2022, Money and Politics Combine for a Packed Legislative Session

In 2022, Money and Politics Combine for a Packed Legislative Session

As the Legislature reconvenes in January, the issues are familiar – housing, child care, broadband, climate change, and pension reform. Fortunately, the federal American Rescue Plan Act of 2021 (ARPA) contained significant funding for states to address these chronic issues, with some funds appropriated last year and the balance to be appropriated this year. Yet, there are never enough funds to permanently solve these issues. Even with the ARPA funds being injected into ongoing programs, new tax revenue is already being discussed to sustain this higher level of spending.

Of equal importance are the politics of the session with four seats open in the 2022 election. This legislative session will be packed with leaders jockeying for sound bites as they work to elevate their name recognition to the voters. With nearly a year before the election, Vermont currently has open seats for the U.S. Senate, the U.S. House of Representatives, the Lieutenant Governor, and the President Pro Tem.

The ongoing pandemic also adds another element to this environment, which has caused the Vermont Chamber to invest more resources in advocacy, expanding our lobbying team to five people working on all the issues impacting the business community. Read more about the newest members of our lobbying team here or contact any member of our lobbying team at govaffairs@vtchamber.com.

Vermont Chamber Focusing on Workforce Talent and Growth

Vermont Chamber Focusing on Workforce Talent and Growth

By Betsy Bishop, Vermont Chamber of Commerce

The last two years changed our communities and how we do business. During the Covid-19 pandemic, Vermont businesses rallied, innovated, and pivoted. Still, not every business was able to stay open. And now, as we work to recover from the health crisis and economic downturn, a severe labor shortage spans across every industry.

There is a long road ahead, with business operations and consumer expectations permanently changed. The health of our state’s economy and workforce depends on the evolution of our businesses and continued support from government leaders. In 2022, the Vermont Chamber will focus on the most pressing issue that our businesses are facing: growing and retaining Vermont’s workforce to address our labor shortage.

In every policy discussion, we plan to evaluate the impact on Vermont’s economic and workforce growth. We will continue advocating for continued or increased support for: 

  • Funding training programs and RETAIN 

Training programs like the Vermont Training Program and Workforce Innovation Opportunities Act give Vermonters the ability to upskill and enter high-need industries like manufacturing, information technology, and health care. Vermont is also participating in the U.S. Department of Labor’s RETAIN program to help workers with injuries and illnesses stay at or return to work.  

  • Supporting career and technical education 

We support the Vermont Futures Project recommendation to strengthen the Career Technical Education system so that more high school students can pursue post-graduation career opportunities, including through alternative funding and governance models and integrated academic offerings focused on expanding the workforce supply.

  • Funding relocation grants and programs

The Vermont Chamber has long supported funding relocation grants, and this program is even more important now as the labor shortage puts pressure on an inadequate amount of workers. The Vermont Futures Project identified that Vermont needed 10,000 more workers in the labor force before the pandemic. That number has more than doubled. The Vermont Department of Financial Regulation recently released a report quantifying the effectiveness of the incentive programs, which shows that for every dollar spent by the state on this program in 2019, there was $66.26 in economic activity generated. The Stay-to-Stay program has also proven to be an important component of the recruitment and retention effort as the report further illustrates how these programs are a key component of the state’s strategy to attract and retain new workers.

  • Removing tax on military retirement pay 

In 2022, we will continue pushing for a military retirement pay tax exemption. Better incentivizing military retirees to move to Vermont would increase the diversity of our communities while also strengthening our workforce. 

  • Increasing funding for refugee resettlement  

For years, the Vermont Chamber has supported additional funding for refugee resettlement in Vermont. Welcoming refugees to our state is part of the Vermonter spirit, helps our economy, and grows our workforce when we need it most. 

  • Encouraging second chance hiring 

Employers have worked to reduce barriers to workforce participation, specifically in second chance hiring for Vermonters entering the workforce after struggling with addiction or leaving the corrections system. We need all Vermonters to participate in the workforce, and employers need support to understand the needs of these workers and support them as they return to the workforce.  

  • Supporting child care investments 

A report by the U.S. Chamber showed that, of states examined, losses averaged $1 billion annually in economic activity due to breakdowns in child care. Even before the pandemic, three out of five of Vermont’s youngest children didn’t have access to child care they needed. We will continue supporting investments in child care to make it easier for parents to work and to attract new families to Vermont. Available and affordable child care is not just a business issue – it impacts all Vermonters, and the Chamber will work with partners across sectors to find a sustainable solution.  

  • Supporting new housing

Aging housing stock, tight supply, and rising prices near employment centers have forced people to make difficult choices about where to live and work. We need to increase the overall amount of housing units in Vermont while also focusing on creating housing options for low- and middle-income Vermonters to grow and retain our workforce. 

  • Fostering diversity, equity, and inclusion

The Vermont Chamber is also focused on making Vermont an equitable and inclusive state, where all feel welcome. Doing so is necessary for our state and the only way to attract new residents and workers. 

And Vermont businesses are doing their part. Between the summer of 2019 and the summer of 2021, wages increased by 13 percent, employers got creative to support their staff and keep them healthy and connected, and businesses adapted to improve employee safety with PPE and altered work environments.  

This pandemic is a marathon, not a sprint. Our political leaders helped businesses across the state persevere, but the challenges continue. Political attention to Vermont business issues and aid for them must also continue. 

We will advocate and use our strengths to position Vermont businesses for success. In 2022, supporting our state’s economy and growing our workforce is paramount. 

Betsy Bishop is the President of the Vermont Chamber of Commerce, whose mission is focused on creating an economic climate conducive to business growth while enhancing Vermont’s quality of life. She lives in East Montpelier.