Amy Spear

Vermont’s housing crisis continues to be a focus of concern in communities, businesses, and the media. With crossover weeks away, the Senate Economic Housing and General Affairs Committee needs to take on this sense of urgency in review of their Omnibus Housing Bill. In the Committee’s sole morning of hearings on the 66-page S.226 this week, they reviewed a limited number of the proposals. The Vermont Chamber is supportive of provisions in this bill that have been included in the Governor’s budget that will expediate the increase the supply of affordable middle-income homes, such as the Homeownership Development Program.  The Governor’s $70 million housing budget includes this program as well as the Vermont Rental Housing Incentive Program which is part of the Senate-passed S.210, currently sitting idle in the House General, Housing & Military Affairs Committee.

The Senate Economic Housing and General Affairs Committee Chair is in conversation with the Chair of the Senate Natural Resources and Energy Committee, which has been working on a housing and Act 250 proposal, on what will happen between their two bills. Both include provisions originally proposed in H.511 to expand access to the Neighborhood Development Area Designation and the Act 250-exempt Priority Housing Project program. The bill under consideration in Senate Natural Resources and Energy Committee would also expand the jurisdiction of Act 250 with the creation of a new Road Rule. Administration officials stated again this week that the Governor won’t support the bill as is. The Chair does not seem ready to give up on this committee bill and is looking for a path forward.

Details on the formula and process for providing more grants to business are nearly complete with the total appropriation still in question. This program was approved last year to provide $30 million in grants to businesses impacted the most by the pandemic – lodging, restaurants, wedding venues and other places where people congregate. The formula and criteria for awarding these grants was problematic, leaving $26 million still available. The Vermont Chamber is supporting a new effort to deploy these funds which would provide a VEDA loan that could be converted to a grant quickly, allowing more businesses to access relief faster, without taking on more debt. The Vermont Chamber is fighting to transfer the remaining FY2022 appropriation of $26 million to this effort. These issues will be finalized over the next few weeks.

As the House and Senate work on their respective economic development bills, details are emerging on the workforce investments that the Vermont Chamber has been advocating for, including relocation incentives, the redeployment of economic recovery grants, and investments in the CTE system. H.703 includes $35 million for CTE facilities upgrades to expand course offerings, and the Vermont Chamber is advocating for the House Commerce and Economic Development Committee to adopt the Governor’s full agenda on CTE, including $10 million for facilities upgrades, $10 million to reduce the education costs for students, and marketing to end the stigma of the CTE path. The House is also considering increased funding for refugee resettlement and incentives to keep older Vermonters working. The Senate has focused their work on S.263 which includes $6 million for new relocating worker incentives and a marketing effort to encourage people to move to Vermont.

• Child Tax Credit: H.510 passed the House and now heads to the Senate for review of the $50 million Child Tax Credit proposal.
• Workers’ Compensation: H.559, which updates the annual rate of contribution for workers’ compensation from the current 1.4% to 1.5% in 2023, was passed by the House and now goes to the Senate.

As anticipated, S.210, which contains a short-term rental provision, passed the Senate this week. To craft a bill that could gain the Governor’s approval, several exemptions were added, including an exemption for properties rented for fewer than 90-days each year. What remains to be seen is whether Governor Scott is willing to meet the Legislature in the middle. It is anticipated that the bill will move quickly through the House.

Despite tourism being one of Vermont’s largest economic contributors, the State’s tourism budget has historically been one of the smallest in the country. Thanks to an influx of Federal dollars, the Scott Administration has proposed historic investments in marketing to bring visitors to Vermont and marketing to attract new residents to Vermont.

In addition to the base budget funding of approximately $3.5 million, key investments include:

• $8.46 million which will be spent over 3 years (not funded via ARPA) as an investment for a Regional Relocation Network which would fund marketing, regional partners, and a new staff member.
• $10.4 million granted from the Federal Economic Development Authority Travel, Tourism and Outdoor Recreation program to support destination marketing, workforce and business development, and destination development and infrastructure investments.

These investments would resource the Vermont Department of Tourism and Marketing to improve the existing marketing efforts and help bolster Vermont’s long-term economic vitality with consistent messaging for visitors and prospective residents.

New data shows that restaurant recovery is paralyzed and nowhere near complete. Together with the Vermont Independent Restaurants, the Vermont Chamber engaged with the offices of Senator Leahy and Senator Sanders, demonstrating how urgent the need is among restaurants that did not receive relief before funding ran out. It has now been 263 days since the fund was depleted, leaving 581 Vermont restaurants shouldering more than $120 million in demonstrated unmet need. The inequity between restaurants that received funding and those that did not is staggering. Each day restaurants take on more debt to keep their doors open and their staff employed as business continues to lag. RRF replenishment was promised as a lifeline to small businesses that are essential to the community. The time for Congressional action is now.

The Scott Administration initially proposed to redeploy the remaining $26 million of business grants to other worthy projects while creating a new loan program for struggling businesses. While it’s less than 10% of the $350 million in State business grant relief that has been allocated during the pandemic, it would provide meaningful relief to the small business in the lodging, restaurant, and wedding industries. The Vermont Chamber cried foul and worked to prove that the formula and process were flawed. After much lobbying, including emails from members to legislators, the Senate Economic Development Committee is set to make changes so that small businesses can access these funds quickly.

The proposal moves the money to the Vermont Economic Development Authority (VEDA) for loans that could be converted to grants, like the PPP loans. However, applicants will have the opportunity to apply for forgiveness at the same time as applying for the loan so it would take minimal time for the loan being converted to the grant. Many details need to be worked out, but there is consensus building around this direction. This is just the first step in a long process to ensure this $26 million is granted to businesses as promised last year.

After testimony that the proposed smart growth designation would add time and cost to building housing, not efficiency, the Senate Natural Resources and Energy Committee updated S.234 to remove the smart growth designation program proposal. Instead, the Committee included the proposal in the Omnibus Housing Bill to amend the statute governing neighborhood planning areas and neighborhood development areas so more municipalities can access that designation and be eligible for Act 250-exempt priority housing projects. While these provisions are a positive change for building housing development projects, the Agency of Natural Resources warned legislators that the proposed Road Rule would lead to an assured veto from the Governor. The rule would trigger Act 250 jurisdiction when all roads and driveways of a proposed development cumulatively measured 2,000 feet or more or a single road or driveway of 800 feet in length or more. Extending Act 250 beyond its current form while the State is grappling with a housing crisis will slow the development of new housing supply for middle income Vermonters. The Vermont Chamber supports proposals that will make permitting for development efficient, predictable, and affordable.