Amy Spear

The Senate Economic Development, Housing, and Military Affairs Committee returned to the issue of increasing Unemployment Insurance (UI) benefits with S.221, a proposal to create a temporary supplemental benefit of $25 per week for claimants, paid for with federal ARPA funds. The temporary benefit would remain in place until 2024, at which time the Committee hoped the UI mainframe computer system could be modernized, and a permanent $25 supplemental weekly benefit could take effect. However, the Vermont Department of Labor testified that this timeline is unrealistic, and IT modernization is likely to take up to five years once funding is provided for the project and a contract selection process is completed. The Committee is hesitant to pass a bill implementing a supplemental benefit that may not be continued as promised but is also under pressure from the U.S. Department of Labor to either repeal the legislation passed last year authorizing the supplemental benefit or find a fix. The Vermont Chamber believes that tax relief for Vermonters will be more effective in accomplishing the Committee’s goals than increasing unemployment benefits for this comparatively small pool of people.

With nearly $26 million in Economic Recovery Bridge Grants sitting idle, Economic Development Commissioner Joan Goldstein suggested to House and Senate committees this funding be moved into the Capital Investment Program (CIP). The committees are interested in distributing this money quickly and businesses in their communities have expressed there is still great need across many sectors. The Vermont Chamber urged the committees to keep the money in the Bridge Grant program and fix the formula and application process to allow businesses to easily access this funding. While the Vermont Chamber is supportive of the CIP, it focuses on an entirely different set of businesses that have largely recovered and are looking to the future. Allocating money separately for that program is preferential to taking money away from the Business Grant program. For many businesses in the lodging, restaurant, and wedding industries, the pandemic is not over, and they still have unmet need.

The Senate Judiciary Committee reviewed S.113, which proposes to establish a cause of action of the remedy of medical monitoring for a person who is exposed to a proven toxic substance. This legislation stems from a bill vetoed by Governor Scott in 2019. This new iteration has greatly improved on the last version by incorporating the suggestions that the Vermont Chamber made during prior testimony, making the bill substantially more reasonable for businesses. The Vermont Chamber has some remaining concerns regarding the criteria for the legal test, the insurance markets, and whether medical monitoring insurance can be written for Vermont companies and will work to highlight and address these concerns for the insurance markets and manufacturers. For questions, concerns or to learn more, please contact Chris Carrigan.

The House Commerce Committee heard testimony on H.29, which would require small nonprofit employers with fewer than four employees that do not participate in the Unemployment Insurance (UI) system to notify prospective employees that they will be ineligible for UI benefits. This bill attempts to correct a problem some employees faced during the pandemic when they filed for UI benefits, not realizing that their employer’s small size made them ineligible for benefits. An amendment to the bill would also require employers that elect to reimburse the UI Trust Fund rather than make regular payments to provide the Vermont Department of Labor with a security deposit.

The House General, Housing, and Military Affairs Committee continued work on two bills regarding discrimination in housing, education, public accommodation, and employment. H.320 would prohibit discrimination settlement agreements between employer and employee from including prohibitions on future employment, which advocates say unfairly penalize victims of workplace harassment. However, some employment attorneys have raised concerns that this could take away what little leverage employees have in settlement negotiations.

H.329 would amend the prohibitions against discrimination by removing the “severe and pervasive” standard for harassment based on any protected class, establish a uniform 6-year statute of limitations, allow an employee to file a claim without having previously pursued an internal grievance process, and remove the requirement that an employee demonstrate that a comparable employee was treated differently to prove that discrimination occurred.

The Committee will review these proposals and decide if additional laws are needed to protect employees from discrimination in the workplace while considering the concerns of employers and the protections afforded in current law.  To share your thoughts on these bills, email the Vermont Chamber Government Affairs Team.

The Senate Economic Development, Housing & General Affairs Committee voted favorably on S.210, which creates a rental registry but exempts properties rented for fewer than 90-days each year. While a majority of the Committee acknowledges the critical importance of the registry for all short term rentals (STRs), they are crafting a bill that will be more likely to gain the Governor’s approval according to the path set forth in his veto message. With this exemption, Vermont will not collect important information to fully understand the impact STRs have on the tourism market and on housing scarcity. S.210 will likely pass the Senate and then move to the House for their consideration where robust conversations are anticipated. The Vermont Chamber will continue to advocate for equity within Vermont’s lodging industry.

The Priority Housing Project was established to fast-track approved projects and exempt them from Act 250 permitting regulations. Getting that designation itself can be timely but reviews of the program have generally been favorable. Multiple bills were discussed this week to build on the success of that program and expand how it can be used. Proposals include increasing caps on the number of units that could be built in a project, creating a tax incentive to exempt construction materials for these projects from sales and use tax, expanding the types of projects that qualify in Neighborhood Development Areas, lowering the bar to entry so more municipalities can create Neighborhood Development Areas, and increasing the definition of affordable rental housing from 80% area median income (AMI) to 120% AMI. With the time crunch to get ARPA dollars out the door, there were questions about if these changes will be enough to get projects moved through the pipeline in time.

The Senate Finance committee will be bundling ideas from many of the housing bills being proposed this session into one large omnibus housing bill. The Vermont Chamber supports efforts to address the “missing middle” in housing reforms and will advocate that new and existing programs address the housing crisis for middle income workers.

The Governor’s FY23 Budget includes a $3.1 million expenditure to remove the tax on military pensions for retirees and survivor benefits for military families, an effort the Vermont Chamber has supported. Vermont is one of only three states (CA, VT, VA) and Washington, D.C., that offers no pension tax relief to military retirees. The retirement age of military personal tends to be between 38-42. Removing that tax on military pensions could be another tool used to recruit and retain a diverse workforce population to address the severe worker shortages for all industries. To learn more, please contact Chris Carrigan.

The Senate Finance Committee reviewed the Governor’s tax proposals, including three significant efforts to support working families with child care costs, and child care centers with staffing retention. These include:

• An expansion of the Earned Income Tax Credit for low- and moderate-income workers.
• An increase to the Vermont Child Care and Dependent Tax Credit to 65% of the federal tax credit and a change to make it fully refundable.
• $1,000 fully refundable tax credit for Vermonters working in child care. It is expected that on average this will wipe out any tax liability for child care workers.

The House also discussed a proposal for a Child Tax Credit, similar to the credit that expired from the Federal government in 2021. Data from the US Census Bureau shows that 1 in 4 families nationally with young children used the advanced child Tax Credit to cover child care costs. On the State level, with the price tag of $50 million per year, questions remain about a long-term funding source for this program which would be in addition to significant investments promised last year in a system-wide overhaul set as a goal in statute.