vcc1

Congressman Peter Welch joined Vermont Chamber members for a conversation about how Vermont can leverage federal funding to build the economy of the future. The Congressman discussed the impacts COVID-19 has had on businesses and empathized with what employers have gone through. The discussion turned to the workforce shortage, with a need for housing, childcare, and infrastructure to attract more people to live and work in Vermont. Julia Birnn Fields of Birnn Chocolates spoke of her business’s success in hiring New Americans, and Sarah Morris of Basin Harbor talked about her challenges in hiring enough seasonal workers without a steady supply of foreign workers. Congressman Welch spoke about the recent increase in the H2B visa program and the Afghan refugees being resettled in Rutland. He will continue to support efforts to bring more workers to Vermont, through visa programs and refugee resettlement. Ruth Ann Pattee of Northern Stage Theater Company asked what provisions for housing may come from federal funds. Congressman Welch discussed the increase in housing prices, the impact from short term rentals on the housing market, and his support of the Build Back Better bill’s funding of tax credits and construction of new housing units. He also affirmed his support for replenishing the Restaurant Relief Funds, which could provide much-needed aid to the at least 581 Vermont restaurants with unmet need. Catch up on this conversation by viewing the recording of the event here.

In his State of the State address, the Governor foreshadowed support for childcare programs in his upcoming budget, specifically referencing changes to the Childcare Financial Assistance program to increase access to quality care and learning. That is one component of helping families with children. Other areas up for discussion this session include emergency compensation and recruitment tools for early childhood educators and funding a Child Care Financing Study. The Governor will also propose a tax relief package focused on retirees, middle-income families and young workers which may create room for discussion on a state-level Child Tax Credit, similar to the federal tax credit that recently expired. The initial proposal would be a $1,200 annual refundable tax credit for children under six with an estimated cost of $58.7 million. How this would be funded in the short-term or long-term has yet to be discussed but the House Committee on Ways and Means appeared poised to pursue this proposal.

Historic federal investments in broadband infrastructure will jumpstart broadband buildout, connecting more households, businesses, and community anchor institutions to bring the economy into the 21st century. Due to the matching requirements for most of these programs, the Legislature must determine whether State funds appropriated for broadband buildout will be sufficient to cover Vermont’s share of the cost of these projects, and whether the State is on track to meet statutory goals of providing 100/100 Mbps service to all locations in Vermont by 2024. The Legislature must also address the problem of finding the workforce to carry out this project. Last year, the Legislature created a pilot program at Vermont Technical College to train fiber-optic technicians, pay them during classroom training and apprenticeship, and offer wraparound services such as childcare. The Vermont Chamber supports this program to create a stronger talent pool and will continue to advocate for relocation incentives to attract more workers to the state.

The Capital Investment Program was initially funded with $10.5 million in ARPA funds to support transformational projects for key infrastructure needs including housing, climate, wastewater and economic development. As collaborative community projects rolled in, the program was oversubscribed by $60 million. The Senate Committee on Economic Development reacted positively to the Department of Economic Development’s presentation which will likely lead to greater funding to replenish the program.

The Governor’s requests for adjustments to the current year funding were discussed. The Vermont Chamber testified in support of increases in programs that support growing Vermont’s workforce and workforce housing. Those include Vermont State College funding to the Critical Occupations Program Scholarship, the Welcome Home Scholarship, and a CTE pilot program as well as ARPA funds going to housing programs for VHCB, VHIP, a rental risk pool, and a Missing Middle Home Ownership Development Pilot Program. You can view that testimony here.

Gov. Phil Scott’s State of the State address focused on Vermont’s workforce crisis, a familiar theme for employers. The Governor stated that he will not support any legislation that could make the workforce shortage worse. He prioritized workforce training opportunities with an expansion to the CTE program and a relocation incentive package with targeted marketing to attract new workers. The Governor also outlined other ways to attract more workers through refugee resettlement, recruitment of Canadian businesses, modernizing licensing laws, and eliminating the tax on military pensions. In response, Vermont Chamber President Betsy Bishop said, “We support initiatives to fund our training programs, build more housing, and provide relocation incentives, all of which will benefit from federal ARPA funds.” The Governor also noted the shortage of middle-income housing as a critical need for addressing the workforce shortage. The Governor suggested his budget will address other economic development programs and make transformational investments for a strong economic future. The Governor’s budget will be presented in two weeks.

• 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.  

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.