Legislature Sends Lodging Bill to Governor

The Legislature passed S.79, a lodging bill that would establish a statewide short-term rental (STR) registry. The bill was messaged to the Governor’s office where it awaits further action. The Vermont Chamber has long believed that registration of STRs is a necessary first step to improve communication while also providing valuable data if, in the future, the State chooses to enforce health and safety regulations like those implemented to protect public health during the pandemic. The foundation set by establishing a STR registry would be a positive development toward ensuring a safe rental environment and moving towards equity in the lodging marketplace.

Prior to the bill’s passage in the Legislature, the Vermont Chamber sent a letter to the full Senate expressing support for S.79. Governor Scott has recently voiced concern over the legislation, and it is unknown whether he will allow the bill to become law. If the Governor vetoes the bill, the Legislature will likely attempt to override the veto when they reconvene in October or January. Contact Vermont Chamber Vice President of Tourism Amy Spear with questions or for assistance with contacting Governor Scott to voice your support for S.79.

In Case You Missed It

• Vermont Senate Overrides Vetoes of Noncitizen Voting Measures, Approves Housing Bill
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• Vermont Senate Considers Landlord Registry, Housing Incentives
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• STR: U.S. Hotel Performance for May 2021
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• Vermont Ranks No. 1 For Narrowing Gender-Wage Gap, But There's Still Work To Do
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• State Auditor Report: All-Payer System Costs More Than It’s Saving
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• Final Reading: Contractor Certification
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Legislature Adjourns After Passing Several Vermont Chamber Priorities

The Legislature adjourned Friday until October or January after passing bills that address several legislative priorities the Vermont Chamber worked to support over the past five months. A bill with a tranche of economic development proposals, including investments in tourism marketing, foreign trade, technology-based economic development, workforce development, and BIPOC business support was just one result of the session. Other legislation that made it over the finish line includes additional economic recovery grants, the largest investment in broadband buildout in Vermont history, investments in child care, health care cost savings for businesses, and additional incentives to recruit workers to Vermont. While these actions will benefit the business community, regrettably the Legislature did not meaningfully respond to the reality of overwhelming unmet financial need in the business community as a result of the pandemic. Lawmakers advanced only $30 million in relief grants, despite the Agency of Commerce and Community Development identifying over $500 million in existing known unmet need. The Vermont Chamber’s lobbying team recognizes the challenges the business community has faced over the last 14 months and worked extensively to understand members’ individual policy needs and advocate for legislative outcomes with the goal of ensuring economic recovery and supporting Vermont’s economic future.

Budget Makes Meaningful Investment in Vermont Economy

The Legislature passed a $7 billion budget that includes many unprecedented investments across state government, including in economic development. Some notable allocations are:

• $20 million to the Agency of Commerce and Community Development (ACCD) to fund additional economic recovery grants
• $20 million to Vermont State Colleges for system transformation over the next four years
• $11 million to ACCD to be used in the same manner as the Brownfield Remediation Fund
• $800,000 to ACCD for technology-based economic development grants
• $1.5 million for the Better Places Program
• $2 million to the Vermont Department of Tourism and Marketing in additional funds, beyond the agency’s regular budget for marketing and regional stimulus
• $650,000 for additional funds for new and remote worker programs
• $100,000 for adult CTE scholarships
• $300,000 for adult CTE program improvements
• $150,000 to ACCD for outreach and technical support for BIPOC-owned businesses
• $300,000 to support foreign trade with Canada
• $900,000 to ACCD to fund the Entrepreneurs’ Seed Capital Fund
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Funds for much of the budget rely heavily on resources provided to Vermont in the American Rescue Plan Act of 2021 (ARPA). This massive injection of federal money allowed legislative leaders and the Governor to advance bold proposals that may have otherwise not come to volition for many years.  Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Budget Includes $15 Million for Utility Customer Relief

Many businesses and residents have accumulated large overdue utility bills over the last year during the pandemic. In response, legislators included $15 million in the budget to provide relief for overdue bills caused by the economic hardship of the pandemic and the Vermont Public Utility Commission’s (PUC) extension of the state’s disconnection moratorium through the end of May. The PUC’s action also urged policymakers to provide additional funding to help Vermonters dig out from their overdue debts and ensure other customers do not have to pay these costs in the future. While some federal dollars were made available for qualifying renters and homeowners, the need in Vermont remains high and Vermonters and small businesses continue to face overdue utility bills.

As written in the budget (page 54) the allocated funds will establish a program to simultaneously minimize financial hardship caused by the COVID-19 public health emergency and mitigate utility rate increases ultimately shared by all utility customers. The Commissioner of Public Service will set the process, limitations, and means to distribute the funds for debt relief for the accounts of utility customers not otherwise eligible or able to access utility assistance or those who, though eligible, are not made whole for such debt through the American Rescue Plan Act of 2021 or the Consolidated Appropriations Act of 2021.

Legislature Invests $150 Million in Rural Broadband Buildout

After several years of working to advance a meaningful solution to Vermont’s rural connectivity problem, the Legislature appropriated ARPA funds to finance buildout in Vermont’s unserved and underserved, low-population regions. The $150 million (page 1152) is a massive increase from past investments and prioritizes buildout to locations with speeds under 25 Mbps download and 3 Mbps upload. The funds are primarily directed at Communication Union Districts (CUDs) which are organizations of two or more towns that join together to build communication infrastructure. In many parts of Vermont, CUDs do not yet exist, prompting the Legislature to allow some existing privately-owned internet providers to access the funds.

The Vermont Chamber has long believed connecting every Vermont household to adequate internet resources is essential to the health of Vermont communities and the future of the State’s economy. Achieving this goal continues to depend on public and private partnerships that work toward a common mission of ensuring even the most rural areas of Vermont have access to reliable internet that is capable of remote work, telehealth services, and home learning. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

UI Rate Fix Passes with New Tax Attached

After nine months of deliberating on how to properly adjust unemployment insurance (UI) trust fund replenishment in the wake of historic rates of pandemic-related unemployment, the State House advanced changes to remove 2020, an anomaly year, from consideration when the Department of Labor computes UI tax rate schedules. The Vermont Chamber advocated in favor of this change because it largely addresses concerns about unmerited UI cost increases for employers. Unfortunately, facing pressure emanating from a handful of representatives and senators who desired an increase in UI payments for claimants, legislators put forth last minute changes that add a $100 million tax on employers to increase UI benefits for claimants over the next several years. The Vermont Chamber strongly opposes this change. The use of the UI trust fund for this purpose is unnecessary, as ARPA funds could have been employed to provide working households with additional financial support. It should be noted that the result of the legislation is net savings for employers. However, the fix for 2020 was intended to be automatic, and the addition of this new tax should be viewed as just that – a new, multiyear tax on employers that are actively working to recover from an economically devastating pandemic. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Additional Economic Recovery Grants Clear State House

Using ARPA funds, $20 million in additional economic recovery grants was advanced as part of the Legislature’s economic development bill that was attached to the State budget bill (page 142). The addition of these funds to previously advanced economic recovery grants adds up to just $30 million in total business relief grants advanced in 2021. In December, the Agency of Commerce and Community Development (ACCD) identified $500 million in known unmet need in the business community as a result of the pandemic. Governor Scott recommended $50 million be provided for additional economic recovery grants, which was also disappointing, considering the demonstrated need. It is almost certain these grants will be oversubscribed.  For this reason, throughout the legislative session the Vermont Chamber and other business organizations advocated for a significantly larger grant program. Significant reserves of ARPA funding remain unallocated, and the Vermont Chamber will continue to advocate for direct financial support for businesses over the summer and into the next legislative session.

Economic Development Bill Passes

An economic development bill that includes a variety of Vermont Chamber priorities is awaiting the Governor’s signature. The bill was added to the budget bill (page 126). Top Vermont Chamber priorities included in the bill are $1.4 million in tourism marketing funds for out-of-state promotion of Vermont’s tourism sector, $600,000 for a regional consumer stimulus program, and $300,000 to establish a foreign trade office in Quebec for cultivating relationships with Canada-based partners and developing prospects for attracting business relocation and investment in Vermont. Additional Vermont Chamber priorities included in the bill are technology-based economic development investments, workforce development initiatives, investments in adult post-secondary education, a microbusiness development program, and BIPOC business support. Please contact Vermont Chamber of Commerce Government Affairs Director Charles Martin with questions.

Short-Term Rental Registry Paused

After being preliminarily approved by the House late last week, S.79, a bill relating to improving rental housing health and safety, which includes establishment of a short-term rental registry, has been held over until the Legislature reconvenes. Unable to garner the votes required to suspend rules and message the bill to the Senate forthwith versus waiting one legislative business day, the bill will remain with the House until the Legislature gavels in again. The legislation was already approved by the Senate for the first time in March, so it is expected the bill will pass when the Senate takes it up again. Contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Legislature Modernizes Liquor Laws

The Legislature passed the most significant liquor law modernization bill in recent years. H.313 is awaiting Governor Scott’s signature and includes the Vermont Chamber and Vermont Independent Restaurants priority to extend the current pandemic-allowed alcohol to-go provisions until July 2023. While not a cure-all, the off-premises provision as passed will help the industry recoup some lost revenue and provide a service that customers have come to expect. According to a National Restaurant Association survey in 2019, 56% of all adults said they would order drinks with their to-go order from a restaurant, if permitted. Without a doubt, the pandemic has accelerated this trend. By January 2023, a report examining economic and public safety impacts will be submitted to the Legislature.

Other provisions impacting Vermont’s tourism and hospitality industry that made it over the finish line include reduced third-class license fees (from $1,095 to $230) for holders of a manufacturer or rectifier’s license, updates to festival permits which were made in collaboration with the industry, and the elimination of the requirement for 48-hours written notice to be given to the Division of Liquor Control for promotional tastings for licensees and for staff participating in the promotional tasting to be off duty for the rest of the day. Contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Significant Child Care Bill Passes

The Legislature sent a significant child care bill to the Governor’s desk. A principal goal of the legislation is to plot a policy course that will ensure no household spends more than 10 percent of their income on child care by 2025. In a 2020 study of several states, the U.S. Chamber of Commerce determined that shortfalls in child care infrastructure resulted in between $479 million to $3.47 billion in estimated annual losses for those state’s economies. Vermont faces a similar challenge, worsened by our current workforce shortage. The Vermont Chamber continues to believe greater workforce participation could be achieved if more households have access to high-quality, affordable child care that prevents long-term workforce exodus by households in which child care is not an economically

Workforce Recruitment Bill Passes

The Legislature passed a bill (page 1227) to attract new and remote workers to Vermont. The Vermont Chamber testified in support of legislation that would provide $650,000 to ACCD to support employers that are unable to fill positions from among candidates who are already located in the State, whether due to Vermont’s very low unemployment rate or due to a disconnect between job requirements and candidate qualifications. Relocating employees may be eligible for a grant under the program for qualifying expenses, with grant amounts ranging from $5,000 to $7,500 for relocating employees who become residents. Priority consideration will be given to labor market areas with high average unemployment rates. Under the legislation relocating employees are defined as relocating individuals who become full-time residents of Vermont on or after July 1, 2020,  are full-time employees at a Vermont location of a for-profit or nonprofit business organization domiciled or authorized to do business in Vermont, and the individual becomes employed in one of the “Occupations with the Most Openings” identified by the Vermont Department of Labor in its Short Term Employment Projections 2020-2022 and the employer attests to the Agency that, after reasonable time and effort, the employer was unable to fill the employee’s position from among Vermont applicants. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Business Community Defeats Cloud Tax Proposal

The Vermont Chamber and other business advocates again avoided the threat of a cloud tax. If such a tax had advanced, consumers and nearly all of Vermont’s businesses that use cloud-based services would see considerable cost increases. This potential additional financial burden becomes particularly daunting for many businesses as they struggle from the economic fallout caused by COVID-19. As proposed this legislative session, the tax would have cost Vermont’s technology industry at least $14 million annually by Fiscal Year 2025 and would have damaged the state’s current tech-friendly reputation, while also disincentivizing the recruitment of remote workers. By adding a new financial burden for those who may have otherwise capitalized on connectivity opportunities to access or provide cloud-based services, this tax proposal had the potential to negate much of the economic benefit that would otherwise be achieved through State investments in broadband infrastructure. It is almost certain the business community will face similar proposals to tax cloud-based services next session. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

No Act 250 Reform This Year

Despite executive action and a handful of bills that, if advanced, would make significant adjustments to Act 250, no changes to the land use law advanced in 2021. Late in the 2021 legislative session,  encouraging Act 250 legislation was introduced in identical forms in the House and Senate. The legislation would, among other changes, reform the Natural Resources Board (NRB) and provide certain municipal areas an exemption from Act 250 jurisdiction. In addition to replacing the current five-member Natural Resources Board with a three-member professional full-time board, the two bills would transfer a handful of authorities currently held by District Commissions to the NRB. Exemption from Act 250 jurisdiction for certain Designated Downtowns, Enhanced Village Centers, and Neighborhood Development Areas is a long-standing priority of the Vermont Chamber. If implemented, this change would help facilitate responsible development in municipal areas, which would contribute to the creation of additional affordable housing in Vermont. Similar provisions were unsuccessfully introduced as part of a housing bill last session.

While a consistent priority of both the Scott Administration and the Legislature, Act 250 reform efforts have failed for the past several years. The Vermont Chamber continues to support the modernization of Act 250 to facilitate a more predictable and less costly permit process, while also ensuring Vermont’s natural resources are properly protected. We look forward to supporting these proposals when the Legislature reconvenes. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Resource Roundup

• Racism and the Economy
  The 12 District Banks of the Federal Reserve System are partnering to highlight the implications of racism in the United States and identify solutions. The Reserve Banks will host a series of virtual events to examine the ways in which structural racism manifests in America and advance actions to dismantle structural racism. Learn more and watch previous events in the series. Register to attend the next event on June 2.
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• COVID-19 Vaccines in Vermont
  The Vermont Health Department is working closely with the Centers for Disease Control and Prevention (CDC) and other partners to distribute vaccines as they become available. Find vaccine information in multiple languages here. In partnership with the Vermont Chamber of Commerce and the Vermont Department of Tourism and Marketing, the Vermont Department of Health is hosting walk-in COVID-19 vaccine clinics for restaurant, hospitality, and tourism workers over the next few weeks.
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• 2021 Virtual Manufacturing Summit
  The Vermont Chamber invites you to attend a unique, 100% virtual, and reimagined Annual Manufacturing Summit with a theme of “The Future of Adaptive Sourcing” on Thursday, September 9. Registration is now open to companies that meet the supplier criteria. Don’t miss this unique opportunity to meet with over 20 OEMs and prime contractors, Tier systems integrators, suppliers, partners, and students for new contacts, business opportunities, contracts, and workforce to rebuild and strengthen your supply chains. Learn more.
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In Case You Missed It

• Businesses Adjust as Pandemic Measures Ease Up
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• As Mask Mandates Disappear, Business Owners Make and Enforce Their Own Rules
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• Technical Problems Account for Rocky Return of Work-Search Requirement
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• Investments Spur Tech Manufacturing at GlobalFoundries and Beta Technologies
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• The Pandemic Created a Child-Care Crisis. Mothers Bore the Burden.
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• Fourteen Months After Shutdown, Vermont Restaurants Navigate a Summer Reboot
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Want great exposure for your business? Sponsoring the weekly newsletter is an affordable and effective way to reach your target customers. Email Megan Bullard for pricing and more information.

Legislature Proposes $100 Million Tax on Employers to Fund UI Benefits Increase

In September 2020, the Legislature began examining policy options intended to prevent significant unemployment insurance (UI) contribution rate increases for employers that were forced to furlough employees because of state-mandated operating restrictions and public health concerns related to COVID-19. It was widely anticipated that this issue would remain uncontroversial when it continued to be considered during the 2021 Legislative Session. This is because the proposed legislative adjustments simply constituted the State making a correction intended to prevent cost increases for employers that would otherwise face a financial penalty for complying with public health requirements that limited staffing capacity. Nine months later, the full Legislature has not passed legislation to address this problem.

Last week the House Committee on Commerce and Economic Development advanced changes to remove 2020, an anomaly year, from consideration when the Department of Labor computes unemployment insurance (UI) tax rate schedules. The Vermont Chamber supported this change because it would largely address concerns about unmerited UI cost increases for employers. Unfortunately, facing pressure emanating from the Senate Committee on Economic Development, Housing and General Affairs, this week legislators put forth additional changes that would add a $100 million tax on employers for the purpose of increasing UI benefits for claimants over the next several years.

The Vermont Chamber of Commerce strongly opposes this most recent change. This use of the UI trust fund is unnecessary and disregards the precarious economic situation the previous 14 months have caused for employers. The establishment of a new tax on employers is doubly perplexing, considering the state has at its disposal nearly half a billion dollars of unallocated American Rescue Plan Act (ARPA) funds available for use that could be provided as direct support to Vermont households in need of additional financial relief. The use of ARPA funds for this purpose would avoid a $100 million tax on employers. Despite this reality, the Legislature is poised to move forward with an additional UI benefits increase, paid for by employer contributions in a bill originally intended to hold employers harmless for their actions to protect public health and respond to the pandemic.

In December, the Agency of Commerce and Community Development estimated the known unmet need of employers to be $500 million. The Legislature has so far indicated they are willing to provide just $30 million to address this known need. The concept of disregarding $470 million in remaining unmet need and then additionally calling for a new $100 million dollar tax on employers in the wake of an economically devastating pandemic is unconscionable.

You can contact your legislator here to express opposition to this new tax that is now included as part of S.62. If you have questions or would like help reaching out to your legislative delegation, please contact Vermont Chamber Government Affairs Director Charles Martin.

Tourism and Hospitality Worker Vaccine Clinics Announced

In partnership with the Vermont Chamber of Commerce and Vermont Department of Tourism and Marketing, the Vermont Department of Health will host walk-in Covid-19 vaccine clinics for restaurant, hospitality, and tourism workers over the coming weeks. Each site will offer Johnson & Johnson vaccines for tourism and hospitality workers on a walk-in basis. Clinics will be staged at restaurants, lodging properties, ski resorts, and other tourism attractions in an effort to bring the vaccine directly to the workers of this sector.

Governor Phil Scott’s Vermont Forward Plan for reopening is dependent upon Vermonters doing their part and getting vaccinated as soon as they can. These upcoming sector-specific vaccine clinics will make accessing the vaccine easier for hospitality workers and help Vermont continue on the path to fully reopen by July 4th. To see all dates, times, and locations for these tourism and hospitality worker vaccine clinics, please visit the ACCD Recovery Resource Center. If a tourism or hospitality business would like to host a clinic for industry employees in their area, please contact Vermont Chamber Vice President of Tourism Amy Spear.

Eligible Organizations Can Submit Earmark Proposals Through May 21

Vermont Senator Patrick Leahy recently announced the opening of public applications for earmarks. Earmarks are congressional provisions directing federal funds to specific projects, and they present Vermonters with an opportunity to help decide what work gets funded across the state. Organizations and individuals can submit high-impact Vermont projects for funding consideration through 5 p.m. on May 21. For-profit entities are not eligible to receive earmarks. Specific organizations that are eligible to receive earmarks are listed here. Eligible organizations can submit projects for Senator Leahy's consideration through this application link. Senator Leahy's required application questions are available to view here in advance. Earmarks will be an important tool as our state and businesses recover from the pandemic-caused economic downturn, and the Vermont Chamber is encouraging eligible organizations to submit projects for consideration so that we secure good work that revitalizes Vermont. Connect with Vermont Chamber Government Affairs Director Charles Martin with any questions.

Committee Finalizes Economic Bill with Inadequate Business Relief

The House Committee on Commerce and Economic Development continued its review of the Senate’s version of H.159. The legislation is the main economic bill moving through the State House this year. House and Senate economic development committees have differing views of what the final bill will encompass. Key areas of agreement between the House and Senate, and longtime priorities of the Vermont Chamber, are provisions that create an International Business Attraction and Investment Program to attract Canadian companies looking to establish operations in the U.S. and additional State investments in tourism marketing. You can see a comparison of the Senate and House versions of the bill here.

An area of concern for the Vermont Chamber within the economic package is the low amount of funds currently proposed in the bill for economic recovery grants. In December, the Agency of Commerce and Community Development reported that the business community was facing $500 million in remaining unmet need because of the pandemic-caused economic downturn. With recent federal relief programs either narrow in scope or rapidly oversubscribed, most of that need remains unaddressed. H.159 in its current form would provide only $20 million in additional state relief for struggling businesses – an amount that will almost certainly be oversubscribed. The Vermont Chamber has repeatedly called for an increase to this amount and continues to work to enable relief program funds to be replenished over the summer, after they are oversubscribed. The Legislative Tourism Caucus echoed the Vermont Chamber’s concerns in a letter sent to House Committee on Appropriations Chair Janet Ancel that requested an increase to currently proposed grant funds. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Senate Passes Alcohol To-Go Until July 2023

On Thursday, the Senate passed their version of H.313, an alcohol bill. There are several provisions in the bill to modernize Vermont’s liquor laws, and if signed into law, the current pandemic-allowed alcohol to-go provisions would remain in place until July 2023 for licensees. This extension was a legislative priority identified by the Vermont Chamber and our partner organization, Vermont Independent Restaurants.

In advance of the bill moving back to the House, the House Committee on General, Housing and Military Affairs reviewed changes from the Senate and considered several issues for inclusion in the bill, including permitting licensed stores and retailers to sell spirit-based canned cocktails. Please contact Vermont Chamber Vice President of Tourism Amy Spear with any questions.

House Committee Approves STR Registry Fee

The House Committee on Ways and Means voted 10-0-1 to advance S.79 with an amendment. The establishment of regulatory equity between the short-term rental (STR) and traditional lodging markets has been a longtime priority for the Vermont Chamber.

As passed out of the Committee, the registry will have an annual fee of $35 per STR unit. Any STR that was active in the prior year will have the duty to register by March 1 annually. If enacted, the STR registration requirement will take effect in January of 2022. The bill will be taken up by House Appropriations next.  Please contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Tourism Caucus Calls for PPP Fix

The Legislative Tourism Caucus sent a letter this week to House Committee on Ways and Means Chair Janet Ancel requesting the Committee support the Senate Committee on Finance’s changes to H.436, the miscellaneous tax bill. The recent Senate changes exclude 2021 Paycheck Protection Program recipients from tax liability. The Vermont Chamber and other business organizations have pushed for this change since the Legislature moved to tax 2021 PPP loans through a provision included in a COVID-19 relief bill passed earlier in the session. If implemented, the provisions would directly contribute to economic recovery and help businesses impacted by the pandemic avoid a significant tax bill. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Resource Roundup

• COVID-19 Vaccines in Vermont
  Learn about current vaccine eligibility here from the Vermont Department of Health, and register when you become eligible. The Vermont Health Department is working closely with the Centers for Disease Control and Prevention (CDC) and other partners to distribute vaccines as they become available. Find vaccine information in multiple languages here. See dates, times, and locations for newly-announced vaccine clinics for tourism and hospitality workers here
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• 2021 Virtual Manufacturing Summit
  The Vermont Chamber invites you to attend a unique, 100% virtual, and reimagined Annual Manufacturing Summit with a theme of “The Future of Adaptive Sourcing” on Thursday, September 9. Registration is now open to companies that meet the supplier criteria. Don’t miss this unique opportunity to meet with over 20 OEMs and prime contractors, Tier systems integrators, suppliers, partners, and students for new contacts, business opportunities, contracts, and workforce to rebuild and strengthen your supply chains. Learn more.
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In Case You Missed It

• Vaccine Clinics for Hospitality Workers Begin Friday
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• The April Jobs Report Shows Women Are Still Struggling
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• Vermont Relaxes Mask Mandate, Following New CDC Guidance
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• As Full Reopening Nears, Vermont Employers Say Labor Market is Tighter Than Ever
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• Vermonters Spent $6.5 Billion on Health Care in 2019
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• Gov. Scott Establishes a Proclamation of Inclusion That Welcomes All to Vermont
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• Lawmakers Want to Send $89 Million to Vermont State Colleges. Will It Be Enough?
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• Blue Cross Vermont Proposes to Lower Premiums in 2022
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• DEC: Greenhouse Gas Emissions Fall Back Toward 1990 Levels
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Want great exposure for your business? Sponsoring the weekly newsletter is an affordable and effective way to reach your target customers. Email Megan Bullard for pricing and more information.

House Committee Advances Unemployment Insurance Fix

The House Committee on Commerce and Economic Development advanced changes to S.10 by an 8-2-1 vote. The most recent adjustment to S.10 removes 2020, an anomaly year, from consideration when the Department of Labor computes unemployment insurance (UI) tax rate schedules. Not making this UI trust fund change would cause the fund to balloon to about twice its pre-pandemic size, which would be an unnecessarily high figure supported by mandatory employer contributions. Removing 2020 from calculation of the fund will help to hold employers harmless from certain costs related to the pandemic and government-mandated shutdowns, while also ensuring the unemployment trust fund remains solvent and UI claimants are not negatively impacted. The legislation is now under consideration by the House Committee on Ways and Means.

The Vermont Chamber supports the Committee’s change because employers were not responsible for the circumstances that caused the high rate of furloughs in 2020. Removing 2020 from fund calculations would address this reality while mitigating sharp increases in future mandatory fund contributions by employers that would typically result from regular furloughs. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or concerns.

S.88 Will Result in Significant Savings on Health Care Premiums for Small Businesses

The House and Senate have both passed S.88 legislation that takes advantage of a change in federal health care policy and will result in millions of savings in health care costs for small businesses while protecting individuals from rate increases in their premiums. Rate filings for 2022 were due today, and Blue Cross Blue Shield’s rate filing indicates an unprecedented decrease of 7.9% for small employer premium rates.

The American Rescue Plan Act of 2021 (ARPA) expanded premium subsidies for individuals purchasing their own health insurance on Vermont Health Connect. With that new protection available, the legislation separates this individual market from the small group market, allowing for businesses purchasing in the exchange to be rated on their own, without subsidizing the individual market. Early estimates suggest this could result in as much as $17 million in savings. The language is written only for one year with an automatic return to merged markets for 2023. While not ideal, it is possible for the federal government to extend the premium protections to individuals beyond 2022, and if that happens, then the markets in Vermont can remain independent, potentially maintaining lower health care costs beyond just next year.

The action on S.88 is the result of the Legislature and Administration responding quickly to this federal change and the Vermont Chamber’s advocacy, which urged them to act to take advantage of these savings in the next health plan year. This bill will be before the Governor soon for his consideration, and he is expected to sign this legislation into law.

Funding for Montreal Trade Office Advances

As part of Governor Scott’s $210 million economic development and reinvestment plan, the Vermont Agency of Commerce and Community Development’s proposal to establish a Business Attraction Investment Program has passed in both the Senate and House budgets. The proposed budget appropriation of $300,000 would be used to hire a Canadian foreign trade representative firm over a period of two years to generate foreign direct investment (FDI) leads and prospects for the State in the areas of aerospace, biotechnology, and renewable energy, and provide Vermont with statewide representation in Québec. The goal of this initiative is to increase FDI investment with Canada, Vermont’s largest trading partner, and promote cross-border trade and tourism when the border reopens.

In keeping with our record of working with Québec on cross-border trade and legislative issues and building the Vermont – Québec Aerospace Trade Corridor, the Vermont Chamber supports this initiative. It will help strengthen our ties with Québec, promote tourism as we come out of the pandemic, and will also help to attract and recruit Canadian companies interested in establishing a footprint in Vermont to access the North American market for contracting opportunities. Successful business recruitment, in turn, will create jobs for Vermonters and grow the state’s economy. To learn more, please contact Vermont Chamber Vice President of Business Development Chris Carrigan.

Vermont Chamber Urges Congressional Delegation To Expedite J1 Visa Process

The Vermont Chamber sent letters to Vermont’s congressional delegation that reflected the Vermont Chamber’s support for additional National Interest Exceptions, and J-1 Visa Waivers or Expedited Interviews for J-1 applicants supporting Vermont’s hospitality industry. Workforce shortages continue to impact Vermont’s economy and the hospitality sector is grappling with some of the most significant staffing challenges. Vermont’s hospitality businesses depend heavily on Summer Work Travel Program participants.

Prior to the pandemic, Vermont annually hosted thousands of Summer Work Travel Participants who worked in seasonal positions supporting the hospitality sector. Only a handful of participants were able to come to Vermont last year, and many continue to face significant barriers and delays ahead of this summer’s tourism season. The letter encouraged the congressional delegation to alleviate delays in work visas, program applications, and interview processes so that individuals dependent on J-1 visas can continue to be part of Vermont’s community and businesses across the state can take full advantage of the ability to welcome tourists this summer and fall. For questions, please contact Charles Martin.

Vermont Chamber Calls for Increased Business Relief Grant Funding

In a letter to the Senate, the Vermont Chamber and other business organizations called for additional business relief grant funding and certain changes to currently proposed grant eligibility criteria. The Vermont Chamber recently testified in the Senate Committee on Economic Development, Housing and General Affairs to request an increase in business relief grant funding. At the end of 2020, the Agency of Commerce and Community Development estimated there was $500 million in existing known unmet need throughout the Vermont business community. In 2021, the Legislature has advanced only $10 million in relief for businesses impacted by the pandemic-related economic downturn and mandated closures. Governor Scott has requested an additional $50 million to be allocated to begin addressing the remaining need, however the Senate advanced only $20 million in economic relief grants as part of their Fiscal Year 2022 budget plan. Please contact Charles Martin with questions.

Short-Term Rental Registry Advances

The House Committee on General, Housing and Military Affairs passed S.79 out of committee by an 8-3-0 vote. The bill aims to improve rental housing health and safety and includes a statewide short-term rental registry. The Vermont Chamber has pushed for the establishment of a short-term registry and advocated for its inclusion in the bill. Provisions contained within this bill would serve as an important step to ensure a safe rental environment. The registry will be a mechanism to improve communication with owners and operators and would provide data if the State chose to enforce health and safety regulations in the future. The bill will now be taken up by the House Committee on Ways and Means. Please contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Vermont Chamber Testifies on State House Reopening Plan

In response to the publication of State House reopening recommendations presented to the Legislature, the Vermont Chamber testified in the Senate Committee on Institutions on the importance of ensuring the State House is open to the press, the public, and advocates. During testimony, the Vermont Chamber recommended that in-person operations not exclude members of the public.

The move to remote operations at the onset of the pandemic brought some increases in transparency, including the live-streaming of legislative proceedings, but it also significantly hindered the ability of the public, including lobbyists, to weigh in on developing legislation. Over the last year, advocates and members of the press accessing the State House virtually have repeatedly voiced concern about the possibility of legislators deliberating and making policy decisions off camera and out of the public view. The Vermont Chamber believes that to ensure full transparency and better enable public input on legislative proposals, it is imperative that legislators and the public can access the State House simultaneously when in-person operations resume. Members of the press weighed in on the issue earlier in the week, raising constitutional concerns about a potential scenario in which legislators are permitted to return to the State House while press and the public are excluded. Please contact Charles Martin with any questions or comments.

Consumer Sentiment, Industry Trends, and Economic Outlook for 2021

U.S. Chamber Senior Economist Curtis Dubay issued a report this week on the economic outlook for 2021. Overall, the economy is doing very well, and the data shows that most consumers are flush with cash due to savings during the pandemic, relief payments, and extra unemployment benefits. This trend, coupled with reopening plans, sets the stage for incredible economic growth, possibly exceeding 10% in Q2 although employment still lags behind pre-pandemic levels. Nationally, there are 7.4 million job openings, but workforce participation is still 8.4 million below pre-pandemic levels. This demonstrates the large skills and geographic mismatch that exists between job need and available workers.

Consumer sentiment rose in April to its highest level during the pandemic, but it’s still below pre-pandemic levels. Incomes are 27% higher than before the pandemic, which has led to more spending in recent months, supporting the goal of government support to help people manage through the pandemic. Additionally, personal savings have exploded during the pandemic, rising to close to $3.7 trillion since March 2020, $2.3 trillion more than normal. Expectations are that consumers will spend this in the travel, tourism, and events sectors, experiences that they have not been able to have for over a year. As government support ends, spending increases will be moderated but remain high due to accumulated savings.

Meanwhile, historically high unemployment insurance claims continue, and while they are trending down, they are likely to continue until fall. Meanwhile, wage growth remains strong and above inflation which means workers’ real buying power has been growing. As inflation increases and wages level off, this will change, but workers are still projected to be ahead of pre-pandemic levels.

Employment rose by almost 766,000 jobs in March (adjusted down from previously reported 916,000), and the April jobs report issued today reported employers only added 266,000 jobs, way below expectations. This is primarily due to the lack of workforce participation and if it continues, it could be a constraint on expected economic growth.  

• The retail sector has seen a V-shaped recovery which is a testament to the resiliency of the entire economy and consumers. Much of the fluctuation in this sector can be traced to the issuance of stimulus checks.
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• Manufacturing is leading the recovery as consumers buy goods in the absence of purchasing services. In March, manufacturing sentiment hit a 37-year high, however it fell slightly in April due to reports of tightening supply chains, rising prices, and lack of available workers.
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• Despite being impacted by lockdown orders, the service sector optimism has continued to rise, with an all-time high in March, due mostly to the reopening on the economy. However, supply and workforce woes may constrain the growth of this sector.
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• The housing market remains strong across the country with prices rising in 2020 by 10%. Supply is at an all-time low, driving prices up and leading to higher mortgage rates. Those factors may temper an otherwise strong season for this economic sector.
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The U.S. Chamber calculated when the economy would return to the size it would have been had COVID not happened, and that is projected to be late 2021 or early 2022, a quick recovery. For reference, the Great Recession took over three years to achieve that mark. This promising outlook and projected growth may be lessened by several factors: lagging workforce participation, supply chain limitations, and the Federal Reserve’s inflation policy which is targeted at 2%, but they have signaled they are willing to let it rise above that level.

Resource Roundup

• Department of Labor Announces Series of Work Search Virtual Town Hall Events
  The Vermont Department of Labor will host a series of virtual information sessions focusing on the work search requirements for unemployment insurance claimants that will be reinstated on May 9, 2021. Learn more about the reinstated work search requirement and upcoming informational sessions here.
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• COVID-19 Vaccines in Vermont
  Learn about current vaccine eligibility here from the Vermont Department of Health, and register when you become eligible. The Vermont Health Department is working closely with the Centers for Disease Control and Prevention (CDC) and other partners to distribute vaccines as they become available. Find vaccine information in multiple languages here.
• 
  
• 2021 Virtual Manufacturing Summit
  The Vermont Chamber invites you to attend a unique, 100% virtual, and reimagined Annual Manufacturing Summit with a theme of “The Future of Adaptive Sourcing” on Thursday, September 9. Registration is now open to companies that meet the supplier criteria. Don’t miss this unique opportunity to meet with over 20 OEMs and prime contractors, Tier systems integrators, suppliers, partners, and students for new contacts, business opportunities, contracts, and workforce to rebuild and strengthen your supply chains. Learn more.
• 
  

In Case You Missed It

• Vermont Faces Workforce Shortage as Some Businesses Struggle To Reopen
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• Business Owners Urge the Legislature To Increase Funding for Economic Recovery Grants
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• With End of Session Near, Budget Differences Remain Between Scott, Legislature
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• Senator Patrick Leahy Discusses Economic Future of Vermont With State Chamber of Commerce
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• House Panel Decides To Strike Dependent Benefit From Unemployment Bill
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• Vermont Dept. of Labor Awarded Federal Grant To Help Vermonters Return to Work After Injury
• 
  
• Biden Administration Blocks Trump-Era Rule Affecting Gig Workers
• 
  

Want great exposure for your business? Sponsoring the weekly newsletter is an affordable and effective way to reach your target customers. Email Megan Bullard for pricing and more information.

Vermont Chamber Supporting Bill to Expand Workforce

The Vermont Chamber testified in the House Committee on Commerce and Economic Development on S.62, legislation intended to expand Vermont’s workforce, attract new residents to the state, and provide support to employers who are unable to fill positions from among candidates who are already located in Vermont. The legislation specifically authorizes the Agency of Commerce and Community Development to award relocation grants for qualifying expenses of up to $5,000 for base grants and enhanced grants of up to $7,500 for relocating employees who become residents in certain labor areas. During testimony, the Vermont Chamber highlighted the workforce shortage crisis facing nearly every sector and emphasized the need for the Legislature to continue working to enact programs to recruit new workers to Vermont. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions.

Businesses Need More Relief Grants

The Vermont Chamber and other business advocates testified in the Senate Committee on Economic Development, Housing and General Affairs to request an increase in business relief grant funding. At the end of 2020, the Agency of Commerce and Community Development estimated there was $500 million in existing known unmet need throughout the Vermont business community. In 2021, the Legislature has advanced only $10 million in relief for businesses impacted by the pandemic-related economic downturn and mandated closures. Governor Scott has requested an additional $50 million to be allocated to begin addressing the remaining need, however the Senate advanced only $20 million in economic relief grants as part of their Fiscal Year 2022 budget plan.

The Vermont Chamber’s remarks reiterated earlier correspondence with legislative leaders calling for the Governor’s request to be fully authorized with additional authorizations to permit replenishing relief program funds in the future. The testimony also cautioned the Committee against narrowing eligibility for future state relief programs based on federal relief programs, like the Restaurant Revitalization Fund which is promising for certain sectors but has not yet allocated resources to Vermont businesses.

Work Search Requirement Returning for UI Claimants

The Vermont Department of Labor announced this week that the work search requirement for unemployment claimants will be reinstated beginning on May 9. Every week that individuals claim unemployment insurance, they will be required to conduct three qualified job contacts. Claimants with a formal return-to-work date within ten weeks of their initial claim are not obligated to search for work. The Vermont Chamber advocated for and supports the reinstatement of the work search requirement, with important exemptions for individuals who cannot safely return to work for health- or child care-related reasons. Vermont employers are currently struggling with a labor shortage across industries. The hospitality industry is short an estimated 9,000 employees. The ability for employers across the state to rehire furloughed workers and hire new employees is critical to a successful economic restart. Even before the pandemic, Vermont’s workforce was not large enough to satisfy demand for unfilled positions. Reinstatement of the work search requirement for unemployment claimants, which was appropriately suspended for the safety of employers and employees in 2020, will help Vermont secure the workers needed for economic recovery. Specific information on the work search requirement and exemptions can be found at labor.vermont.gov. Reach out to our Government Affairs Director Charles Martin with questions.

Vermont’s Workforce Shortage Could Benefit from Expediting J-1 Visa Applications

This week, the Vermont Chamber worked with longtime member The Tyler Place to advocate for an expedited process for J-1 Visas for eight workers from the United Kingdom that are critical to the success of this multi-generation family resort that hosts nearly 70 families each week, employing hundreds of staff.

Vermont’s aging demographics have been a concern for years, and the pandemic has increased the hiring woes for employers. Unemployment numbers show 30,000 fewer Vermonters in the workforce compared to the pre-pandemic numbers, with one third of those fully retired from the workforce. Many businesses express optimism for a robust tourism season for summer and fall, however, they are also concerned that the ongoing workforce shortage could constrain that rebound. While the Vermont Chamber advocated to lift the work search requirement for collecting unemployment and that is now slated for mid-May, that is only one piece of a complex hiring puzzle.

A recent Washington Post article discussed this trend stating, “As vaccinated Americans start to get comfortable traveling again, popular summer destinations are anticipating a busy season. But hotel, restaurant and retail store owners warn that staffing shortages exacerbated by the coronavirus pandemic could force them to limit occupancy, curtail hours and services or shut down facilities entirely just as they’re starting to bounce back from a grim year.”

In 2019, Vermont hosted 1,792 international college students who worked in seasonal positions, providing critical support to local businesses. In 2020, only 22 participants were able to come to Vermont. Normally, over 70% of Summer Work Travel participants would have visa appointments by now. This year, it is less than 5%.

The Vermont Chamber is advocating to expedite this process so that lodging properties and other hospitality businesses across the state can take full advantage of the ability to welcome tourists this summer and fall. If you hire J-1 Visa holders, please contact Vermont Chamber Membership Engagement Director Sophia Yager to provide a status update so that we can support your business.

Liquor Law Modernization Bill Clears Senate Committee

The Senate Committee on Economic Development, Housing and General Affairs voted unanimously to advance H.313 which contains provisions to modernize Vermont’s liquor laws including:

• Allowing the sale of alcoholic beverage for off-premises consumption for first, second, third, and fourth-class licensees until July 1, 2023. A provision is also included to study the economic and public safety impacts of this offering by January 2023.
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• A reduction to $230 for 3rd class licensing fees for Vermont distillers. Currently, the 3rd class licensee fee for manufacturers is $1,095.
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• Elimination of the requirement for 48-hours written notice to be given to the Division of Liquor Control for promotional tastings for licensees and for staff participating in the promotional tasting to be off duty for the rest of the day. This change will remove a cumbersome process that may impede the potential for selling products.
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The bill now moves to Senate Finance. Please contact Vermont Chamber Vice President of Tourism Amy Spear with questions or concerns.

Senate Passes Bill Limiting Agritourism Liability

On Thursday, the Senate passed in concurrence H.89 which makes providers of agritourism activities immune from civil liability if a participant is injured as a result of risks inherent in the activity and the provider has posted a warning about those risks. The bill heads to the Governor’s desk, and if signed into law would align Vermont with other states and put agritourism on a level playing field with other related industries in Vermont such as equine and ski areas in terms of limiting liability. Please contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Vermont Chamber Testifies on UI Changes

During testimony in the House Committee on Commerce and Economic Development, the Vermont Chamber expressed support for cost-saving adjustments to Senate-passed S.10. The Committee proposed changes to the Senate bill that include removing 2020, an anomaly year, from consideration when the Department of Labor computes unemployment insurance (UI) tax rate schedules. Not making this UI trust fund change would cause the fund to balloon to about twice its pre-pandemic size, which would be an unnecessarily high figure supported by employer contributions. Removing 2020 from calculation of the fund will save employers considerable costs over the coming years, while also ensuring the unemployment trust fund remains solvent.

The Vermont Chamber’s testimony supported this change because employers were not responsible for the circumstances that caused the high rate of furloughs in 2020 and removing 2020 from fund calculations would mitigate sharp increases in future mandatory fund contributions by employers that would typically result from regular furloughs. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or concerns.

Senate Advances $7.2 Billion Budget

The Senate has advanced H.439 (page 563), the Fiscal Year 2022 budget. The spending plan includes allocations from state coffers and federal resources provided to Vermont in the American Rescue Plan Act of 2021 (ARPA) and Coronavirus Aid, Relief, and Economic Security Act. $478.5 million of the budget is derived from the ARPA – Coronavirus State Fiscal Relief Fund. ARPA spending specifically includes $23 million for workforce investments, $56.5 million in economic development, and $101.8 for broadband and connectivity improvements – all Vermont Chamber priorities. The remaining ARPA funds identified in the bill are provided for public health improvements, housing, higher education, and a long list of infrastructure projects. You can see a full breakdown of ARPA spending here, including authorizations for top Vermont Chamber priorities like $2 million in support for tourism marketing and funds to hire a Canadian foreign trade representative firm over a period of two years to generate foreign direct investment leads and prospects for the State in the areas of aerospace, biotechnology, and renewable energy, and provide Vermont with statewide representation in Québec. The remaining $6.7 billion in the bill’s spending plan are State-sourced funds that will support the normal operations of State government.

Relief for Overdue Utility Bills

Many businesses and residents have accumulated large overdue utility bills over the last year of the pandemic, but relief may be on the way. The Senate Committee on Appropriations included $15 million in their version of the budget to provide relief for overdue bills caused by the economic hardship of the pandemic and the Vermont Public Utility Commission‘s (PUC) extension of the state’s disconnection moratorium through the end of May. However, the PUC’s action also urged policymakers to provide additional funding to help Vermonters dig out from their overdue debts and ensure other customers do not have to pay these costs in the future. While some federal dollars were made available for renters and homeowners based on income qualification and other restrictions, the need is great and gaps remain for Vermonters and small businesses experiencing overdue utility bills.

The $15 million has not yet been approved by the House and will likely require a budget conference committee and consideration by the Governor, who has expressed disapproval of the Legislature’s budget plan to leave nearly $500 million of COVID relief funds unallocated until 2022. The Vermont Chamber supports providing this utility debt relief to help businesses and residents recover from pandemic-related economic downturn and will work to support this funding during final budget negotiations.

Resource Roundup

• Restaurant Revitalization Fund Application Opens Monday
  Registration for the Restaurant Revitalization Fund opened today, April 30, at 9 a.m., and the online application will open on Monday, May 3 at 12 p.m. Qualifying business that do not plan on applying through a SBA-recognized POS Vendor should register at the SBA application portal prior to Monday’s application opening. It is anticipated that funds will be exhausted quickly. Read more about resources available to qualifying businesses to assist with the application process.
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• Call for Employers to Provide Paid Time Off for Employees to Get Vaccinated
  President Biden is calling on every employer in America to offer full pay to their employees for any time off needed to get vaccinated and for any time it takes to recover from the after-effects of vaccination. He will announce a paid leave tax credit that will offset the cost for employers with fewer than 500 employees to provide full pay for any time their employees need to get a COVID-19 vaccination or recover from that vaccination. Learn more.
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• Event Recording: Senator Patrick Leahy Joins Vermont Chamber for Discussion
  Senator Patrick Leahy and members of his staff joined the Vermont Chamber this week for an interactive virtual event. The discussion included an announcement of the Senator's plan to reintroduce earmarks to the Senate, what excites Senator Leahy about the infrastructure bill, and immigration and child care as it relates to workforce. Watch the full recorded event.
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• COVID-19 Vaccines in Vermont
  Learn about current vaccine eligibility here from the Vermont Department of Health, and register when you become eligible. The Vermont Health Department is working closely with the Centers for Disease Control and Prevention (CDC) and other partners to distribute vaccines as they become available. Find vaccine information in multiple languages here.
• 
  
• 2021 Virtual Manufacturing Summit
  The Vermont Chamber invites you to attend a unique, 100% virtual, and reimagined Annual Manufacturing Summit with a theme of “The Future of Adaptive Sourcing” on Thursday, September 9. Registration is now open to companies that meet the supplier criteria. Don’t miss this unique opportunity to meet with over 20 OEMs and prime contractors, Tier systems integrators, suppliers, partners, and students for new contacts, business opportunities, contracts, and workforce to rebuild and strengthen your supply chains. Learn more.
• 
  

In Case You Missed It

• Work-Search Requirement Reinstated For People Seeking Unemployment Benefits
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• Patrick Leahy Unveils Plan to Return Earmarks to the Senate
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• Senator Leahy Joins Vermont Chamber for Discussion on Supporting Vermont’s Economy
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• Vermont Senate Passes FY 2022 $7.2 Billion Budget and Capital Bills
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• State Airport Plan Calls for Upgrades at Three Locations in the Northeast Kingdom
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• What's In Biden's Infrastructure Package? We Talk With Congressman Peter Welch
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• Hospitality Industry Down 9,000 Employees in Vermont
• 
  

Want great exposure for your business? Sponsoring the weekly newsletter is an affordable and effective way to reach your target customers. Email Megan Bullard for pricing and more information.

Vermont Chamber Testifies on UI Changes

During testimony in the House Committee on Commerce and Economic Development, the Vermont Chamber and other business advocates expressed support for cost-saving adjustments to Senate-passed S.10. The legislation was originally intended to provide unemployment insurance (UI) rate relief to employers that were forced to furlough employees because of pandemic-caused circumstances. In the Senate, the bill evolved into a proposal that included substantial benefits increases for UI claimants, without providing a lasting solution to impending UI contribution rate increases for employers. In its current form, S.10 would increase Vermont UI benefits by an estimated $5.2 million in ongoing annual costs for employers.

The Vermont Chamber requested the Committee amend the legislation to remove 2020 from the calculation of the UI Trust Fund balance size, which is of paramount importance to Vermont businesses. Employers were not responsible for the circumstances that caused the high rate of furloughs in 2020, and removing 2020 from fund calculations would mitigate sharp increases in future mandatory fund contributions by employers that would typically result from furloughs. In testimony, the Vermont Chamber also suggested the Committee consider using American Rescue Plan Act of 2021 (ARPA) funds to support a dependent benefit that could serve both those currently in the workforce and UI claimants, if legislators choose to advance such a benefit. Use of ARPA funds for this purpose would avoid the $5.2 million direct cost to employers, as would be the case if the UI trust fund were employed as a funding source. Please contact Vermont Chamber of Commerce Government Affairs Director Charles Martin with questions or concerns.

Businesses Weigh In on PPP Taxability

After a continued outpouring of opposition from many business advocacy organizations and business owners, including the Vermont Chamber of Commerce, the Senate Committee on Finance heard additional testimony from business representatives. The testimony responded to the Legislature’s recent unexpected decision to enable forgiven Paycheck Protection Program (PPP) loans in tax year 2021 to be taxable as if they were income. The language providing the new tax was included as a last-minute change to a COVID-19 relief bill. Members of the Committee indicated they were open to considering adjustments that would eliminate this tax liability. However, to date no substantive action to remedy the problem has advanced.

Without legislative action, the recent changes would apply a tax to forgiven 2021 PPP loans as if they were income. The Vermont Chamber and other business organizations have requested the Legislature conform to federal treatment of forgiven PPP loans in the tax year 2021, as was the congressional intent of the forgivable loan program. In the wake of an economically devastating pandemic, most employers are ill-equipped to pay this new and unexpected tax bill. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or for help with contacting your legislators to oppose the tax.

Senate Hears Testimony on BIPOC-Owned Business Provisions

The Senate Committee on Economic Development, Housing and General Affairs heard testimony this week on provisions in H.159 related to supporting BIPOC-owned businesses. Advocates representing BIPOC Vermonters, including the Vermont Partnership for Fairness and Diversity, the Vermont Racial Justice Alliance, and the Center for Women & Enterprise, voiced support for the legislation as a first step in creating sustainable, equitable networks and systems. Data collection by the Secretary of State remains a high priority, an addition the Vermont Chamber suggested to better understand and reach BIPOC-owned businesses. Witnesses also highlighted the need for assistance in state contracting and procurement, both to ensure equity and to prevent outflow of state dollars to out-of-state firms.

The Vermont Chamber continues to support these provisions as we work to expand our own capacity to serve the BIPOC business community. Efforts are underway to engage with the community to understand how we can use our networking, marketing, and advocacy assets to support BIPOC-owned businesses. To learn more about this work, please contact Vermont Chamber Membership Engagement Director Sophia Yager.

Senate Committee Aims to Create Equity for Vermont Distillers

In collaboration with the Department of Liquor and Lottery, the Senate Committee on Economic Development, Housing and General Affairs is revising an alcohol bill, H.313 to include a provision to reduce 3^rd class licensing fees for Vermont distillers. Currently, the 3^rd class licensee fee for manufacturers is $1,095. The revision brings the licensing fee to $230 which would create parity for all Vermont beer, wine, and spirit manufacturers wishing to serve full-pours for on-premises consumption. The bill also contains provisions to extend alcohol to-go until July 2023. The Committee plans to vote on the bill on Tuesday

Short-Term Rental Registry on Track to Advance

The House Committee on General, Housing, and Military Affairs completed a detailed review of S.79. The bill contains a provision that would establish a short-term rental registry, a longtime priority of the Vermont Chamber. The Vermont Chamber has advocated that the foundation set by establishing a registry would be a positive step forward to ensure a safe rental environment and move towards greater regulatory equity in the lodging marketplace. The Committee will take testimony next week to answer outstanding questions, and it is anticipated that the bill will be passed out of Committee by next Friday.

Tourism Marketing Funds Cut

After the House advanced a $2.5 million boost for tourism marketing promotion within the Department of Tourism and Marketing, the Senate Committee on Economic Development reduced the proposal to $1.25 million administered through the Department and diverted $750,000 to a regional consumer stimulus program. The tourism promotion funds are intended to be used to promote Vermont’s travel, recreation, culinary, arts, culture, agritourism, and heritage experiences to attract visitors and stimulate visitor spending with local attractions and small businesses in rural communities and throughout the state. The remaining $500,000 of the original $2.5 million would be used for other purposes unrelated to tourism industry promotion.

The original proposal, as previously advanced in the House, is part of a wide-ranging economic development funding plan that is currently undergoing a series of changes in the Senate Committee on Economic Development. The Vermont Chamber supports maintaining the full $2.5 million amount of tourism promotion funding and the remainder of the plan as originally proposed by the House. Doing so would contribute to broad economic recovery and would also be the most equitable means to promote general visitation across all of Vermont’s regions. Please contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Bill Limiting Liability for Agritourism Advances

Following testimony by Beth Kennett of Liberty Hill Farm in Rochester, Vermont, the Senate Committee on Judiciary passed H.89 favorably without amendment. The concept of limiting liability for agritourism was first considered by the Legislature in the 1990s. This bill would align Vermont with other states and put agritourism on a level playing field with other related industries in Vermont such as equine and ski areas in terms of limiting liability. Please contact Vermont Chamber Vice President of Tourism Amy Spear with questions.

Resource Roundup

• April 26: Senator Patrick Leahy Joins Vermont Chamber for Discussion
  Next Monday, Senator Patrick Leahy and members of his staff will join us to discuss supporting Vermont's economic future, previous and future pandemic response legislation, and the Senator’s other priorities as Chairman of the Senate Appropriations Committee. Save your seat.
• 
  
• 2 Questions in 2 Minutes: Manufacturing Tax Exemption
  Take two minutes to learn about the manufacturing tax exemption and how an expansion would help Vermont's manufacturers. Connect with our Vice President of Business Development Chris Carrigan at ccarrigan@vtchamber.com with any questions.
• 
  
• Vermont Telecommunication Plan Business Survey
  The Vermont Department of Public Service is asking business owners/operators to complete a survey to help understand business operations and employees’ ability to do their work, related to telecommunications needs. Please complete the survey by April 30.
• 
  
• COVID-19 Vaccines in Vermont
  Learn about current vaccine eligibility here from the Vermont Department of Health, and register when you become eligible. The Vermont Health Department is working closely with the Centers for Disease Control and Prevention (CDC) and other partners to distribute vaccines as they become available. Find vaccine information in multiple languages here.
• 
  
• 2021 Virtual Manufacturing Summit
  The Vermont Chamber invites you to attend a unique, 100% virtual, and reimagined Annual Manufacturing Summit with a theme of “The Future of Adaptive Sourcing” on Thursday, September 9. Registration is now open to companies that meet the supplier criteria. Don’t miss this unique opportunity to meet with over 20 OEMs and prime contractors, Tier systems integrators, suppliers, partners, and students for new contacts, business opportunities, contracts, and workforce to rebuild and strengthen your supply chains. Learn more
• 
  

In Case You Missed It

• Gov. Scott & Lt. Gov. Gray: It's Time to Eliminate the Tax on Military Retirement Pay
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• Home Sales to Out-of-State Buyers Spiked In 2020, Data Show
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• Scott Allows COVID-19 Relief Bill to Become Law without Signature
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• Although Vermont’s Unemployment Rate Ticked Down, Job Picture Remains Grim
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• Nearly 55% Of Vermonters Partially Vaccinated
• 
  
• Biden Announces Tax Credit for Businesses Giving Paid Leave for COVID Vaccinations
• 
  
• Scott Administration Seeks Act 250 Exemptions for COVID Relief Projects
• 
  

Want great exposure for your business? Sponsoring the weekly newsletter is an affordable and effective way to reach your target customers. Email Megan Bullard for pricing and more information.

Opposition to Paycheck Protection Program Tax Continues

After an outpouring of widespread opposition from business leaders following the Legislature’s recent unexpected decision to tax forgiven Paycheck Protection Program (PPP) loans in tax year 2021, the Legislature has yet to advance legislation to adjust the harmful change. The language providing the new tax was included as a last-minute change to a COVID-19 relief bill. Without legislative action, the recent changes would apply a tax to forgiven 2021 PPP loans as if they were income. The Vermont Chamber and other business organizations sent a letter to the Legislature requesting they conform to federal treatment of forgiven PPP loans in the tax year 2021, as was the congressional intent of the forgivable loan program.

In the wake of an economically devastating pandemic, most employers are ill-equipped to pay this new and unexpected tax bill. The issue will be considered in the Senate Committee on Finance on Tuesday. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or for help with contacting your legislators to oppose the tax.

House Advances Cloud Tax

After advancing in the House Committee on Ways and Means, the full House voted to tax software as a service and to expand a tax bill to include additional taxes on platform and infrastructure as a service. If passed into law, consumers and nearly all of Vermont’s businesses that use cloud-based services would see considerable cost increases. This additional financial burden becomes particularly daunting for many businesses as they struggle from the economic fallout caused by COVID-19. The proposed taxes would cost Vermont’s technology industry at least $14 million annually by Fiscal Year 2025 and damage the state’s current tech-friendly reputation, while also disincentivizing the recruitment of remote workers.

By adding a new financial burden for those who may have otherwise capitalized on connectivity opportunities to access or provide cloud-based services, this tax proposal additionally has the potential to negate much of the economic benefit that would otherwise be achieved through future state investments in broadband infrastructure. Please contact Vermont Chamber Government Affairs Director Charles Martin if you have questions or would like help providing your input to the Legislature.

Business Groups Call for Increased Relief Grant Funding

The Vermont Chamber and several other organizations representing Vermont businesses recommended the Senate Committee on Appropriations include in the FY 2022 budget the Governor’s proposal for $50 million in American Rescue Plan Act (ARPA) funds for Economic Recovery Grants to be directed at the Economic Recovery Bridge Grants program recently established under H.315. The inclusion of the Governor’s ARPA request in this program would not fully address the $500 million in known unmet need existing because of pandemic related economic turmoil, but it would serve to provide a temporary bridge for businesses most in need of immediate relief.

H.315, the COVID-19 relief legislation passed by the Legislature and under consideration by the Governor, includes a $10 million grant program for businesses. The proposed grant program is intended to provide bridge funding to businesses that suffered a loss in 2020 and require immediate State aid, either to remain open or to reopen a business, until additional federal funds can be deployed and until economic recovery provides a more stable stream of revenue to support business operations. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or concerns.

Small Businesses Will Save on Health Care Costs in 2022

The House and Senate have both passed legislation that takes advantage of a change in federal health care policy that will result in millions of savings in health care costs for small businesses. The Legislature responded to the Vermont Chamber’s advocacy which urged them to act quickly so this opportunity will be in effect for the next health plan year.

The American Rescue Plan Act of 2021 (ARPA) expanded premium subsidies for individuals purchasing their own health insurance on Vermont Health Connect. With that new protection available, the legislation separates this individual market from the small group market, allowing for businesses purchasing in the exchange to be rated on their own, without subsidizing the individual market. Early estimates suggest this could result in as much as $17 million in savings. The language is written only for one year with an automatic return to merged markets for 2023. While not ideal, it is possible for the federal government to extend the premium protections to individuals beyond 2022, and if that happens, then the markets in Vermont can remain independent, potentially maintaining lower health care costs beyond just next year.

Support Grows for Short-Term Rental Registry

The House Committee on General, Housing, and Military Affairs took further testimony this week on S.79 which contains a provision to establish a short-term rental (STR) registry. The Vermont Chamber testified in support of this provision. The Legislature has taken progressive action to regulate the STR market in Vermont, and the registry is seen as the next step in the progression. Support for the creation of the STR registry was also echoed by groups that do not represent licensed lodging properties: Vermont Association of Realtors, Two Rivers-Ottauqeuchee Regional Commission, and Vermont Short Term Rental Alliance.

While STRs contribute positively to Vermont’s economy, they operate in a relatively unregulated environment compared to licensed lodging properties and are frequently unknown entities/units. Home sharing is not a new concept; it is how the Bed & Breakfast and inn industry began in Vermont. However, just as bed and breakfasts and inns have evolved over the years, the STR market has evolved, and we are now seeing large numbers of STRs that are not occasional renters but rather small- to medium-sized lodging businesses. In 2018 Chittenden and Rutland Counties represented 120,000 guests and $17 million in host income.

The foundation set by establishing a STR registry would be a positive step forward to ensure a safe rental environment and move towards greater regulatory equity in the lodging marketplace. If you have any questions or concerns, please contact Vermont Chamber Vice President of Tourism Amy Spear.

House Committee Reviews Senate UI Proposal

Senator Michael Sirotkin reported on Senate-passed S.10 to the House Committee on Commerce and Economic Development. The legislation was originally intended to provide unemployment insurance (UI) rate relief to employers that were forced to furlough employees because of pandemic caused circumstances. In the Senate, the bill ballooned into a proposal that included substantial benefits increases for UI claimants, without providing a lasting solution to impending UI contribution rate increases for employers. In its current form, S.10 would increase Vermont UI benefits by an estimated $5.2 million in ongoing annual costs for employers. Department of Labor Commissioner Michael Harrington also provided input to the Committee, explaining that the additional claimant benefit advanced by the Senate would be difficult or impossible to administer through existing Department of Labor systems.

Before the bill moved to the House, the Vermont Chamber and others in the business community worked to implement changes in the Senate to improve the legislation by successfully advocating for the removal of provisions that would have increased weekly UI benefits by 20 percent, an additional estimated $35 million cost for businesses. The American Rescue Plan Act of 2021 provided a $300 additional weekly benefit for claimants, and the compound impact of the proposed 20 percent increase at the state level, in addition to the federal benefit, would have contributed to disincentivizing returns to work and stifled economic recovery.

While the bill in its current form is an improvement from the previous draft, the legislation currently does not remove 2020 from the calculation of the UI Trust Fund balance size, which is of paramount importance to Vermont businesses. Employers were not responsible for the circumstances that caused the high rate of furloughs in 2020, and removing 2020 from fund calculations would mitigate sharp increases in future mandatory fund contributions by employers. The Vermont Chamber is scheduled to testify on the bill next week and will continue to advocate for a result that does not impart unsustainable cost increases on employers. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or concerns.

House Advances Partial Exemption on Military Retirement Pay Taxation

The House Committee on Ways and Means added a military retirement pay tax exemption to their controversial cloud tax bill. The tax exemption would exclude the first $10,000 of federally taxable U.S. military retirement pay from state taxation. Vermont is currently one of only a handful of states that fully taxes military retirement pay, which disincentivizes military retirees from moving to Vermont upon conclusion of their service. The Vermont Chamber has long supported fully exempting military retirement pay from taxation because military retirees often conclude service in their 40s and typically possess professional skills that uniquely position them to continue contributing to the workforce until they reach traditional retirement age. Military retirees are also a significantly more racially diverse population than the general population of Vermont.

The Vermont Chamber believes better incentivizing military retirees to move to Vermont would increase the diversity of our communities while also strengthening the workforce. If implemented, this exemption proposal would serve as modest step toward the future goal of fully exempting military retirement pay. However, the Vermont Chamber has concerns about using a bill that will implement a costly new tax on cloud services as a vehicle to advance the exemption. This exemption should, ideally, be increased in scope and advanced as standalone legislation.

Liquor Law Modernization Conversations Continue

The Senate Committee on Economic Development, Housing and General Affairs received testimony on Friday relating to H.313 and S.68. Provisions in both bills are aimed at modernizing Vermont’s liquor laws. Two provisions discussed Friday are also supported by the Administration. First, eliminating the requirements for 48-hours written notice to be given to the Division of Liquor Control for promotional tastings for licensees and for staff participating in the promotional tasting to be off duty for the rest of the day. This change will remove a cumbersome process that may impede the potential for selling products. Second, permitting licensed stores and retailers to sell spirit-based canned cocktails containing up to 16-percent ABV. The bill expands distribution and sale of these products to all of Vermont’s licensed stores or retailers rather than just the Department of Liquor and Lottery agency stores. The House will take up the low-alcohol spirits beverages conversation next week.

Senate Continues Review of Broadband Proposal

The Senate Committee on Finance continued deliberations on H.360, the primary broadband bill moving through the State House. After hearing from internet service providers (ISPs) and communications union districts (CUDs) last week, the Committee took further testimony from CUDs and ISPs. Representatives of the ISPs and others have cautioned against restricting funds to CUDs alone, which could delay broadband buildout.

The members of Senate Finance expressed agreement that some amount of funding needs to advance relatively soon to ensure effective and efficient use of funds and progress toward universal broadband service. The Committee has specifically expressed their intent to target addresses that are currently underserved or unserved (those with access to less than 25/3 Mbps). A point of debate remains around whether the Committee should require new, publicly funded buildout to be capable of 100/100 Mbps or to allow for 25/3 + Mbps in the short term for those who would otherwise have to wait several more years for the higher quality service.  Members of the Committee have considered committing a set amount of funds for the immediate construction season while using the next several months to develop a more thought-out structure and strategy for the future. CUDs have pushed back on this line of thinking, arguing that they will not be able to secure private partnerships and contracts for multi-year projects with only one year’s worth of financial commitment from the State.

The Committee is also largely supportive of a property tax exemption on all new broadband infrastructure built after July 2021, provided it is capable of 100 Mbps symmetrical service and the owners of the infrastructure are themselves CUDs, or ISPs working with a CUD. This measure had previously been supported by the committee as S.64. The Vermont Chamber continues to believe that investments in broadband should include public and private partnerships that maximize knowledge and capitalize on existing infrastructure, while planning for future technology landscapes.

Resource Roundup

• April 26: Senator Patrick Leahy Joins Vermont Chamber for Discussion
  On Monday, April 26, Senator Patrick Leahy and members of his staff will join us to discuss supporting Vermont's economic future, previous and future pandemic response legislation, and the Senator’s other priorities as Chairman of the Senate Appropriations Committee. Save your seat.
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• COVID-19 Vaccines in Vermont
  Learn about current vaccine eligibility here from the Vermont Department of Health, and register when you become eligible. The Vermont Health Department is working closely with the Centers for Disease Control and Prevention (CDC) and other partners to distribute vaccines as they become available. Find vaccine information in multiple languages here.
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• Work Productivity & Hybrid Work Scheduling Schemes
  State of Vermont employees from multiple agencies and departments have been working since October on assessing and evaluating our post-pandemic landscape with respect to workforce. They are looking at how to measure productivity and value in a hybrid office/remote working environment and hybrid work scheduling schemes. They want to learn from your organization’s remote work experiences and plans during and post-pandemic. Complete the survey by April 19.
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• Vermont Forward Plan
  Governor Phil Scott recently released a reopening guide to help Vermonters and local businesses see the path for a phased return to unrestricted travel, business operations, and event gatherings. The plan was developed by the Department of Health, the Department of Public Safety, and the Agency of Commerce and Community Development and uses vaccination milestones to ensure a safe easing of personal restrictions and continued reopening of the state's economy. Read plan details here. See a message from Vermont Chamber President Betsy Bishop on the reopening plan here.
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• 2021 Virtual Manufacturing Summit
  The Vermont Chamber invites you to attend a unique, 100% virtual, and reimagined Annual Manufacturing Summit with a theme of “The Future of Adaptive Sourcing” on Thursday, September 9. Registration is now open to companies that meet the supplier criteria. Don’t miss this unique opportunity to meet with over 20 OEMs and prime contractors, Tier systems integrators, suppliers, partners, and students for new contacts, business opportunities, contracts, and workforce to rebuild and strengthen your supply chains. Learn more.
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In Case You Missed It

• Downtown Board Green Lights New Town Center in Berlin
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• Martin: Act 250 and the Stifling Of Economic Opportunity in Vermont
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• Vermont Businesses Scour for Willing Workers
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• Business Advocates Implore Lawmakers to Forgive PPP Loans
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• April 26: Senator Patrick Leahy Joins Vermont Chamber for Virtual Discussion
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• Tech Sector Criticizes ‘Cloud Tax’ in House Bill
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• Vermont Businesses Slam Plan to Tax Federal COVID Loans
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• The Moment Is Now to Improve the Health of Housing
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