Contact Your Legislators Now to Urge Additional Business Grant Funding

After the Vermont Chamber urged the Scott Administration and the Joint Fiscal Committee to redeploy unallocated CARES Act funding to the business recovery grants, the Joint Fiscal Committee is considering an Administration proposal to reallocate $75 million for businesses. Contact your legislators and ask them to urge their colleagues on the Joint Fiscal Committee to approve these funds for additional business relief grants. If your legislator is a member of the Joint Fiscal Committee you can contact them directly with the request.

In your communication with legislators we suggest highlighting the vital importance of maintaining cash flow and the financial impact of Governor Scott’s most recent travel restrictions, which includes universal mandatory quarantine for all out of state travel to Vermont.  If you have questions about how best to frame your communication, please contact Vermont Chamber Government Affairs Director, Charles Martin.

Vermont Chamber Requests Additional Relief for Businesses

The Vermont Chamber sent a letter last week to the Joint Fiscal Committee requesting the Committee authorize disbursement of a portion of state-recouped relief resources to be provided to businesses with existing unmet need. To avoid returning Coronavirus Relief Fund (CRF) dollars to the federal government, the State will recoup any unexpended CRF resources prior to the congressionally imposed spend deadline of December 31. The Joint Fiscal Committee is tasked with authorizing disbursement of the excess funds, and the Vermont Chamber is advocating that a portion of those funds be provided to businesses with unmet need. Governor Scott requested $75 million of the potential reallocated funds go to expanded economic relief grants for businesses with unmet need. As a result of the pandemic-caused economic downturn, there is an estimated $600 million in unmet need that businesses throughout Vermont are still grappling with.

On Monday, the Joint Fiscal Committee met to discuss several requests for reallocation of CRF funds. Members of the Committee were sympathetic to the ongoing need of COVID-19 impacted businesses, particularly those in the lodging and restaurant sectors. However, despite assurances from Vermont Department of Labor officials that the Unemployment Insurance (UI) Trust Fund is in good health and not at risk of becoming insolvent in 2021, Committee members indicated they are interested in providing a portion of the Administration’s reallocation request to the UI trust fund and for other purposes.

The Committee has not yet made a final decision on how to use remaining CRF funds. They are expected to meet on Saturday to make a final determination. In the meantime, the Vermont Chamber will continue to work with state leaders to help ensure the business community is not left out of this opportunity for additional economic relief.

State Election Results Impact Political Dynamics in Montpelier

Republican Governor Phil Scott handily won reelection by a margin that clearly reflects bipartisan support for the Governor’s leadership during the pandemic and prior. In addition to the Governor’s victory over Progressive/Democrat challenger, Lt. Governor David Zuckerman, Republicans increased their total strength by three seats in the House and one seat in the Senate. Notably, this outcome reduces the strength of the combined Democratic and Progressive parties in the House to 99 seats, effectively eliminating the liberal coalition’s ability to override gubernatorial vetoes through party-line votes. Impacting State House dynamics further is the exodus of several legislative leaders, including President Pro Tempore of the Senate Tim Ashe (D/P) from the State House after his Lt. Governor primary election loss to Lt. Governor-Elect Molly Gray (D), House Speaker Mitzi Johnson’s (D) election loss to Republican challenger Michael Morgan, and House Progressive Party Chair Robin Chesnut-Tangerman’s loss to Republican challenger Sally Achey.

The vacancy of the Speaker’s position has already resulted in multiple legislators coming forward as possible replacements for Speaker Johnson. House Speaker hopefuls will no doubt spend the next several weeks delicately attempting to gather support among their legislator colleagues before the upcoming election of a new House Speaker.

Vermont Chamber Hosts Virtual Policy Series

The Vermont Chamber of Commerce is currently hosting a Virtual Policy Series that brings together government and business leaders to get questions answered, provide personal access to key Vermont leaders, and bring attendees up to speed on important policy. The events are hosted virtually every Monday afternoon through December. Our guest speakers answer questions from attendees and our staff moderates. You can view the complete agenda and register for upcoming events through December 14.

In the first event of our series, Congressman Peter Welch discussed the economic repercussions of the pandemic and federal actions impacting Vermont. You can listen to coverage of the event with Congressman Welch on WAMC. In an event featuring Secretary of State Jim Condos, the conversation delved into new challenges presented by the 2020 election cycle and what election changes Secretary Condos thinks are here to stay. Department of Labor Commissioner Michael Harrington and Director of Economic & Labor Market Information Mathew Barewicz joined for our third event, and the conversation included Commissioner Harrington's legislative wish list and current unemployment numbers and trends. Our most recent event featured U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley, who explored expectations for the next federal relief bill and the economic importance of investing in child care.

Next Monday at our Broadband Now and Beyond event, Department of Public Service Commissioner June Tierney and Representative Laura Sibilia will discuss broadband investments made in 2020 and planned infrastructure improvement. If you have questions about the series, please reach out to our Director of Events Ariel Bertenshaw.

In Case You Missed It

• House Republican Gains Could Strengthen Scott’s Veto Powers
• 
  
• Kimbell Joins Race For House Speaker; Browning Also Considers Outside Run
• 
  
• State Orders Universal Quarantine for Travelers
• 
  
• Vermont Chamber Joins Addison County Chamber for 2020 Legislative Briefing
• 
  
• State Unemployment Insurance Trust Fund Remains Healthy
• 
  

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State Leaders Listened

Vermont business leaders across all industries have demonstrated their ability to creatively adapt over the last several months to conditions no one could have foreseen. However, it was evident from the start of the ongoing COVID-19 crisis that state and federal resources were needed to begin mitigating the staggering economic harm caused by this health crisis. During the 2020 legislative session, Vermont Chamber members and staff, through formal testimony and thousands of individual correspondences, communicated to state leaders the unprecedented circumstances faced by our business community.

Upon adjournment last week, the Vermont Legislature and Scott Administration showed the business community they were listening.

Nearly $300 million in direct economic aid was appropriated to state agencies that administered and will continue to administer distribution to Vermont businesses. This process, though imperfect, was the result of a Herculean effort by state officials who depended on the business community to provide input that shaped key decisions along the way. A combination of this input and close partnerships between the Agency of Commerce and Community Development and economic development committees in the House and Senate was essential to ensuring resources were generated and made accessible. While we applaud our public servants for their important work over the last year and particularly the last seven months, there is no doubt that additional resources are still needed, especially in some of our hardest hit sectors, like lodging and restaurant entities.

In the interim between the Legislature’s adjournment last week and the start of the 2021 session in January, the Vermont Chamber will maintain a constant dialogue with the business community so that we can ensure state leaders are well informed of your developing needs. We will also swiftly update our membership when new information is available related to relief funds. As always, do not hesitate to contact Vermont Chamber staff with any questions or concerns. We look forward to hearing from you!

Economic Relief

September Economic Relief
As part of the budget negotiations, the House and Senate resolved their differences and appropriated the remaining $100 million in economic relief funding. Once signed into law by the Governor, an additional $80 million will be disbursed to businesses by the Agency of Commerce in a similar manner as the first round of grants, nearly doubling the first round of funding. In this tranche of grants, there will be fewer restrictions and a higher cap of $300,000. The 50% loss threshold in one month was also removed and replaced with language that requires businesses to demonstrate need from March 1 through December 31, 2020. This should allow more businesses to access more funds and help them survive the pandemic. The budget also includes $17 million in additional relief for recipients of unemployment benefits.

Additionally, the budget appropriates $4 million to the Vermont Department of Tourism and Marketing to publicize the resumption of activities and steps taken to ensure a safe experience and to encourage visitation and consumer spending. This effort will be coordinated with regional partners to develop and implement marketing strategies that ensure regional and statewide benefits. Ski areas will also receive $2.5 million to make physical improvements to mitigate public health and safety risks due to COVID-19.

The Vermont Chamber called for removing eligibility restrictions and increasing grant funding for businesses that were most severely impacted by mandated operating restrictions related to COVID-19.

June Economic Relief (funds expiring or expired)
S.350, the Legislature’s initial relief bill, provided $70 million to businesses that experienced 75 percent or greater reduction in revenue as a result of the COVID-19 public health emergency. Using the framework established in that bill, the Legislature advanced an additional round of funding that directs another $82 million in grants to businesses that suffered a 50 percent or greater reduction in revenue in a monthly or quarterly period from March 1, 2020 to September 1, 2020 as compared to the same period in 2019. The bill further provides $24 million in funding for various business sectors, bringing the total relief in the second round of funding to $106 million as displayed in the table below.

As drafted, the $82 million provided directly to ACCD/DOT for additional emergency economic recovery grants would not be accessible to sole proprietors. Sole proprietors will be able to access some of the remaining funds and programs provided by the bill.

Other notable relief advanced by the Legislature out of the federal CARES Act includes an additional $23 million in S.350 for housing stabilization, $43 million for broadband connectivity and other related initiatives as part of H.966, $52 million in housing and rental assistance (also part of the latest economic relief bill), $327 million for healthcare and human services in H.965 and $35 million in S.351 for the agricultural and forestry industries. Information related to applying for economic relief grant funds can be found here or by visiting the ACCD website.

Of the initial $1.25 billion allocated to the State of Vermont from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, $140 million remains in reserve for undeclared purposes. The Vermont Chamber has advocated for the expeditious advancement of additional, widely accessible relief resources for businesses. In the last two weeks, the Legislature has done just that, however, more relief is needed. In the coming weeks, the Vermont Chamber will continue to advocate for additional funding for businesses to aid in their recovery.

FAQs on Spending Grant Funds
With multiple rounds of State funding for business grants through both the Department of Taxes and the Agency of Commerce, many businesses have reached out to the Vermont Chamber for clarity on the rules for spending these funds. Our President, Betsy Bishop, had a clarifying conversation with the Deputy Secretary of the Agency of Administration who answered the most frequently asked questions regarding spending timelines, tracking, and coordination with federal grants.

• Q: Do I need to spend my grant funds prior to December 31, 2020?
  A: No. The application that you submitted proved your loss. The grant is designed to defray that business cost.
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• Q: Do I need to track my expenditures from the grant funds?
  A: No. The application you submitted proves your loss and is the only documentation needed.
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• Q: Am I eligible for state funds if I have received EIDL, PPP, or other federal programs?
  A: Yes, but you can’t receive more grant funds, state and federal combined, than your proven loss. The Tax FAQ states, “Your business will be at risk of duplication of benefits if, at the end of 2020, your business’s COVID-19 related total sales losses from March-December of 2020, when compared to March-December of 2019, are less than the total amount of aid your business has received from COVID-19 related federal aid and insurance. This aid includes the Vermont Economic Recovery Grants, forgiven PPP loans, EIDL Advance Grants, business interruption insurance, and any other federal grants or credits grant your business has received related to COVID-19.”

Here are FAQs from the Department of Taxes for even more answers, including how to apply for supplemental grant awards.

In Case You Missed It

• Vermont’s Mail-in Ballots Are Out. Here’s How to Vote.
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• For This Small State, a Huge Share of Federal Coronavirus Funding
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• Second Stage of Federal PPP Program: Loan Forgiveness Paperwork
• 
  
• Vermont Chamber V.P. of Tourism: Socially Distant Ways to Enjoy Vermont This Fall
• 
  

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Vermont Chamber Submits Testimony on Economic Relief Proposal

Vermont Chamber Vice President of Tourism Amy Spear offered testimony on the economic relief proposal drafted in the House and recently amended and advanced in the Senate. Spear’s testimony called for expanding eligibility to provide resources for businesses who were left behind by the relief programs created in June. The testimony also called for ensuring a significant portion of the relief funds are dedicated to a rescue package for the hospitality industry, including lodging and restaurant entities who were most severely impacted by mandatory operating restrictions related to COVID-19. Carol Lighthall, Executive Director of the Okemo Valley Chamber of Commerce, also offered testimony on behalf of the Vermont Association of Chamber of Commerce Executives that called for relief funds to assist local and regional chambers of commerce who have played a key role in assisting businesses throughout the current economic crisis. Lighthall’s request is additionally supported by the Vermont Association of Regional Planning Commissions and the Vermont Association of Regional Development Corporations.

The Senate’s economic relief proposal includes $76.7 million in economic recovery grants, $4 million to the Department of Tourism and Marketing for the Restart Vermont Marketing Program, and $2.3 million to the Vermont State Colleges in coordination with the Department of Labor to support workforce training for impacted employment groups. The most significant change from the House’s economic relief proposal is a provision that would remove $17 million from the House’s original $100 million for the purpose of providing unemployment insurance recipients with stimulus payments of up to $100 a week, for four weeks. A further breakdown of the Senate’s proposal is included below.

The Vermont Chamber continues to advocate for the advancement of additional funds for existing relief programs and for a set-aside program that would serve industries most impacted by the pandemic. As the current session draws to a close, the Vermont Chamber will continue pushing for meaningful relief to address the unprecedented hardship facing Vermont’s business community.

Senate Not Supportive of Cloud Tax Proposal

On Tuesday the House Committee on Ways and Means advanced a proposal that would impose a tax on vender-hosted pre-written software. Tech industry representatives have repeatedly expressed opposition to establishing a tax on software as a service (SaaS), commonly known as a cloud tax. Such a tax would disincentivize the startup and growth of SaaS businesses in Vermont and add considerable operating costs to other businesses. The Vermont Chamber recently joined dozens of advocacy organizations and business leaders in expressing our continued opposition to the implementation of this tax.

On Thursday the Senate Committee on Finance heard additional testimony from industry representatives that elaborated on the negative impacts the tax will have on Vermont’s tech industry, if implemented. Ultimately, the Committee was not supportive of the provision and the full Senate did not advance the tax proposal. Chair Ann Cummings expressed specific concern about the impact a cloud tax could have on the cost of reservation services for the hospitality sector, which is already suffering because of COVID-19 operating restrictions. The Vermont Chamber will continue working to ensure that Vermont’s tech sector is not placed at a competitive disadvantage or exposed to other economic harm as a result of burdensome regulations or additional tax mandates.

U.S. Removes 10 Percent Tariff on Canadian Aluminum

The Vermont Chamber joined New England states and Canada in expressing opposition to the Trump Administration’s decision to reimpose a 10 percent tariff on Canadian aluminum. The Vermont Chamber made clear in remarks offered in a joint statement shared with the Scott Administration that the majority of Canadian companies source over half of their aerospace parts from the U.S. and that tariffs create uncertainty, raise costs, lower sales revenues, and place our manufacturers at a competitive disadvantage. Responding to industry calls for stability, Vermont Governor Phil Scott joined New Hampshire Governor Christopher Sununu and Maine Governor Janet Mills last week in calling for an end to the tariff.

Facing growing criticism from impacted states and industry, this week the United States removed the tariff. The action was praised by Chris Carrigan, Vermont Chamber Vice President of Business Development, in a recent interview with the Rutland Herald. Please reach out to Chris Carrigan with any questions.

Governor Scott Relaxes Hospitality Occupancy Restrictions

Governor Scott today announced needed changes to business operation guidelines for the hospitality sector. The Vermont Chamber’s four-person lobbying team has been working on behalf of the hospitality industry to secure these changes. Certain lodging occupancy restrictions have been lifted. Read more. Restaurants, catering, food service, and bars can allow 50 percent of fire safety occupancy or one person per 100 square feet, with a maximum of 75 people indoors and 150 people outdoors or their maximum licensed seating capacity, whichever is less. Read more. Bar seating is now permitted with seating that allows for physical distancing of six feet between dining parties and a physical barrier between patrons and bartenders. Read more. Beginning next week the Cross State Travel Information will be updated each Tuesday instead of Friday. The Agency of Commerce and Community Development’s restart guidance page has also been updated with detailed information. As the impacts and challenges of COVID-19 continue, the Vermont Chamber will continue to advocate for operational and financial relief for the hospitality industry.

House Amends Unemployment Insurance Rate Criteria

The House Committee on Commerce and Economic Development established criteria that would enable the unemployment insurance (UI) tax rate schedule, which employers pay into, to adjust necessarily to ensure the UI trust fund remains solvent in the event of a prolonged or abrupt draw down as a result of high future rates of unemployment. The changes were supported by the Department of Labor and business advocates present. While a major increase to the UI tax rate schedule, if triggered, would add costs for employers, if the UI trust fund is drawn down to zero and the state is forced to borrow from the federal government, the economic impact on employers could be more significant. The Vermont Chamber expressed support for the change during brief testimony.

Resource Roundup

• ECHO Launches Two Programs Supporting Vermont Families
  
  • ECHO Virtual STEM Academy provides educational support to meet family and community needs with high-quality, at-home learning. Classes are standards-aligned, one-day-per-week, 6-week learning sequences for K-5th grade students, enrolled in hybrid school programs, homeschooling, or at-home learning pods.
  • ECHO Care & Enrichment is a one day a week (Tuesdays or Thursdays) care program for children in Kindergarten through 3rd grade. It will offer enriching hands-on STEM activities, supported learning time for school assigned work, and access to the museum exhibits and live animals. This fall, there will be 3 four-week sessions.
  • Sign up now! Questions? Email Keely O'Brien at kobrien@echovermont.org.
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• Geographic- and Challenge-Specific Resources
  The Vermont Chamber of Commerce has partnered with On the Fly, a grassroots collection of business experts in the hospitality field. Restaurants and lodging establishments reconsidering how to provide services during the pandemic can consult with the Vermont Chamber of Commerce and On the Fly on designing and implementing change. You can also find additional geographic- and challenge-specific resources on the Agency of Commerce and Community Development page linked here.
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• Vermont Chamber Cohosts Candidate Forums
  With Election Day in Vermont just around the corner, the Vermont Chamber of Commerce teamed up with Let's Grow Kids and the Vermont Housing Finance Agency to cohost nonpartisan governor and lieutenant governor candidate forums next week.
  
  • Watch the full recorded Lt. Governor Forum from Thursday at this link.
  • Register for the Governor Forum this evening, Friday, Sept. 18, at this link.
  • Candidates are answering questions on:
    
    • The growing need for consistent broadband connectivity
    • Inadequate access to high-quality, affordable child care
    • Access to affordable housing in Vermont
    • Investment in rural economic development

In Case You Missed It

• Vermont's Unemployment Rate Decreases to 4.8 Percent in August
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• Tariff on Canadian Aluminum off for Now
• 
  
• Child Care System Adds Hubs Quickly, but Many Families Still Face Big Problem

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.

Senate Reviews House Economic Relief Proposal

The Senate Committee on Economic Development, Housing and General Affairs heard testimony from the Scott Administration and Representative Charlie Kimbell, Ranking Member of the House Committee on Commerce and Economic Development. The Committee specifically reviewed the House’s economic relief proposal. If advanced as passed by the House, the current relief proposal would provide $100 million in additional economic relief for businesses impacted by COVID-19. The Committee has not yet indicated what major changes they will make to the House proposal, if any, but the members of the Committee indicated they would like to reintroduce some funding for a consumer stimulus program.

The Vermont Chamber has pushed for advancement of additional funds for existing relief programs and for a set-aside program that would serve industries most impacted by the pandemic. As the current session unfolds, the Vermont Chamber will continue advocating for meaningful relief to address the unprecedented hardship facing Vermont’s business community.

Vermont Chamber Testifies on Unemployment Insurance Fund

Charles Martin, Vermont Chamber Government Affairs Director, testified in the House Committee on Commerce and Economic Development on the future of Vermont’s Unemployment Insurance (UI) trust fund. Since the onset of the pandemic, the state’s UI fund has been drawn down from a previous high of $500 million to a current level of $300 million. Pandemic related layoffs are expected to regularly occur for the foreseeable future, which will continue to impact the fund. Legislators on the Committee heard from state economists and others about replenishing the fund and impacts replenishment and the associated tax increases could have on employers. Martin’s testimony included cautioning a significant UI schedule jump, which would result in higher unemployment insurance taxes for employers, most of whom continue to suffer as a result of the current economic turmoil.

The Committee did not specify what immediate actions they would take to replenish the fund and instead indicated additional questions related to acceptable solvency in the UI fund need to be answered before major decisions about the fund’s future can be made. While the Vermont Chamber recognizes the essential nature of maintaining a strong UI fund, employers are ill equipped to withstand significant tax increases at this time and our engagement with the Legislature will continue to reflect this reality.

Vermont Chamber Urges Changes to Act 250 Proposal

The Vermont Chamber joined the Lake Champlain Chamber and the Regional Development Corporations of Vermont in recommending changes to a housing bill that, if implemented, would serve to reintroduce Act 250 provisions related to areas of enhanced designation that were removed from the Act 250 proposal recently advanced by the Senate. Last week the Senate made major changes to Act 250 reform legislation that struck sections related to development in areas of enhanced designation. The Vermont Chamber and others in the economic development community were supportive of previously included provisions that would have removed designated downtowns from Act 250 jurisdiction in some instances. If implemented, these provisions would encourage sustainable economic growth and contribute to creating more affordable housing. The Vermont Chamber will continue pushing for the reintroduction of designated downtown exemptions as the current legislative session unfolds.

Senate Approves Additional Hazard Pay Bill

The Senate advanced changes to Vermont’s hazard pay program. S.352 was passed by the Senate and includes an additional $2.5 million in funding for the program as well as an amendment that would direct $12 million for childcare workforce stabilization. S.353, also passed by the Senate, would enable grocery and retail workers to be eligible for hazard back pay while adding $19.5 million to the program. The changes now require approval in the House.

New England Governors Oppose Tariff on Canadian Aluminum

The Vermont Chamber recently joined New England states and Canada in expressing opposition to the Trump Administration’s decision to reimpose a 10 percent tariff on Canadian aluminum. Chris Carrigan, Vermont Chamber Vice President of Business Development, made clear in remarks offered in a joint statement shared with the Scott Administration that the majority of Canadian companies source over half of their aerospace parts from the U.S. Carrigan also pointed out that the tariff on aluminum will add injury to an already impacted aerospace manufacturing industry suffering demand shock from a drastic decline in passenger traffic for commercial aviation due to the pandemic. Responding to industry calls for stability, Vermont Governor Phil Scott joined New Hampshire Governor Christopher Sununu and Maine Governor Janet Mills this week in calling for an end to the tariff. If you have any questions or would like to express how this tariff is impacting your business, please contact Chris Carrigan.

Committee Continues Discussion of Possible “Cloud Tax”

The House Ways and Means Committee continued discussion of possibly implementing a tax on prewritten software. Early in 2020 tech industry representatives descended on the State House to express opposition to establishing a tax on software as a service (SaaS), commonly known as a cloud tax. Such a tax could disincentivize the startup and growth of SaaS businesses in Vermont and add considerable operating costs to other businesses. Prewritten software purchased on storage media or downloaded to a computer is currently taxable, while prewritten software accessed remotely via the internet is not. The Committee is again considering implementing a cloud tax as a possible means to raise an estimated $6.5 million in revenue to address shortfalls in the education fund. Considering the overall costs to the business community and the unprecedented economic uncertainty facing Vermont, the Vermont Chamber opposes the implementation of a SaaS tax, especially given the current limited ability for stakeholders to engage the Legislature. If you have questions or concerns about a SaaS tax, please contact Charles Martin.

Resource Roundup

• Vermont Chamber Cohosting Candidate Forums Next Week
  With Election Day in Vermont just around the corner, the Vermont Chamber has teamed up with Let's Grow Kids and the Vermont Housing Finance Agency to cohost nonpartisan governor and lieutenant governor candidate forums next week.
  
  
  • Candidates will be asked how they would approach current issues, answering questions on:
    • Inadequate access to high-quality, affordable child care
    • Access to affordable housing in Vermont
    • The growing need for consistent broadband connectivity
    • Investment in rural economic development
  • 
    
  • Register for next Thursday's Lt. Governor Forum at this link.
  • 
    
  • Register for next Friday's Governor Forum at this link.
• 
  
• National Restaurant Association Wants to Hear Your Restaurant Story
  The National Restaurant Association is asking restaurant owners and supporters to record their experiences managing a restaurant during the pandemic. The videos will be used to further advocacy efforts on Capitol Hill. Tell Congress that restaurants need additional relief now. Record your video here.

In Case You Missed It

• House Poised to Pass Budget Bill With State College ‘Bridge Funding’
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• Veto Likely as House Sends Global Warming Solutions Act to Governor’s Desk
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• House Approves $7.15 Billion State Budget
• 
  
• Buy Local Vermont Program Fully Subscribed in Less Than 24 Hours

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