Governor Offers Good News for Economic Recovery
New Business Grant Proposal Essential to Recovery
Unemployment Insurance Changes Considered in Senate
Vermont Chamber Shares Tourism & Hospitality Priorities with Tourism Caucus
Senate Considers Exempting Military Retirement Pay from Personal Income Tax
Secretary of State Shares Legislative Priorities with House Committee
State Treasurer Recommends Changes to State Pension and Retirement Funds
Resource Roundup
In Case You Missed It
Governor Offers Good News for Economic Recovery
Included in Governor Scott’s $6.83 billion budget proposal were sizable investments aimed at strengthening the economy, improving workforce, and revitalizing State infrastructure. With the help of federal relief funds and a temporary increase in tax revenue, the Governor’s plan prioritizes the use of $210 million in available “one-time” spending to improve economic recovery. The Governor was careful to point out that this $210 million should be used for economic growth and to lower future costs, rather than to support new programs that may not be sustainable when federal funds become unavailable.
The spending plan reiterated the Governor’s support for $10 million proposed in the Budget Adjustment Act to provide grants to businesses that were ineligible for or have otherwise been closed out of past relief programs. Over the last few weeks, the Vermont Chamber has worked to support this proposal in the Legislature. Among some of the other Vermont Chamber priorities highlighted in the budget proposal are $20 million to expand broadband in underserved areas, $1 million to start a state marketing fund that would be replenished in future years with above projected rooms and meals tax revenues, $10 million to boost outdoor recreation in every county, a $1.75 million increase in the Downtown and Village Center Tax Credit program, $25 million to revitalize brownfields, an additional $20 million to the Vermont Housing and Conservation Board to support new builds, $20 million in additional funding for Vermont State Colleges, and $5 million to augment the Downtown Transportation Fund. The Governor also proposed new investments to improve the state’s workforce, including $500,000 to the Department of Labor to modernize training program enrollment, $1.4 million to offset a proposed tax exemption designed to recruit military retirees, and $1.25 million to help the state retain nursing graduates.
The proposal did not include additional funding for business relief grants in Fiscal Year 2022. State leaders are anticipating that a combination of the second round of PPP funds and a potential additional round of discretionary federal funds will largely serve to support future economic recovery. The Vermont Chamber recognizes this possibility and supports those avenues for relief. However, we understand that unmet need could easily exceed the capacity of current relief proposals, including funding proposed in the Budget Adjustment Act. We will continue to encourage the Legislature to develop a plan to administer additional discretionary funds if and when they are made available.
The budget proposal supports many of the Vermont Chamber’s longtime priorities, and we applaud Governor Scott for proposing these widely impactful economic investments. We look forward to advocating for our shared budgetary goals as they are considered by the Legislature.
New Business Grant Proposal Essential to Recovery
The Senate Committee on Economic Development, Housing and General Affairs reviewed a proposal by the Scott Administration that would provide $10 million for a grant program to assist businesses and organizations that have ongoing, unmet need due to the COVID-19 public health emergency and were closed out of past relief programs. The Agency of Commerce explained the proposal along with the Administration’s other community and economic development priorities. The new grant proposal, introduced as part of the Budget Adjustment Act, is essential to helping businesses weather the ongoing economic downturn. The Vermont Chamber is supportive of the proposal and helped to organize witness testimony in favor of the grants when they were considered by the House Committee on Appropriations.
The Vermont Chamber is currently working to support the proposal in the Senate. Please contact Vermont Chamber Government Affairs Director Charles Martin with any questions or if you would like assistance providing testimony in support of the program.
Unemployment Insurance Changes Considered in Senate
The Senate Committee on Economic Development, Housing and General Affairs considered an amendment to Act 91 to extend provisions that, in certain instances, can hold employers harmless for costly unemployment insurance (UI) rate impacts when that employer furloughs an employee for reasons related to COVID-19. With the pandemic lasting much longer than anticipated, amendments to the existing legislation are needed. The latest amendment proposal would relieve employers of this obligation if the employer is able to demonstrate they were unable to rehire or offer to rehire the individual before January 1, 2021, because their business had not resumed full operations. The Vermont Chamber has worked to support this provision, citing concerns about the difference in pace of economic recovery various sectors will experience.
The Department of Labor proposed allowing for universal charge relief to be applied to all chargeable claims that occurred between March 15, 2020, and December 31, 2020. For the 2021 calendar year, the Department’s proposal also suggests requiring an application process for employers to request charge relief by certifying adherence to one of the COVID-qualifying criteria already outlined in Act 91. If accepted, the charge relief would apply during the 2021 calendar year, for as long as the charge relief is authorized, and would be part of the calculation and rate set in 2022.
The Vermont Chamber is communicating with members of the Committee on UI charge relief and will continue to advocate for a legislative result that addresses the ongoing concerns of impacted employers. Please contact Charles Martin with any questions.
Vermont Chamber Shares Tourism & Hospitality Priorities with Tourism Caucus
The Vermont Chamber’s Vice President of Tourism Amy Spear met with the Tourism Caucus this week to provide an overview of the tourism and hospitality work of the Chamber and discuss legislative priorities specific to the sector.
The impacts of COVID-19 have been devastating and incredibly challenging for businesses in the sector. With continued uncertainty looming and depressed business levels likely until 2022, the Chamber is looking for special help for the industry that would provide meaningful regulatory and financial support through additional business grants targeting the most impacted industries, adjustments to alcohol-related regulations, third-party delivery app consent language, reform of Vermont’s short-term rental regulations with a focus on moving towards a registration system, and protecting and enhancing Vermont’s destination marketing funds.
If you have questions about the Vermont Chamber’s tourism and hospitality priorities, please contact Amy Spear.
Senate Considers Exempting Military Retirement Pay from Personal Income Tax
The Senate Committee on Finance reviewed legislation that would exempt military retirement pay from Vermont’s personal income tax. The plan would phase in an exemption over two years, with all taxable military retirement pay being exempted from Vermont’s personal income tax by 2022. Vermont is currently one of only seven states that fully taxes military retirement pay, which disincentivizes military retirees from moving to Vermont upon conclusion of their service. The proposal is supported by a bipartisan group of legislators and has companion legislation in the House. Governor Scott also supported the exemption in his budget address, offering a $1.4 million budget proposal to offset short-term associated revenue impacts.
Military retirees often conclude service in their 40s and typically possess a high degree of 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 incentivizing military retirees to move to Vermont would increase the diversity of our communities while also strengthening the workforce. The Vermont Chamber has supported this exemption in past legislative sessions and worked to support the issue in advance of the 2021 session. We will continue to advocate for the passage of the exemption as the legislative session unfolds.
Secretary of State Shares Legislative Priorities with House Committee
Secretary of State Jim Condos and Deputy Secretary of State Chris Winters briefed the House Committee on Commerce and Economic Development on the Secretary’s legislative priorities. The agenda included items to improve election processes and other proposals related to the Office of Professional Regulation (OPR). During testimony, Deputy Secretary Winters explained that Vermont’s professional regulatory structures focus primarily on ensuring public safety, which enables the state to have less broadly expansive business regulation, compared to some other states. Included in new business-related proposals offered by the Secretary’s office were a handful of recommendations related to medical professionals, as well as a registry requirement for home improvement contractors. The Secretary’s office is also planning to review existing regulations related to real estate professionals. The Legislature annually considers an OPR bill.
In October, the Secretary of State joined Vermont Chamber members to discuss election frameworks during the pandemic. The Vermont Chamber will continue working with the Secretary’s office to help communicate regulatory changes that impact the business community.
State Treasurer Recommends Changes to State Pension and Retirement Funds
For years, the unfunded liabilities in the state’s retirement systems, which include state employees and teachers, have grown beyond Vermont’s ability to pay, currently requiring a $300 million annual payment from the State. With the unfunded liabilities now approaching $3 billion, State Treasurer Beth Pearce issued a report this week, making recommendations that call for increased State payments into the fund, greater employee and teacher contributions, and changing the method for calculating benefits. The Treasurer also recommended that none of these changes should impact current retirees and that the system maintain the defined-benefit designation. These recommendations are designed to put Vermont’s retirement systems on a sustainable path. Treasurer Pearce also joined the Vermont Chamber this week for an Economic Conference seminar to discuss Vermont’s debt strategy and credit rating and the outlook for the State’s pension plans.
Resource Roundup
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VT Economic Conference Recording: Financial Outlook and Pensions Post-COVID
About 150 attendees joined the Vermont Chamber on Wednesday for our Vermont Economic Conference seminar, where they heard from Vermont State Treasurer Beth Pearce. The discussion included Vermont's debt strategy and credit rating, the outlook for the State’s pension plans, and more. Watch the recorded event. Register for the rest of our Vermont Economic Conference through February 17. -
PPP Loans Available
This month, the U.S. Small Business Administration reopened the Paycheck Protection Program loan portal to all participating PPP lenders, including community banks, credit unions, farm credit institutions, and more. Learn more and apply.
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