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Fix for Business Grants Advances
The Senate Economic Development, Housing and General Affairs Committee approved a new business support program that establishes a forgivable loan program allowing the Vermont Economic Development Authority (VEDA) to issue loans up to the lesser of $200,000, six months of eligible fixed costs, or the amount of cumulative decline in adjusted net operating income during the COVID-19 public health emergency in 2020 and 2021. They appropriated $20 million for this program which is $6 million less than was promised last year.
The Vermont Chamber advocated for a higher cap of up to $500,000 per eligible business, based on six months of operating expenses, and to remove the requirement that businesses be in operation before January 2020 to serve those who opened right before or during the pandemic. Part of the Chamber’s advocacy included bringing the stories of businesses in impacted industries to the attention of the Committee members ahead of a vote on the bill.
The testimony clearly made an impact, as Committee members discussed a direct communication from Beth Kennett of Liberty Hill Farm in a hearing on Tuesday. The Committee was also engaged and receptive to Chris Kesler from Black Flannel Brewing, who testified that this program was intended to help businesses not only survive the pandemic, but also get back to a place where they can thrive. With these representatives from the lodging, brewing, and restaurant industries showing up to make their voices heard, the Committee got the full picture of the issues businesses with ongoing need are facing as they struggle to remain afloat without the necessary aid.
The Committee voted this bill out favorably, and it will now need to make stops at several committees including Senate Finance and Senate Appropriations before advancing to the Senate floor and then the House. There is still work to be done on this bill before final passage. The cap for the VEDA forgivable loan is far too low to provide adequate relief, particularly since payroll would likely not be an eligible cost. In addition, the bill as amended still contains several provisions of concern, including a minimum wage increase to $15/hour by 2024 and a supplemental unemployment insurance benefit of an additional $25/week per person. The minimum wage increase would come at a time of record-high wages when most employers are already paying above $15/hour for labor, and this would add additional costs to the smallest employers who can least afford the increase. The bill allocates $8 million of ARPA funding to pay for the UI supplemental benefit, which will sunset in 2024, but because the UI system’s projected costs are wildly unpredictable, it is unclear whether this will be sufficient funding. There remain questions about how the benefit increase will be paid for if and when this funding is depleted. The Vermont Chamber will continue to raise these issues as the bill progresses.
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