[co-author: Jessica Griswold]
Senate approves budget
On Friday, the Senate finally approved the budget of $ 7.17 billion for fiscal year 2022, H.439. Senate Chair for Funds Jane Kitchel, D-Caledonia, called it “as complicated a budget as I ever had to put together in my Senate time” due to the spate of federal aid to Vermont for coronavirus relief and an unexpected $ 211 million US dollar surplus.
The bill spends $ 478.5 million on funding under the Federal American Rescue Plan Act while only considering part of Governor Scott’s ARPA spending proposal. Kitchel said the governor’s plan does not focus enough on legislature funding priorities, including structure of service delivery, court reopening, and college needs. Scott had asked lawmakers to put all ARPA expenses on a separate invoice. Kitchel denied that request and instead placed all ARPA expenses in a specific section of the household bill.
Budget highlights include:
ARPA issues:
• $ 20,000,000 to the Commerce and Community Development Agency
• for grants for economic recovery;
• $ 11,000,000 to the Agency for Commerce and Community Development for the redevelopment of industrial sites;
• $ 11,000,000 to the Department of Economic Development to fund priority capital projects across the state as determined by the Regional Development Corporations or Regional Planning Commissions, or both;
• US $ 1.5 million for EMBRACE grants;
• $ 101.8 million for broadband;
• $ 500,000 to the Agency for Education for grants to local
• Education agencies for buying locally produced food;
• US $ 2,000,000 in FY 2022 to the Department of Labor for
• apprenticeship programs; and
• $ 5,000,000 to get one year of free tuition on the last dollar
Basic studies for critical careers.
General fund expenses:
• $ 150 million general fund reserve for pension underfunding and $ 200,000 for a pension task force established to make recommendations for the next legislature;
• $ 2.7 million to increase the Reach Up benefit to the 2021 needs standard, an increase of $ 132 per month;
• Core funding to clear a backlog of judicial workload due to the pandemic;
• One-off funding from the General Fund to support several Special Funds, including Forests and Parks and Law 250; and
• $ 9.5 million for the Environmental Contingency Fund, of which $ 4.5 million will be allocated to school PCB testing, in addition to $ 500,000 for the General Health Fund that the Vermont Department of Health provides for Dedicated to PCB testing in schools.
House Commerce is considering changes to unemployment insurance bill
The hotly debated Unemployment Insurance Bill, p.10, left the Senate with a new dependent benefit of $ 50 per month for UI recipients, but no adjustment to the UI Trust Fund formula. Companies sought an adjustment to accommodate the pandemic that resulted in an anomaly that increases UI taxes for employers.
The House Commerce Committee is considering a strike-all change to remove 2020 from the formula. The tariff plan would likely increase to Schedule 3 for the next year, Schedule 4 for the following two years, and then begin to decrease. While companies would pay a little more in the near future than under a Schedule 1 freeze, they believe that is preferable to the language the Senate has passed.
That committee also received a thorough review of the newly enacted childcare benefits in the American Rescue Plan Act from the Joint Fiscal Office. The Senate Economic Development Committee added the $ 50 contingent support before these new benefits were made clear to lawmakers. In light of this development, the House Commerce Committee has proposed removing the benefit.
Senate committee reduces money for economic development
H.159 has become the Session Economic Development Bill for Targeted Project Spending. As passed by the House of Representatives, the bill included one-time funding from ARPA funding for tourism and marketing, the UVM bureau for engagement, assistance in writing federal grants for technology-based industries, a BIPOC business development project, and money for downtown revitalization projects.
The Senate Committee on Economic Development, Housing and General Affairs responded to instructions from the Senate Committee on Budgetary Funds to cap the budget and scalpeled the House version of the bill, drastically cutting spending. Sections with reduced funds:
• Tourism and Marketing – Reduced from $ 2.5M to $ 2M.
o $ 1.25 million in direct out-of-state marketing.
o US $ 750,000 to local chambers to develop consumer incentive programs.
• Technology-Based Economic Development – Decreased from $ 3M to $ 1.8M.
o $ 200,000 in assistance with federal grant writing.
o $ 400,000 in matching grants for companies receiving federal grants.
o $ 200,000 for an industry research partnership program.
o $ 1 million to UVM to complete the launch of the Office of Engagement.
• Better Places Program – Reduced from $ 5 million to $ 1 million.
o Subsidies to local authorities to create living spaces.
• Microbusiness Development Program – Reduced from $ 2.2M to $ 1.5M.
o Base funding increased by $ 200,000.
o $ 1.5M to support new micro-businesses affected by Covid-19.
The bill includes initial funding for an Entrepreneurs’ Seed Capital Fund, a study of the state’s post-secondary vocational and technical education system, reach and technical support for BIPOC businesses, and an international business attraction and investment program.
The Committee is still considering adding the sections “Economic Recovery Bridge Grants” and “Capital Investment Grants” to the law.
Output bytes
Grants for economic recovery – While the governor has stated that there is an unmet business need of $ 500 million in connection with the pandemic, lawmakers have only proposed $ 50 million for a new round of grants. The Senate Economic Development Committee recommended spending $ 20 million this year and $ 20 million next year. Senate funding reduced it to just $ 20 million that year. The Senate Economic Development Committee heard about the need for additional funding from the Vermont Lodging Association, the Vermont Association of Wedding Professionals, the Lake Champlain Chamber, and the Vermont State Chamber. They shared their proposals for grant criteria that would include six months of fixed costs with a cap of $ 300 million. The Senators will have further discussions in the coming days to determine how the funds will be allocated.
Taxation of PPP grants – The House Ways and Means Committee continues to address the issue of taxing grants under the Federal Payroll Protection Act for 2021. If lawmakers do not approve a state link to recent federal tax changes, the grants will be taxed. Additionally, lower-income Vermonters will lose extended benefits under the Earned Income Tax Credit and Child and Care Credit.
Broadband – The Senate Finance Committee continues to consider establishing an agency to guide state efforts to provide universal broadband coverage. As passed by the House of Representatives, H.360 would create the Vermont Community Broadband Authority, an independent body responsible for coordinating the establishment of Vermont’s communications union districts. Community-run CUDs would be tasked with providing universal access to high-speed broadband. To address concerns about expertise, expediency, and accountability, Senate Finance is considering a different approach: creating a position as Executive Director or Deputy Commissioner within the Civil Service Department. Committee members generally agree that responsibility should remain with government when providing broadband access is a fundamental government obligation.
Bridge Grant Guidelines for Gap Companiess – Legislature allocated US $ 10 million to the American Rescue Plan Act to provide grants to companies that previously did not receive state or federal funding. The Agency for Commerce and Community Development has published the guidelines for bridge grants. Firms that have received low levels of federal support for PPP grants may be eligible if the US $ 10 million allocation is not exhausted.
Restart dishes – The Senate has proposed a one-time ARPA grant of $ 16.4 million over a two-year period to invest in the judicial system that will allow the courts to work in person. Courts have been closed since the beginning of the pandemic, with limited remote options, and this has left a significant backlog in civil and criminal cases, including child maintenance and evictions. “If you don’t have legal proceedings, you have no settlements,” commented one senator on the backlog. The bill also empowers six-person juries in civil matters.
PCB testing in schools – The Senate proposed $ 4.5 million for indoor air quality testing for PCBs (polychlorinated biphenyls) in public and independent schools. No funds were made available for the renovation. The costly printed circuit board problem in schools became known when Burlington High School was forced to close its doors due to high levels of PCBs. The state then had to spend $ 3.5 million to retrofit a closed Macy’s store in downtown Burlington so it could learn in person. Refurbishing the Burlington High School site could cost $ 7 to $ 12 million and still may not bring PCBs to approved levels. Officials are now considering completely demolishing the building.
Amending Law 250: the next three weeks – This week lawmakers continued to discuss H.120, a bill that would update Law 250. The bill seeks to address climate change with a revised Skills and Development Plan, a newly delegated supervisory authority for district commissions, and propose approval changes to criteria. Many changes to the criteria of the draft law follow the recommendations of the legislation that the General Assembly worked on over the past year. Administrative proposals to reorganize the management of the Committee on Natural Resources and derogations for designated city centers, villages and neighborhood development areas have yet to be examined by the Committee.
Comments are closed.