PO Box 490, St. Albans Bay, VT 05481
LEGISLATIVE COMMITTEE BLOG
The Governor delivered a $6.8 billion budget proposal this week that keeps the base budget steady and uses $210 million in federal money for one-time investments. After months of well-deserved pessimism about the state’s economic picture, last week’s optimistic revenue forecast allowed the administration to go back to the budget drawing board and propose using federal one-time money for one-time projects and without having to tap that same windfall or state reserves for base spending. Some of the highlights include:
The Governor’s proposed budget also includes an additional $53 million in state IT projects. The list includes:
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As legislators contemplate exempting certain new broadband infrastructure from property taxes as a last-mile buildout strategy, they are finding out it’s a complicated balancing act between ratepayers and property taxpayers. Washington Electric Coop requested an exemption on the value of future fiber buildout on their electric poles. WEC officials testified that exempting the new infrastructure could allow them to keep rates neutral, while providing financing, stringing poles and then partnering with Communication Union Districts acting as Internet service providers who would lease and bring fiber to homes.
WEC estimates that 75 percent of its customer base is unserved or underserved, and the project aims to reach all of those homes. House Energy and Technology’s draft bill contains such a provision.
Property tax statutes predate fiber buildout and do not contemplate a “broadband” tax exemption. Piecemeal legislation over the years addresses a patchwork of different regulated and unregulated entities that provide Internet and have different taxation schemes. The tax department suggested that those laws could use a rewrite. Another wrinkle is that property taxes rely on assumed growth, and “freezing” values in time could wreak havoc on the statewide education property tax.
A representative from the Public Utility Commission told the Senate Finance Committee that the WEC situation is likely to become a legal matter before it, and would not comment on specifics. The PUC wants to avoid a “cross-subsidy” in which electric ratepayers pick up the tab for buildout that is happening primarily to bring internet to people’s homes. Pointing to the growing convergence between the need for fiber and the need for effective electric service, she stated, there is an undeniable electric component to the buildout.
The Senate Committee on Economic Development, Housing and General Affairs reviewed legislation this week that addresses business unemployment experience ratings during COVID-19, although only for 2020. If an employer can show that it was unable to rehire staff before January 1, 2021 because it had not resumed full operations, the employer will be eligible for relief of charges for benefits paid in 2020. The employer will have to submit an application along with information to the Department of Labor before March 15, 2021 that includes a certification that the employer satisfies the requirements for each individual laid off during the Governor’s emergency order.
The Department of Labor does not have the capacity to investigate every business to confirm compliance, so it will accept a certificate of attestation that the business has either tried to rehire laid off employees, or it is still in a full or partial shutdown and not able to bring these employees back to work. The DOL is preparing a draft application and is on track to notify businesses in a timely manner.
Businesses may be audited and penalized later should they not be honest in reporting rehiring practices. The committee briefly discussed 2021 unemployment charges, but this clearly needed more attention.
The Senate Committee on Natural Resources voted unanimously to reject Governor Scott’s executive order to restructure the Act 250 Natural Resources Board. Scott had sought to create a new board made up of three full-time professionals who would assume the duties of the original board and rule on all major Act 250 permit applications. The reorganization would have shifted authority from the states nine district commissions to the new board.
State law provides that only one legislative chamber needs to disallow an executive order for it to become null and void. The resolution to disallow the executive order will now go before the full Senate. If the Senate votes to approve it, that action kills the executive order under the statute – it does not need to go to the House for a vote.
The governor’s general counsel believes the state statute is unconstitutional, and the executive order states that both chambers must vote to reject. The action taken today by the Senate committee may have set the stage for a legal challenge.
The COVID-19 pandemic has heightened socioeconomic disparities between connected and unconnected Vermonters. Acknowledging that many rural areas are still struggling without Internet access for remote schooling, work, and telehealth, the House Committee on Energy and Technology has drafted a bill related to accelerating community broadband deployment.
The bill proposes to create the Vermont Community Broadband Authority to coordinate partnerships and innovative financing strategies for Communication Union Districts. Much like the now-defunct Vermont Telecommunications Authority, VCBA is intended to alleviate the Department of Public Service’s perceived conflict as both a CUD resource and a regulatory body for providers in the marketplace. The bill limits financing opportunities to eligible CUDs.
In addition to administering the Connectivity Initiative that the legislature created two years ago, VCBA will administer a $60,000 Community Broadband Innovation Grant Program and a $36 million Broadband Expansion Loan Program to provide new CUDs with startup capital. Because these borrowers are generally high-risk, VCBA will make loans only to CUDs that demonstrate a promise of long-term viability in the business. VCBA will retain 50 percent of grant awards until recipients satisfy all Program requirements.
To finance VCBA efforts, the committee has proposed an increase in operational expenses from $120,000 to $240,000 and up to $27 million in state appropriations. Further, the bill proposes a one-time appropriation of $1.26 million to the Vermont Economic Development Authority for loan loss reserves and provide credit enhancements to help CUDs to secure private financing.
After years of data collection and analysis, the Vermont Tax Structure Commission published a draft final report on January 7, 2021. Chair Deb Brighton, Vice Chair Stephen Trenholm, and Member Brian Kleppner joined the Senate Finance Committee this week to testify about the Commission’s goal of creating a more simple, equitable, and sustainable State tax system.
The testimony focused on three of the eight recommendations included in the report. First, Brighton recommended restructuring the homestead education tax by eliminating the property tax credit and implementing a set education tax based on income. To calculate the new education tax rate, taxpayers would divide the amount of spending per pupil in a given school district by income yield. In effect, the education tax would increase income taxes for Vermont’s high-income bracket while decreasing their property taxes.
As part of this first recommendation, the report also suggests creating a renters’ credit for Vermonters who are currently paying property taxes through their rent. Restructuring the homestead education tax was the most contentious recommendation by the committee
Kleppner suggested broadening the sales tax base and using the gain to protect low-income Vermonters and reduce the sales tax rate to 3.6 percent. The report shows that a sales tax exemption for groceries is an ineffective means of supporting Vermont’s low-income households. While the State is foregoing $100 million of potential tax revenue by excluding groceries, the portion of that represented by low-income Vermonters is roughly $30 million. The Commission found no compelling reason to exclude any consumer transaction of goods or services except healthcare, casual sales, and business inputs.
Trenholm listed potential ways to modernize income tax features, most of which required further research.
Vermont Roundtable advocates for investment in early childcare
Weatherization trending in Montpelier
Courts weigh in on school vouchers for religious schools
The House Government Operations Committee met on Thursday to discuss Vermont's overwhelming pension-underfunding problem. Joint Fiscal Office staff member Chris Rupe presented a report that summarizes the state’s complex pension systems and outlines why they are in such bad condition.
Between FY21 and FY22, the unfunded liability for the Vermont State Employees' Retirement System increased by $225 million, and the determined employer contribution – the yearly contribution from the state – is projected to increase by $36 million. Moreover, the same projections increased by $379 million and $60.6 million respectively for the Vermont State Teachers' Retirement System. The two funds combine for an increase of $605 million in unfunded liabilities and a projected $96.6 million contribution from the state in FY22.
Recent changes in assumptions based on employee experience, investment performance, funding history, and demographic and economic forecasts resulted in the updated deficit projections. Despite the range of possible reduction options in the Treasurer’s report, the real challenge is finding one solution to eliminate underfunding increases entirely.
The committee discussed the possibility of the State filing for bankruptcy as a way of avoiding its unfunded obligation, but that prospect was not seriously considered. Federal law does not allow states to declare bankruptcy. Even if Congress provides a COVID-19 exception, bankruptcy would not eliminate the State’s existing unfunded liabilities.
The prospect of switching employees from defined benefit to defined contribution pension plans hit a nerve with many committee members. While the suggestion may be subject to further discussion, it seems unlikely to receive serious consideration.
The legislature passed a law last fall that was intended to make it easier to build more housing at greater density by prohibiting certain deed restrictions, specifically for accessory dwelling units (e.g., mother-in-law apartments) and small lots with access to water and sewer.
After the law was enacted, Vermont’s real estate community raised concerns about the breadth of the language, which was likely to invalidate many common deed restrictions, including those used by homeowner associations and those added as part of settlement agreements. The law could be interpreted to mean that other state statutes, such as environmental laws, could not limit any development that is otherwise allowed under local bylaws.
S.14 corrects and narrows the language in Act 179. It states that deed restrictions added after March 1, 2021 are invalid if they would prohibit ADU’s and development of existing small lots. Both were part of the original intent of Act 179 and both encourage infill development and increasing housing density. The bill also seeks to prevent private parties from overriding the intent of Act 179. It would take effect retroactively on January 1, 2021 in order to avoid invalidating any deed restriction under the prior language. The bill was reported on the Senate floor on Friday, and will be up for a final vote next Tuesday.
The House Committee on Natural Resources, Fish and Wildlife and the Senate Committee on Natural Resources met jointly this week to hear testimony on Executive Order No. 02-21, which makes significant changes to the makeup of the Act 250 Natural Resources Board. The current board—comprising a full-time chair and four citizen volunteers—coordinates the nine district commissions, provides legal and technical support and participates in Act 250 appeals.
The governor’s executive order gives more authority to the NRB by creating a new board made up of three full-time professionals who would assume the duties of the original board and rule on all major Act 250 permit applications. For each major permit application deliberation, the new board would be joined by two voting district commissioners from the district in which the permit originated.
Legislators had barely scratched the surface of the merits of the order when the conversation was sidelined by a constitutional question. State law provides that within 90 days, only one legislative chamber needs to object to an order for it to become null and void. However, the last paragraph of the governor’s order reads that it “shall take effect on April 15, 2021, unless disapproved by both houses of the General Assembly.”
Jaye Pershing-Johnson, General Counsel, Governor's Office, testified that she was “putting the legislature on notice” that she considers the state statute to be unconstitutional, and she cited U.S. Supreme Court case law invalidating a Congressional one-house veto.
Meanwhile, a lawsuit filed Wednesday on behalf of a Berlin environmental attorney makes a sweeping constitutional argument challenging the authority of executive orders to circumvent existing law. Committee members were advised by legislative council that although a challenge to the law has been filed, they should proceed under the law currently on the books. If that’s the case, there may be a straight up or down vote on the executive order from one or both houses of the legislature.
The governor’s $10 million Economic Recovery Grant proposal is not ready for inclusion in the Budget Adjustment Act quite yet, according to members of the House Commerce and Economic Development Committee. On Wednesday, the committee spent a majority of the day discussing the proposal with Department of Economic Development Commissioner Joan Goldstein, but reported to the House Appropriations Committee on Friday that they were not in agreement with the governor’s proposal at this time.
The proposal would use General Fund money to provide grants to businesses that were ineligible or received only partial funding from the Paycheck Protection Program or Economic Injury Disaster Loans. Commissioner Goldstein said that some businesses that are not eligible for the second draw of PPP because they didn’t suffer the required 25 percent revenue loss may have high fixed costs and COVID-related costs requiring financial help. The grant would also assist businesses established after February 15, 2020 that are ineligible for the federal aid programs. Goldstein reported that 430 new rooms and meal tax licenses were registered during the pandemic, only a portion of the new businesses that may require assistance over the next few months in order to survive.
The committee was concerned that the determination of need would be complicated and inaccurate. Committee Chair Mike Marcotte, R-Newport, suggested that Goldstein “flesh out” the proposal and wait until the BAA is sent to the Senate to propose it. There will be a public hearing on the BAA on Monday before the House Committee on Appropriations votes on the bill.
The Senate Committee on Economic Development, Housing and General Affairs continued work on S.10 this week, a bill that would extend COVID-related unemployment insurance changes that the legislature made in Act 91 of 2020.
Under Act 91, an employer’s experience rating and unemployment insurance tax rates can’t be adversely impacted by unemployment insurance benefits paid to employees who were laid off or quit because of COVID-19. For an employer to be relieved of UI charges, they are required to re-hire the employee or offer employment after a reasonable period of time. Due to the overwhelming number of UI claims filed, the Department of Labor requested that universal charge relief be extended for 2020, as the department did not have the capacity to investigate whether the re-hiring requirement was met for each claim. Labor Commissioner Michael Harrington told the committee that 95 percent of layoffs were COVID related, so inappropriate charge relief would be rare. Harrington also suggested that for 2021, employers could apply for charge relief with a short, five-question survey, with random audits enforcing the re-hiring requirement. The committee will continue work on the bill next week.
The legislature’s E-Board adopted an official state revenue forecast this week. Legislative economist Tom Kavet delivered good news to legislative money committees, saying that “sufficiently massive” federal spending has fended off a recession. Seven billion dollars in federal spending in Vermont ($5 billion from CARES I, PPP, and pandemic unemployment and an estimated $2 billion still to come from CARES II) have stimulated spending and economic activity, significantly boosting state revenues. Consumption taxes are particularly strong and e-commerce is booming.
Total revenues in all three major state funds – General, Education, and Transportation – have rebounded from more pessimistic August forecasts. The pessimism was warranted at the time. There is little historic basis on which to forecast predictions during a pandemic. The negative effects of the pandemic were well understood – unemployment and a cessation of many activities that drive the economy. But the positive effects of federal spending on personal and corporate spending required the benefit of time and tax receipts to better understand. Funds are now expected to fall only $20 million below pre-pandemic FY21 estimates and a total of $77 million above earlier FY22 estimates. These revenue numbers lay the foundation for the governor to propose the FY22 budget.
Property taxpayers heard instant relief. The December 1, 2020 Tax Commissioner letter that helps set property tax rates foretold a nine cent increase. But with very strong sales and use tax receipts, and higher purchase and use tax income, that estimate is now down to two cents.
Under Act 137, the Vermont Legislature appropriated $17.4 million of the State’s Coronavirus Relief Funds to broadband expansion programs. The Department of Public Service administered these programs and finished the year with an estimated $3.9 million unspent. Federal restrictions, time constraints, geographic limitations, and labor shortages are a few of the barriers that the DPS faced.
Vermont has experienced a considerable rise in startup Communications Union Districts due to growing frustration about the inaccessibility of broadband services. New CUDs require funding, information sharing, feasible business plans, and resources such as equipment and experienced laborers. To that end, State and community support, innovative partnerships, and workable finance models are critical to broadband expansion.
On January 15, the House Committee on Energy and Technology took testimony from Consolidated Communications Senior Director of Fiber Build Strategy Jeffrey Austin, who said the company was eager to work with new CUDs. The company has partnered with Searchlight Capital Partners to launch a major five-year accelerated fiber-to-the-premise program, expecting to reach 53,000 Vermont addresses with a 500-mile fiber build-out in 2021.
The Vermont Economic Development Authority’s Broadband Lending Program may provide a financing avenue for CUDs. Act 79 caps the program at $10.8 million with a maximum loan size of $4 million or up to 90 percent of project costs. VEDA, a non-profit organization, provides loan recommendations, overwriting, and servicing to borrowers.
Many uncertainties still surround Vermont’s connectivity challenge. Nevertheless, expanding fiber networks to unserved and underserved neighborhoods for remote education, work, and telehealth remains a top priority for the State.
COVID-19 Case Update:
Vaccination Acceptance Rates:
In response to a reporter’s question, Governor Scott said that neither he nor his team will receive vaccinations before their time. He emphasized that these doses are meant for older populations in order to save lives.
Expanded Vaccination Schedule:
Legislative Session 2020 started out like most sequels, with a feeling of déjà vu. It was Groundhog Day with a touch of “I Am Legend” thrown in for atmosphere. Nearly two months to the day after adjourning, legislators returned to Zoom and YouTube, logging dozens of hours a day of deliberations in order to take on the full-year budget and allocate the remaining Coronavirus Relief Funds of around $200 million.
Vermont received $1.25 billion in Coronavirus Relief Funds, a king’s ransom in any normal year. Any projects funded through this source must be spent by December 30 or be returned to the federal government. Of the $826 million appropriated in late June (Part 1, the Original), no one so far is clamoring to return unspent funds.
House Speaker Mitzi Johnson kicked off the session by referencing a legislative report on State House space and telling members they would not likely be meeting as usual in the State House this January. Instead, the General Assembly will likely spread out across three additional spaces in the Capitol Complex. Draft legislation enabling the use of alternate spaces mentions the basement and various stock rooms that will allow lawmakers to physical distance and “perform [their] constitutional legislative duties.”
If legislators didn’t miss the overcrowded, claustrophobic committee rooms before, they may truly be nostalgic for the busy and exchange-filled hallways of the State House in January.
Families and schools across Vermont are planning for re-openings too. Just a little over two weeks ago, Governor Phil Scott announced an entirely new program to support families of school-aged children in an environment of remote learning. Twelve million dollars in CRF funds will support opening and start-up costs for these childcare “hubs.” Dozens of sites across the state will serve an estimated 7,300 students (and possibly thousands more) in kindergarten through Grade 6 starting on or about September 8. “Real time” is putting it kindly. This is government at warp speed.
Like snowflakes, there are no two school reopening plans in the state that are the same. Each supervisory union and district has constructed a unique reopening plan. All involve some component of remote learning ranging from entirely remote to hybrid in-person approaches. Each school must be prepared to go “fully remote” if an outbreak occurs.
Three-hundred schools have applied for a CRF program to improve indoor air quality. The uptake for the program exceeded $6.5 million originally appropriated through Efficiency Vermont. Another $5 million is likely to be funneled towards the program. Schools’ COVID-related re-opening costs have also exceeded the June CRF allocations and the House Education Committee recommended another $30 million.
Vermont legislators have always taken pride in presenting a balanced budget even though it is not constitutionally required. The current FY 2021 budget process is relatively uncontentious and requires no deficit spending. A dismal forecast for FY 2022, and a shocking forecast of pension losses, foreshadow a very tough January for the General Assembly. And, sadly, they may be making those decisions by the dank light of a basement stockroom.
Treasurer announces “Very, very big increase” in unfunded liabilities
Vermont struggling businesses to receive additional grants
Committees focus on broadband expansion
Act 250 Falls Apart
Hubs program develops in record time
Vermont State Treasurer Beth Pearce appeared before the House Appropriations Committee this week and announced that the state would see a “very, very big increase” in the unfunded liabilities of the state employee and teacher retirement systems.
Before the announcement, Vermont already faced enormous unfunded liabilities in its public employee retirement plans—a total of $4.5 billion for pension payments and health care liabilities. Surprisingly, no committee members asked Pearce to estimate how much higher that liability is likely to go in 2020.
Although Pearce did not provide an estimate of the amount of increase in total pension fund liabilities, a document she shared with the committee showed an increase in unfunded health care payments of nearly $500 million for 2020. That is a staggering increase of 22% in only one year. Unfunded health benefits account for about half of the state’s $4.5 billion outstanding liability.
Pearce cited a variety of reasons for the higher liability, including Covid-related expenses, increased retirements and adverse investment experience.
Vermont’s pension boards estimate the rate of return on pension investments at 7.5%, which is among the highest in the country. The state’s actual investment returns have been far lower, which has significantly increased the amount of unfunded liability.
Pearce told the House Appropriations Committee that the estimated rate of return will have to be lowered, and she will advocate for it to go to the lowest end of a range provided by independent actuaries. She opposed efforts by the Vermont Business Roundtable during the past legislative session to lower the estimated rate of return.
Reducing the estimated rate of return will increase the minimum required state payments next year, which could significantly impact the budget in what is already expected to be a very challenging year.
The House Committee on Commerce and Economic Development passed a $100 million economic recovery bill on Thursday that includes $88 million in assistance to businesses. The Scott administration had requested $133 million in funds for this effort. That proposal would have allocated $50 million for the hospitality industry, $23 million for other types of businesses, $50 million for a consumer stimulus “gift card” program, and $10 million for tourism marketing.
The committee was given $100 million to spend by the House leadership. They reduced the marketing proposal to $4 million given the anomaly of spending money to attract visitors when the state is not fully open to out-of-state travel. The money was allocated to the Department of Travel and Tourism in the event that travel restrictions relax soon.
The $50 million “gift card” proposal was met with great skepticism, just as a $500,000 “gift card” pilot program kicks off on September 8. Ted Brady, Deputy Secretary Agency of Commerce and Community Development, fielded questions for a vacationing Commissioner of Tourism, Heather Pelham. The committee remained unconvinced of the value of the program, and their sentiments were encapsulated in comments shared by Rep. Kimbell, “I didn’t like this idea in June, I didn’t like it in August, and I don’t like it in September. This dog won’t hunt.”
The committee finalized the remaining distributions as follows: $5 million for ski areas (for COVID-19 compliance preparations), $3 million for workforce training to go to VTC and CCV, and combined business grants totaling $88 million. The Agency of Commerce and Community Development will continue to make eligibility decisions. The committee placed a $300,000 cap on all business grants and gave the Commissioner of ACCD the authority to request more funds on a case-by-case basis to the Joint Fiscal Committee. All funds must be spent before year-end. The committee also removed a requirement that a business show lost revenue of 50% and replaced it with a condition that the business have a “demonstrated need.”
While many of the grant parameters are vague, the amendment still has to go before the House Appropriations, Senate Economic Development, and Senate Appropriations committees so more changes are likely. The fact that Commissioner Goldstein, Deputy Secretary Brady, and ACCD Secretary Lindsay Kurrle have been given this much latitude is a testament to legislators’ confidence in their work. That is a laudable feat of nonpartisanship.
House and Senate committees spent many hours this week discussing the need for broadband expansion—no doubt reflecting constituent frustration with inadequate service in rural areas and greatly expanded Internet needs for work and school. But with limited funding, no leadership and no legislative proposals, little is expected to happen during the legislature’s brief September session.
Legislators increasingly have pinned their collective hopes on “communication union districts,” entities that are formed by two or more towns to issue bonds and build broadband infrastructure. In reality, the CUD’s have little funding and are run almost exclusively by volunteers. They have made little tangible progress to date.
Lawmakers appear loathe to work with existing telecommunications providers, which have the infrastructure, expertise, staff and access to capital markets to efficiently expand broadband capacity.
Gov. Scott has proposed $2 million in the FY 2021 budget for CUD operating expenses. The legislature may increase that somewhat, but the sums are negligible in the face of the hundreds of millions of dollars that are needed to fully build out broadband at the high speeds that lawmakers are demanding.
“This is not a ‘no’ vote, this is a ‘not yet’ vote.” With those words Sen. Chris Bray, D-New Haven adjourned Friday morning’s meeting of the Senate Natural Resources Committee, effectively ending any chance of sweeping changes to Vermont’s landmark land use law this legislative biennium. Bray had just introduced a strike-all amendment to the Act 250 bill, H.926.
Gone from the strike-all are exemptions from Act 250 jurisdiction for areas of enhanced designation: downtowns, neighborhood development areas and villages that have robust planning and permitting in place. Despite support for the exemptions – designed to prevent sprawl and encourage development in community centers – from many of the state’s environmental groups, several senators and vocal citizen groups rejected the premise that local regulations would offer sufficient protections to water quality.
What remains in the strike-all amendment is a provision for recreational trails that are under construction while the Agency of Natural Resources works on recommendations that will ultimately bring trails under Act 250 review. The strike-all also retains language to deter forest fragmentation by adding definitions for “connecting habitats” and “forest blocks.” The reintroduction of a 2,000-foot “road rule” that triggers review did not survive the scaled down bill.
H.926 will go to the Senate floor next week. It is likely that efforts to modernize Act 250 will begin anew in the 2021-2022 session.
The House Human Services and Senate Health and Welfare Committees heard from Vermont Afterschool and the Department of Children and Families on the rapidly changing landscape of the newly created school-aged childcare hubs programs.
Twenty hubs have been approved, and many of those will be ready to operate on September 8, the first day of school. Those 20 hubs will be operating in 65 different locations and are estimated to be able to serve about 5,000 children. Another 60 hubs are in the development pipeline.
The hub program, which was first announced a scant two weeks ago, is funded with $12 million in CRF funds. Vermont Afterschool is the lead community partner and is working with organizations and communities interested in establishing a hub to provide a safe and engaged learning environment for remote learning for kindergarten through Grade 6. The partners have been actively adapting the program as they better understand what the needs are across the state. Fees will vary in each program, but there is a cap of $200 per week. Some programs may be free for some families.
Legislators asked the department to solve an equity discrepancy. Some existing afterschool programs are expanding their hours significantly to serve students whose schools may close for the day as early as 11:30 am. Yet they are not eligible to access the funding. Committee members requested that the department consider ways to extend access to those programs.
The Perfect and the Good, at War
As the hardships that many Vermonters are enduring from the economic shutdown become clear, so too are some of the policy failures that are exacerbating the suffering. One of them is the state’s decades-long inability to provide broadband access to remote areas of Vermont, and that failure is having a disproportionate impact on Vermont’s children and low-income families.
The challenge is not, as they say, rocket science. Reaching the remote corners of the state – the last mile, in telecom parlance – would require significant state and federal funding, as well as partnerships with existing providers and reasonable goals as to what qualifies for adequate service. Although the state has spent millions on broadband, it has not come close to meeting its goals.
The state set up the now-defunct Vermont Telecommunications Authority in 2007 with a goal of solving the problem by 2010. The VTA inexplicably spent millions of dollars on so-called “middle mile” fiber to schools and other institutions, rather than homes, to compete with existing providers. It failed to expand access for rural residents.
At the same time, a dogma took hold in the legislature that only investments in fiber optic cable (rather than copper lines, which serve the furthest reaches of the state) are worthwhile. Existing telecom providers cannot afford to invest in high-priced fiber in remote areas with few customers, so the legislature has pinned its hopes on small, thinly-capitalized and often volunteer-run organizations to build out fiber-to-the-home. Those organizations, not surprisingly, have made barely a dent in reaching unserved Vermonters.
Acting on the view that only lightning-fast speeds are worthy of state money, the legislature has significantly ratcheted up the minimum required broadband speeds for companies to receive state funding. Under legislation passed last year, the minimum required speed is now 25/3 Mbps – a speed higher than most consumers are willing to pay for. To receive funds under a new loan program operated by the Vermont Economic Development Authority, the legislature required speeds of 100 Mpbs symmetrical – in essence, the speed of fiber. The legislature also has adopted a policy goal that all Vermonters have access to 100 Mbps by 2024. That would cost an estimated $1 billion. For comparison purposes, this article is being written with an Internet speed of 10/1 Mpbs over, gasp, wireline service, with three adults working on-line simultaneously.
There are about 20,000 residences in Vermont that still have inadequate broadband service, meaning 4/1 speeds or less. (Many with only dial-up service). Most of those households would likely be thrilled to have broadband speeds that are a fraction of the state’s fiber goal. For now though, the children in those homes are facing months without any meaningful access to education, while their parents have little or no ability to work remotely.
Prior to the COVID-19 pandemic, the legislature’s cult-like focus on fiber-to-the-home was merely puzzling. Vermonters are now experiencing real hardship as a result of a policy that sets a gold standard for all, rather than an affordable and workable standard for those who need state help. The pursuit of perfect Internet access has been the enemy of the good, with failure a close ally of perfection.
Warren Buffet famously said, “You only find out who is swimming naked when the tide goes out.“ The legislature has been swimming naked, with the public largely unable to see the hardships that were growing due to the failure to expand broadband coverage. The COVID-19 pandemic has brought the tide out and laid bare those hardships for all to see.
House has rocky start to historic remote voting session
The House took historic action on Thursday, approving a rule change to allow legislators to vote remotely. The legislators are now using an app, Everbridge, to cast their votes from their living rooms, bedrooms, kitchen tables, and porches.
Here is the link to the pdf that this was an excerpt from.
The construction sector may operate limited in-person operations in accordance with the April 17th guidance, including restricting work crews to two people per location/job and following mandatory health safety recommendations. Only construction needed to support the COVID-19 response, maintain critical infrastructure, or for the safety, sanitation and operations of residences or businesses is allowed to operate beyond this scope. As an example, replacing a failing roof, failed electrical system, or broken waterline would be acceptable. Additionally, jobsites should be left in a safe and secure manner before ceasing in-person construction. Providing services to a hospital or healthcare facility would be acceptable.
Construction crews returning to work under the Work Safe provisions of Addendum 10 and the April 17th guidance must remember that the intent of the new guidance is to reduce the density of workers at construction sites and reduce gatherings at construction sites. Construction companies must not return to “normal” operations. The April 17th guidance allows construction to occur with no more than 2 people per location/job. A location/job may be a single property, a single house, a floor of a large multi-story property, or a distinct separate physical location on a larger construction property. In instances where more than 2 people are working on a large project (for instance, 2 people on floor one and 2 people on floor 3), those individuals must not come into contact. Start times must be staggered to avoid gatherings, breaks should be staggered, and job meetings exceeding 2 people must not occur.
The Agency interprets unoccupied to mean uninhabited properties. Indoor construction should not occur in occupied properties, whether the homeowner is present or not.
DRM | Downs Rachlin Martin PLLC
Order extension brings expected and dreaded consequences
Gov. Phil Scott’s announcement today that his Stay Home Stay Safe Order will remain in place until at least May 15 brought a collective sigh of exasperation from those who were hoping to return to employment as well as those who are merely inconvenienced by the mandate to work from home.
But there is also the quiet despair that is occurring in the remote corners of Vermont, and no one really knows the depth of the growing hardship.
Educational leaders told the Senate Finance Committee on Thursday about the unknown impact that COVID isolation is having on Vermont’s children as they are untethered from the child care facilities and schools that have increasingly become their primary sources of support beyond education: mental health, nutrition and physical activity.
Jay Nichols, Executive Director of the Vermont Principals’ Association, said many principals have not been able to reach fully half of their students. Jeff Fannon, Executive Director of the Vermont NEA, told the committee about a teacher in Springfield who has been unable to reach her most at-risk student for four weeks and wonders if she should contact law enforcement.
The poignant anecdotes personalized the abstract but massive and growing financial challenge the COVID-19 pandemic is creating. According to the legislature’s Joint Fiscal Office, the state’s education fund is already $40 million short for FY 2020, even after the state has used up $49 million in reserves. That problem is certain to get worse as many of the fund’s revenue sources dry up.
Right now, the state’s response to the COVID-19 crisis is an administrative challenge and not a legislative one. The two branches have embraced their respective roles. Gov. Scott – like so many governors nationally – has exuded confidence daily as the administration responds forcefully, backed by evolving scientific and medical judgment, with increasingly tighter restrictions.
Not surprisingly, given the enormity of the crisis, the response has been bumpy at times. Many companies, for example, have struggled to understand whether they are “Essential Businesses” and able to continue operating. Conflicting statements from administration staff have contributed to the confusion. At least one industry – golf courses – has mounted a public relations campaign to reverse the order.
But the administration’s strictures are making a difference. The growth rate of COVID-19 cases has fallen every day except one since March 21. Vermont is now at the low end of projections for bed needs, ICU beds and ventilators, with forecasts showing the state will remain mostly within its capacity.
In the meantime, the General Assembly is moving incrementally to prepare for the longer-term legislative challenges. For the first time in history, the Senate met and voted remotely on Friday to pass a series of non-controversial, COVID-related bills.
A paradox of this new virtual legislative environment is that the legislature is both more transparent and less accessible. It is easier than ever for the public to watch live legislative proceedings, but far more difficult – for the public and lobbyists alike – to influence them. As committees move to more controversial topics, the difficulties of legislating remotely are likely to become more apparent.
Working remotely, Senate passes four bills
In an historic session, the Senate convened remotely Friday morning to unanimously pass four COVID-19 related bills.
Administration decisions driven by science and data
Governor Scott is deliberate when he refers to “science and data” when he addresses the public. So it was with intention that Mike Pieciak, Commissioner of the Department of Financial Regulation, spent the week reviewing COVID-19 Modeling Data for the public. All evidence suggests that social distancing sacrifices are making a difference in saving lives and reducing hospital resource need.
Treasurer asks for expanded interfund borrowing
Over the past week, the tax and spending committees in the House and Senate have digested the latest revenue numbers from the legislature’s economists, and the picture isn’t pretty. While the General Fund downgrade is less than it had been two weeks earlier, the Education Fund is significantly more in trouble than originally thought.
VBRA “ Urgent” Save Your Business
As we head into week 2 of the shutdown it is becoming more apparent that we may be shut down until May 6th. Our lobbyist is keeping us up to the minute informed as things keep changing so fast. We will insure that all vital information is passed on to you, our Members and the construction community, as soon as we can. Together as a community group we can survive this.
Patti Komeline, our Lobbyist, sent out and email last night that there is talk that the Disaster Loan Programs may be running out of funding by Tuesday or Wednesday.
IT IS THEREFORE URGENT THAT YOU APPLY FOR YOUR LOAN APPLICATION TODAY AND RECEIVE $10,000 IMMEDIATELY
Please go to this NAHB link for a simple detailed explanation of the programs available to you:
You also may go this Vt ACCD’s user friendly link:
For more legal advice from DRM:
Stay Safe Everyone. We are One Day closer to the Other side!
National Home Builders State Representative
Legislature Ready to Move On, But What’s Next?
Legislators run for office, by and large, to solve problems. Now, faced with a massive health and financial crisis unlike anything the state has experienced in a century, and having been evicted from the Statehouse, lawmakers are struggling to define their role.
The initial response was swift, as the legislature quickly passed several emergency bills that have been signed into law, with a few others soon to follow. But if this week is any indication, as lawmakers move beyond the initial emergency bills, the next phase is going to present some major challenges.
First, there is the logistical problem of moving the entire bill-making process online. In normal times, any given bill has thousands of touch-points as it moves through the legislative process. Lawmakers have hundreds of interactions in rapid-fire sequence on dozens of issues during the course of each day.
Most of those interactions are gone now, replaced by digital communications that are, ironically, vastly less efficient. It’s like running a fire hose through a straw – it takes a lot longer, and in the end not much makes it through.
Then there is the plodding, yet disjointed structure of committee meetings conducted over Zoom and YouTube. Clogged Internet bandwidth and forgotten mute buttons grind down the pace of discussions. This week, one committee was victimized by the newfound outlet for sociopathy that isZoom bombingwhen pornography suddenly appeared onscreen during a discussion about agriculture.
And there is the fundamental question of what is the legislature’s role in responding to a pandemic. Most committee hearings this week were spent hearing reports from the administration on what they are doing to respond. The governor and his staff have received widespread praise for their response as the virus disrupts nearly every aspect of life in Vermont. But as they were called away from the front lines of disaster response to provide reports to committees, some staff members gently pushed back.
Lawmakers were also brushed back by administration staff as they took on the role of constituent service. Many businesses have looked to their legislators for help as they sought exemptions to continue operating under Gov. Phil Scott’s sweepingStay Home/Stay Safe Order. With legislators advocating for a loosening of the rules for some businesses, Agency of Commerce and Community Development staff – who have been pulled from their traditional duty to advocate for business development – gently chastised lawmakers and asked for help in keeping Vermonters safe.
Finally, there is the question of remote voting. Vermont’s tradition-bound Senate has not even allowed electronic devices to be present in the Senate chamber, so it has, unsurprisingly, moved cautiously to allow voting to occur outside the Statehouse. Both bodies are expected to approve some version of remote voting next week.
The legislature, like everyone else, is making up new rules as they go.
Don’t bank on it; federal grant funds may run dry
Chris D’Elia, President of Vermont Bankers’ Association, told the Senate Committee on Economic Development, Housing and General Affairs on Friday that the new federalPayroll Protection Programmay reach its capacity next week, less than a week after opening the application process.
Legislature continues to grapple with unemployment insurance inequities
Unemployment benefits for Vermonters, recently expanded underH.742in response to COVID-19, are now significantly higher with a supplemental federal benefit of $600 per week for each claimant.
During Governor Scott’s press conference today, Vermont’s Commissioner of Health, Dr. Mark Levine, gave the latest COVID-19 patient data: As of March 31 there were 28 new positive cases, for a total of 321. There is a total of 15 deaths. Dr. Levine also reported on the growing evidence that the COVID-19 virus can be present for 48 hours before symptoms can appear. Anyone concerned about contact risk should work back over a 48 hour period to determine exposure. Levine also reported that 12% of tested cases were coming back positive.
Governor Scott asked for Vermonters with medical experience - nurses, pharmacists, EMSs, physician assistants, veterinarians, mental health workers, etc. - to register at Vermont.gov/volunteer. This is so the state can be ready if and when critical needs arise. People with experience in the fields of childcare, grocery worker, public works professional, drivers, etc., can register to volunteer as well.
Dr. Levine, Commissioner of Health - I have five bullet points:
Gov. Scott -
Lindsay Kurrle, Secretary of the Agency of Commerce and Community Development -
Michael Harrington, Acting Commissioner of Labor
Rep. Peter Welch -
Andrew Brewer | Government Relations Specialist
Downs Rachlin Martin PLLC | Business Sense · Legal Ingenuity
52 State Street | Montpelier, VT 05602-3176
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The Virtual Statehouse
In a blink of an eye, everything changed.
With the Vermont State House closed for the week, and likely for months longer, Vermonters began to adapt, as they have for centuries in the face of previous disasters.
Numerous Senate committees, a joint leadership committee and the entire House held daily conference calls, all open for the public to listen. They were filled with the usual hiccups, annoyances and amusements that accompany conference calls – background noise, “can you hear me now?” and snide comments not intended to be heard. But mostly they were focused and serious efforts to address the state’s – and nation’s – worst health and economic crisis in generations.
It was all things COVID-19 in every call. Hospitals statewide are bracing for a tsunami of patients with a shortage of beds, emergency equipment and staff. In northern Vermont, a small hospital is already losing one million dollars a week due to the cancellation of elective surgeries. In southern Vermont, two EMS volunteers are self-isolating due to possible exposure but cannot return to their homes.
Vermont’s court system is under enormous stress, and there is a call from the ACLU to release prisoners to prevent cruise-ship conditions in corrections facilities when the wave hits.
Vermonters are being laid off in historic numbers. The Department of Labor usually processes 400 unemployment claims each week; there were 4000 processed through the departments new online form on Wednesday alone. Fully one-half of the state’s 21,000 food service employees will soon lose their jobs.
The state’s general fund is facing a $200 million loss in the next three months – a big number for a very small state.
With all schools and child care centers closed, the state is in the midst of a child care crisis. Who takes care of the children of essential workers? And which workers are essential? And of course, what about the children of parents who have to work away from home?
And there was this, only somewhat more pedestrian problem: grocery stores may be out of toilet paper until June due to hoarding.
Lawmakers struggled with these and many other issues this week. We have included summaries in this Legislative Update of the major issues discussed.
Discussing issues is one thing; voting is entirely another, and that is the next puzzle lawmakers will have to solve.
The Senate returns on Tuesday consider a House-passed emergency unemployment compensation bill, H.681. The Senate Rules Committee held a call today to help senators figure out how to reconcile voting and social distancing when they return.
According to Secretary of the Senate John Bloomer, social distancing guidelines could be met by allowing senators to spread out to various offices and hallways with speakers, with a prolonged roll call that allows them to enter the chamber sequentially. That will probably work for the 30-member Senate, but how do the 150 members of the House gather to vote? That remains to be answered.
Legislative committees apparently have greater constitutional latitude to vote remotely. Committees may be allowed to cast votes by telephone, with roll calls required when votes are not unanimous.
Five House committees will begin meeting next week, perhaps through videoconferencing.
These committees will first focus solely on COVID-19 response legislation, but before long they are likely to return to the panoply of other bills that were pending when they left Montpelier. That will create significant challenges for anyone on the outside who has an interest in what passes.
So far, legislators have responded impressively in providing public access to their discussions. But as the issues become more complex and lawmakers begin to vote, the temptation will grow to deliberate outside the public’s view. One Senate committee has already discussed suspending the state’s Open Meeting Laws during the emergency period.
DRM will be following the virtual deliberations closely and providing regular updates. Please contact anyone on the DRM team with any suggestions as to how we can improve our services in this new environment.
State facing major revenue losses, but has reserves in place
The Senate Committee on Finance heard testimony on major potential fiscal implications to the state, and property tax concerns for municipalities, due to the COVID-19 virus.
Open Meetings Law amendments would allow for meetings in the virtual world
The Senate Committee on Government Operations deliberated this week on temporary amendments to Vermont’s Open Meeting Laws to allow for deliberations that are consistent with health and safety protocols required by COVID-19. The amendments would expire once the crisis subsides.
Unemployment insurance filing is trending
The Senate Economic Development, Housing and General Affairs Committee began considering changes to a House-passed emergency unemployment compensation law, H.681, which expands benefits for employees affected by the COVID-19 outbreak.
Families First Act signed by President
In response to COVID-19, H.R. 6201 quickly moved through Congress and was signed by President Trump this week. This legislation guarantees free COVID-19 testing, establishes paid leave, enhances unemployment insurance, expands food security initiatives and increases federal Medicaid funding.
Lawmakers respond to school and childcare facility closings
Gov. Phil Scott ordered dismissal of preK thru 12 schools starting Wednesday. The order specified that during the initial two-week period of school closure, the districts would focus on developing new systems of food pickup and delivery, create continuity of education plans, and provide continuity for students who struggle and special education.
Senate Health reviews COVID-19 response proposal
The Senate House and Welfare Committee met remotely this week to review H.742, a bill passed by the House late last week, and consider what needs to be added to support the health care system in responding to COVID-19.
Green Mountain Care Board eases regulations to regulated entities
In response to the COVID-19 crisis, the Green Mountain Care Board took action on Wednesday that gives hospitals flexibility from regulatory requirements to focus on operations and crisis response.
Governor allows take-out beer and wine
On Thursday, Gov. Phil Scott loosened Vermont’s restrictive, Prohibition-era alcohol laws by issuing a Gubernatorial Directive permitting “to-go” sales and delivery of beverage alcohol with the purchase of a meal, as well as the delivery of alcohol products by licensed retail stores.
Full House and five House Committees to meet next week, others to follow
The Vermont House will meet next week as a whole and in various committees, beginning with a remote “Caucus of the Whole” at 1:00 p.m. on Monday. Members.
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