DRM | Downs Rachlin Martin PLLC

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.

Read more

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.

Read more 

 

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.

Secretary of the Agency of Commerce and Community Development, Lindsay Kurrle, encouraged businesses to apply for both the Economic Injury Disaster Loan program and the Payroll Protection Program offered under the CARES Act.

·        The EIDL is a low interest loan Administered by the SBA. Applicants can also request a $10,000 advance that does not have to be repaid, even if the loan application is denied.

·        The PPP is a loan administered by local lending institutions and backed by the SBA. Employers are eligible to receive 250% of average monthly payroll costs for up to eight weeks. The loan can be forgiven if the employer uses the funds to keep paying wages and salaries of employees. In addition to wages the funds can be used for other operational expenses such as rent and utilities. Additional details and guidance are still forthcoming.

Kurrle also revealed an updated COVID-19 resource center at ACCD.VT.Gov., divided into sections with for business, individuals and communities.

Acting Commissioner of Taxes, Michael Harrington, said that the department had received over 30,000 claims so far – more than in a typical year – and expected new reports tomorrow to push that number over 40,000. He acknowledged the frustration of many people trying to get through on the phone and asked for patience. With regards to the supplemental $600 federal unemployment benefit, Harrington reminded listeners that if you filed taxes in 2018 or 2019 there was nothing further you needed to do other file weekly claims as usual. Funds will be deposited automatically into your bank account or a check will be mailed.

Notes:

 Dr. Levine, Commissioner of Health - I have five bullet points:

• Latest data, as of March 31 - 28 new cases. Up to a total of 321. 
• • [Holding chart]  Ignore the last three days. Grey and magenta are the negative results. Blue equals positive results. 
  • The yellow/green trend is the important part - A distinct upward direction of all tests done that are positive. Now in the 12% range.
• Total as of yesterday is 15 deaths. Two involved elderly in group living situations. The other two were in the hospitals.
• What happens when there's an outbreak in a facility?
• • We separate people who are cases from those who aren’t. Appropriate isolation and contact work.
  • Our response teams have reported to eight total facilities. We’re behind many states in terms of the number of facilities that have had a case.
• I want to let the public and colleagues know that we do want testing in a much more expansive way.
• • We want to be able to provide surveillance of the entire population. 
  • People with symptoms will still be prioritized
• CDC info on exposure risk.
• • One can transmit in the asymptomatic, or pre-symptomatic state. There’s growing evidence that there's about a 48 hour period before symptoms appear during which time you could transit.
  • If you're concerned about contact with someone who’s sick, work back 48 hours to determine your exposure.
  • Keep practicing social distancing.
  • The point is there are people out there who aren't trying to harm you but might be transmitting without knowing it.
  • Don’t go out and buy masks, but stay vigilant.

 Gov. Scott - 

• Thanks to Vermonters for the way they’re dealing with this crisis to slow the spread.
• The simple act of staying home is making a huge difference.
• With all that you are doing, it’s difficult to ask for more, but that's what we need to do:
• • We need volunteers for a medical work reserve corp.  Please go to Vermont.gov/volunteer and register if you have medically related experience so we can begin a list of resources.

• What’s available for economic relief:
• • Expanded UI
  • Help for those who might not otherwise qualify for UI
  • Cash for those who need it most for food and other essentials
  • Help for small businesses.
• Thanks to Welch and Sanders, but especially Leahy as vice chair of Appropriations.
• We’ll continue to flatten the curve while building.

 Lindsay Kurrle, Secretary of the Agency of Commerce and Community Development -

• This is a day to day, hour to hour situation for our business community.
• We continue to answer questions while developing business support tools.
• Our hardest days may lie ahead.
• We’ve rolled out an updated resource center at ACCD.VT.Gov
• Direct one-time payments of $1200 to individuals who earn up to $75,000.
• • Plus $500 for each dependent. 
  • Will be deposited automatically per last tax filing information, or mailed.
• We’re encouraging every business to apply for EIDL. Apply and then request an advance of $10k. Reach out directly to the SBA. Or to your RDC.
• Also take advantage of PPP
• • Up to $10mm
  • SBA will forgive the first 8 weeks of expenses.
• Get in touch with mortgage lenders now if you're experiencing financial hardship due to COVID-19
• Also, a small business task force.
• • Charged with creating economic tools
• We know we’ll need to do more.

 Michael Harrington, Acting Commissioner of Labor

• We recognize there’s a massive number of individuals doing all they can to contact us. 
• As we know, UI is not the easiest to understand, so a general overview. Please be as patient as possible. Continue to be resilient in trying to get through.
• Perspective
• • In the past two weeks we’ve processed more clams than we do in a year
  • At least 30k, possible 40k.
  • Updated info tomorrow.
  • Our old system is pushed to the max. Not meant for this level.
  • We’ve tripled our staff on the phone lines.
  • Added as many electronic forms online as we can.
  • We’ve expanded benefits to people impacted directly or indirectly.
  • From federal perspective:
  • • Lots of questions about the additional $600. There’s nothing further you need to do other file weekly claims as usual. 
    • Once the initial claim is done, you will file each week for the week prior.
    • The Maximum benefit of 26 weeks has been expanded by an additional 13 weeks.
  • We’re standing up a totally separate UI system for the self-employed.
• I want to ensure that just because there’s a delay, it will not impact your eligibility or benefits.

 Rep. Peter Welch -

• We’re doing what we have to to be safe. 
• The consequence of that is that we turned off the economy.
• Today is April 1: rent is due, bills are due.
• The role of Government is to help citizens comply with social distancing and recognize the financial hardship. It's the role of the federal government now to be that backstop. It’s the only entity too capable of handling this,
• • $1200 check for income of $75,000 or less. If you filed taxes last year you’ll get an automatic deposit into your account.
  • Thousands of people have been laid off. $600 of supplemental unemployment on top of VT UI. For up to 4 months.
  • Small business - 
  • • Can apply for a $10k EIDL grant. 
    • PPP allows a business to seek up to 250% of monthly payroll, if they use it to keep employees paid, then they don’t have to pay it back.
• We’ll get through this by working together.

 Andrew Brewer | Government Relations Specialist
Downs Rachlin Martin PLLC | Business Sense · Legal Ingenuity
52 State Street | Montpelier, VT 05602-3176
Cell: 802-279-0838 | Direct: 802-225-5514
abrewer@drm.com | www.drm.com

DRM | Downs Rachlin Martin PLLC

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

Coronavirus (COVID-19) Legal Resources for Business

Keep your business in the know during the COVID-19 outbreak.

With information concerning the Coronavirus (COVID-19) rapidly evolving, DRM is committed to providing you relevant and timely guidance on how to navigate this challenging time. We will update this site regularly as new information emerges. For immediate assistance or questions on a particular topic, please contact a member of our team. On this page, you will find answers to frequently asked questions, as well as helpful links.

BREAKING NEWS

• On Friday, March 20, Vermont Governor Phil Scott held a press conference outlining the current initiatives the State of Vermont has taken so far to help alleviate the impact of COVID-19 (coronavirus). See our COVID-19 VT Legislative Update page for more.
• On March 20, 2020, Treasury Secretary Steven Mnuchin announced in a tweet that the April 15th tax filing deadline has been extended to July 15th. Full details here.
• On March 18, 2020, Congress approved the Families First Coronavirus Response Act (“FFCRA” or the “Act”), an emergency relief bill providing financial support to those impacted by the COVID-19 pandemic. It is anticipated the new law will take effect within 15 days, or on April 2. See the full write up here. 

FREQUENTLY ASKED QUESTIONS

Force Majeure

• If you can’t fulfill your contractual obligations due to COVID-19, will your contract’s force majeure provision excuse your nonperformance?
• If your vendor terminates your contract or fails to perform in a timely manner, will the force majeure provision in the contract excuse their non-performance?

Employment Matters

• What are considerations I should make if my employees are still coming to work?
  
  • Are there recommended strategies with respect to employees if my business is staying open?
  • Can I require a sick employee to stay home?
  • Do privacy laws allow me to notify co-workers of an employee’s diagnosis with COVID-19?
• What are considerations if I want to place employees on leave?
  
  • Whatleaveisavailablewhenanemployeeoranemployee’sfamilymemberhasCOVID-19 (coronavirus)?
    • Does Vermont require that I provide an employee with sick leave?
    • Does the federal Family Medical Leave Act (FMLA) apply here?
  • What if my employee wants to go on leave because their minor child’s school or childcare facility has closed?
  • What if my business was ordered to close?
  • What if my employee refuses to come to work because they are worried that they will get sick?
• What are considerations if my company is required to layoff employees?
• What do I need to think about when an employee returns to work after being sick with COVID-19?

Business Interruption Insurance

• Does my insurance cover losses due to COVID-19 related events?

Vermont Legislative Updates

• How will the Vermont state legislature continue to operate during COVID-19?

Cyber Security / Remote Work

• What cyber security and data security risks should I be concerned about if my employees are working remotely?

Intellectual Property

• Are deadlines for filing patents and trademarks in the U.S. extended?
• Are deadlines for filing patents and trademarks elsewhere extended?

Tax Considerations

• Has the IRS extended tax filing or payment deadlines?
• Has the State of Vermont extended tax filing or payment deadlines?
• Has the State of New Hampshire extended tax filing or payment deadlines?

Food and Beverage

• What new COVID-19 (coronavirus) related rules and regulations apply to my Vermont restaurant?
• What new COVID-19 (coronavirus) related rules and regulations apply to my New Hampshire restaurant?
• Have Vermont liquor licensing restrictions applicable to my business changed?
• Have New Hampshire liquor licensing restrictions applicable to my business changed?

Small Business Assistance

• What emergency funding resources are available for my Vermont or New Hampshire small business?
• What are some good resources for information with respect to the effects of COVID-19 on my Vermont or New Hampshire small business?

STATE AND FEDERAL RESOURCES

Vermont Government & Court Resources

• Guidance for Vermont Businesses
• Changes to VT Court Procedures
• VT Judiciary COVID-19 Regular Updates
• VT Public Utility Commission (PUC) Operations During COVID-19
• VT Secretary of State: Guidance for Notaries Public
• Town Clerk Office Closures
• Vermont Dept. of Health

New Hampshire Government & Court Resources

• NH Public Utility Commission (PUC) Operations During COVID-19
• NH Judiciary COVID-19 Regular Updates
• COVID-19 Updates from the NH Bar
• NH Dept. of Health & Human Services
• Gov. Sununu Emergency Orders

Federal Government Resources

• USPTO Notices Regarding COVID-19
• Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
• Coronavirus Tax Relief

HELPFUL LINKS

• Lake Champlain Regional Chamber of Commerce
• US Chamber of Commerce

DRM | Downs Rachlin Martin PLLC

3.18.20

Senate Economic Development

The committee reviewed H.681, (the Vermont Bill) a bill focusing on unemployment insurance as it pertains to COVID. Here is a summary of the bill. This bill still needs to pass the state senate.

Damien Leonard, Legislative Council, did an overview of UI as Cameron Wood of DOL wasn’t able to call in due to his workload. UI is a very complex system and financed by a payroll tax that is based on employers’ experience with UI. A high ratio of layoffs relative to payroll means the business will have a higher tax rate. This builds a pool of funds that can be drawn on when needed.

Currently there is $500 million in the UI Trust Fund. Projections are that 60-70% of this funds will be drawn down in a recession. Our fund is in very good shape which is unique in the US.

To qualify one needs to have been working for at least 2 quarters in the last 5 quarters and hit a minimum income threshold. If one becomes unemployed or under-employed and is able and available to work and is actively seeking work then they are qualified for UI.

If the employer is intending to bring the workers back the DOL may waive the requirement that the employee look for work.

UI benefits cover about 50% of income with a statutory cap of $513/week.

This week the number of people filing is rapidly growing. These claims could have an adverse impact on tax rates for employers unless the law is changed for COVID related claims.

Testimony moved on to:

Michael Harrington

Interim Commissioner of Labor

There has been a drastic spike in initial claims. There is a bottleneck in initial claims filings. In the last 48 hours the department as increased their call center staff from 10-12 to 25-30.They will monitor to see if they need more people. The department has prepared an on-line form that is up for the public right now. This isn’t a permanent solution. Usually there are about 400 claims a week. Yesterday alone there were 500 claims. 21K employed in food service industry and it is anticipated that half will be filing.

The department prefers people to file the online form but if they need help by phone:

1-877-214-3330 – for initial claims

1-877-214-3332 – for general assistance

1-802-828-4344 – for employers.

Harrington went on to discuss the federal bill, HR6201. Here a summary. If Congress passes the bill it will provide flexibility that the state currently doesn’t to pay benefits and relieve employers of charges.

Anyone who is laid off will be eligible for benefits. As long as they are laid off for less than  10 weeks they don’t need to do a work search. They are working to expedite claims so there is no waiting period – current delay is due to a number of systematic steps that need to occur. They are working to shorten that time

Sirotkin asked if there was more the Senate could add to H.681. Harrington said no but the committee will discuss this further tomorrow. Some states are trying to expand UI benefits to sole proprietors and independent contractors and the self-employed. They aren’t contributed into the fund and we have to consider the fund’s sustainability.

Committee is looking to tweak the bill and will meet tomorrow morning at 10am.

DRM | Downs Rachlin Martin PLLC

Statehouse Shuttered Over COVID-19

The Vermont legislative week began like most others, albeit with a heightened appreciation of the need for regular handwashing in a cloistered environment that is a germ factory in the best of circumstances. By Thursday, the Statehouse was like London before the Luftwaffe bombing in 1940; everyone knew that disaster was coming, but no one wanted to leave. As knowledge of the spread of COVID-19 grew and institutions such as Middlebury College and most other Vermont colleges announced that students needed to leave campus, it seemed increasingly imprudent for lawmakers to keep the Statehouse open.
 
The inevitable announcement came on Friday morning as legislative leaders decided to recess for one week. The expectation of a one-week hiatus seems hopelessly optimistic given the virus’ inexorable spread, and at least one committee chair spoke matter-of-factly about the legislature’s return on March 24. The break may well lapse into weeks or months.
 
Lawmakers scrambled on Friday to make contingency plans. Several committee chairs said their committees would meet via telephone, with members of the public able to listen. Others looked for ways to moderate conference calls so as to allow committee chairs to call on witnesses.
 
With no precedent to guide decisions, no one quite knows what the next few weeks or months will bring. Will committees meet without the public? How will the state budget get finalized? Will committees meet by phone and reconvene to vote? When will they reconvene?
 
Of course, the greatest unknown is the future infection and death rate, which by many recent estimates could be enormous.
 
As the state faces its greatest public health threat in generations and an economy in free-fall, the legislative bills that are left behind are likely going to seem inconsequential compared to the challenges that loom ahead.

Health Department creates COVID-19 portal The Vermont Department of Health has created a portal for information related to COVID-19 and will have updates on the status of the virus from the State, CDC and the White House. Read more

Senate committee modifies renewable energy bill

The Senate Natural Resources Committee took final testimony from two witnesses this morning on S.267, a renewable energy standards bill, before tentatively deciding to amend it to eliminate a provision that would have raised rates by four to ten percent every year for ten years.

Read more

Economic incentive proposals move to Senate Finance The Senate Committee on Commerce and Economic Development on Friday passed S.256, a bill that includes a variety of economic development provisions. Read more

Get all the news about Vermont Health Care legislation

We've included a few of the most important health care articles here, but DRM’s weekly comprehensive Health Care Legislative Update covers all the developments including bills, committee activities, panel discussions, taxes, budgets and more.  Read this week's Health Care Legislative Update here. Additional topics covered this week include:

• Lawmakers consider COVID-19 measures
• Senate advances insanity defense legislation
• Senates passes insulin bill

DRM | Downs Rachlin Martin PLLC

Competing Visions of Vermont’s Economy
 
Arecent article from The Economistthat was widely circulated last week in the Statehouse suggested that Vermont’s economy is among the worst performing in the nation. The magazine stated bleakly, “As wages grow across America, one state is left behind… Vermont has seen the weakest wage growth of any state in the past decade….” The article gave a somewhat confusing description of the cause of the stagnation, but the impression of a state of malaise was undeniable.

A few days later, however, Vermont economist Art Woolfpublished an articlestating that incomes in Vermont “have been climbing steadily since the end of the recession in 2009 and we’ve seen record-high income every year for the last six years.” Woolf continued, “I predict we will have another record-breaking year for Vermont family income [in 2019], with median income at nearly $90,000.”

If that wasn’t enough to confuse a casual observer of Vermont’s economy, Vermont Business Magazine then published an article with this headline:  “Study:  Vermont’s economy ranked as above average.” The study by Seniorliving.org concluded that Vermont has the number 19 healthiest economy in the U.S.

Perhaps the conflicting reports about the health of the state’s economy explain the legislature’s ambivalent view about whether to do anything to improve it.

The administration has proposed aneconomic development initiativethat has received a jaundiced reception by the House Ways and Means Committee. After hearing from a handful of academics and economists – but no businesses or trade groups – some members of that committee have concluded that Vermont shouldn’t try to compete with other states with economic incentives. The committee is considering another bill,H.640, that would force companies that apply for grants under the state’s Vermont Economic Growth Incentive program to disclose confidential information.

At the same time, the legislature is considering a bill,S.267, that would significantly increase the cost of electric power in Vermont. The state’s relatively high power costs already put many Vermont businesses at a disadvantage. Electric utilities testified on Friday that they could meet the requirement of S.267 that they provide all of their power through renewable sources by 2030 with little impact on rates. But the bill also requires that ten percent of that power come from small-scale, high-priced projects, and that would raise rates by $15-25 million per year for Green Mountain Power alone.

The governor’s recent vetoes of paid family leave and higher minimum wage bills underscore the divergent views of the administration and the legislature on the state of the economy. While Gov. Scott saw both bills as threats, many Democrats viewed them as economic development measures that would draw more workers to Vermont.

Vermont has two problems that almost everyone agrees create huge challenges for businesses:  a shortage of affordable housing, and a shortage of workers. Yet there are few serious proposals under consideration in the Statehouse to address either.

Vermont’s business community – if not voters in general – are likely to take note if the legislature fails to approve the administration’s economic development bills, does not address the issues of worker and housing shortage, and significantly raises the cost of electricity by doubling the required purchase of small-scale renewable power. 

Divided House committee approves Act 250 compromise

After more than a year of work, the House Natural Resources Committee voted 6-3 to approve sweeping changes to Vermont’s landmark land-use law, including a provision redesigning the Natural Resources Board and limiting the authority of volunteer district commissions.

Read more

Bill would ratchet up utility renewable energy standards

The Senate Natural Resources Committee may have been overwhelmed by the complex testimony it received on Friday from several of Vermont’s electric utility companies.

Read more 

Global Warming Solutions Act moves forward

The Global Warming Solutions Act, H.688 was voted out of the House Committee on Energy and Technology on Tuesday after the committee largely rejected last-minute proposed changes from Agency of Natural Resources Secretary Julie Moore.

Read more

Economic disclosure for VEGI: a burden on business or needed transparency for taxpayers?

The House Committee on Ways and Means heard testimony onH.640, in anticipation of the bill making its way to the committee. The bill would require Vermont Employment Growth Incentive applicants to disclose the number of jobs added, capital expenditure that was promised, average wage, and progress made each year towards the goals.

Read more

DRM | Downs Rachlin Martin PLLC

State of Low Drama

The two-year saga over the enactment of paid family leave legislation,H.107, abruptly ended on Wednesday as the House failed by a single vote to override Gov. Phil Scott’s veto. 

The debate over the bill held plenty of intrigue for Statehouse insiders. One of the deciding votes against the override was cast by asupporterof paid leave legislation, Rep. Randall Szott, D-Barnard, who voted no because the bill did not go far enough in providing benefits to workers. 

Rep. Linda Joy Sullivan, D-Dorset, faced an agonizing choice, as she had just announced on Monday her challenge to Auditor of Accounts Doug Hoffer. Her vote not to override will no doubt be a major campaign issue in the upcoming Democratic primary. 

Another legislator, an Independent, spent a long time before the vote in House Speaker Mitzi Johnson’s office, only to emerge and vote no as well (albeit for very different reasons). An anticipated motion to reconsider on Thursday fizzled after no votes could be changed, despite intense arm-twisting by the bill’s supporters.

But the finale was hardly as dramatic as the vote count suggests. Only those with deep investment in the issue seemed to be paying much attention. Rather than demonstrate some kind of dramatic partisan divide, the outcome showed almost the opposite – that Vermont retains the ability to calmly debate even the most hotly contested issues, and move on without fanfare once they are resolved. 

More raging bipartisanship may lie ahead.  Scott has until Monday to sign or vetoa bill to increase the state’s minimum wage. That bill initially proposed an increase to $15 per hour, but ended at $12.55, which disarmed much of the bill’s opposition from the business community. Although Scott refused to tip his hand at his weekly press conference on Thursday, a veto is not expected by most Statehouse observers. 

Republican Scott showed just how unified Vermont is ashe gave his opinionat his press conference on the subject of the President’s impeachment:  “I believe [President Trump] abused his position of power … and … that he shouldn’t be in office.” A topic that threatens to tear many states asunder has Vermont’s body politic speaking in virtual unanimity. 

With the paid leave and minimum wage bills soon to be dispensed with, there are few highly partisan bills looming on the horizon. Lawmakers have settled in to the largely mundane task of dealing with the state’s problems, large and small. Most voters are likely just fine with their legislators leaving the drama to Washington

Under pressure, committee adopts hybrid to Act 250 appeals process

The House Committee on Natural Resources, Fish, and Wildlife appears to have reached agreement on a controversial section of a bill to modernize Act 250, paving the way for legislation to be voted out of committee. 
 
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Commerce staff promote Governor’s economic development bill 

Senior staff members from the Agency of Commerce and Community Development made a compelling case this week before several legislative committees forH.641, a bill that modifies and expands the state’s incentive programs for businesses. 

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Committee approves non-compete restrictions

The House Commerce and Economic Development Committee voted on Thursday to approve a bill,H.1, that imposes limits on the use of non-compete agreements. 

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Incentives Matter

Gov. Phil Scott’s economic development officials made the rounds to numerous Statehouse committees this week in an early effort to sell the administration’s weighty set of more than20 different economic development initiatives. While most committees listened politely – and some even indicated support for the proposals – one committee may be laying the groundwork to challenge the fundamental premise of state support for economic development incentives.
 
The governor’s proposals include a wide range of funding that most legislators will embrace, including housing renovation, downtown historic preservation, arts and festival funding, tourism and clean grid modernization. The governor has also proposed an expansion of the Vermont Economic Growth Incentive Program, a program that some Democrats, including Auditor of Accounts Doug Hoffer, have long challenged. They have argued that businesses will invest in Vermont regardless of incentives.
 
To buttress that argument, House Ways and Means Chair Janet Ancel, D-Calais, held testimony this week from two George Mason University Mercatus Center Research Fellows who argued that economic development subsidies are bad public policy and should be phased out entirely. That committee has long been skeptical of the so-called “but for” test that underlies VEGI grants. In response to the testimony, Ancel said, “It has always seemed to me that spending money on training is money well spent. Spending money on job retention, location, those kinds of things -– you might as well just burn it.”
 
In reality, Vermont spends very little on economic incentives, and state development experts are convinced that the state’s few programs are essential to attracting and retaining businesses. The professors acknowledged that Vermont spends only .04 percent of its gross state product on incentives, a fraction of what many other states spend and among the lowest in the country. They also said that Vermont ranks well in transparency and holds companies accountable for grant commitments.
 
The reaction to the professors’ testimony was more muted in the Senate Finance Committee, where members cited the importance of Tax Increment Financing Districts to downtown development. Most committee members represent communities that have experienced dramatic growth from TIF districts.
 
Finance Committee members acknowledged the obvious reality that individual states can ill afford to unilaterally abandon any effort to provide economic development incentives to spur business growth. The answer to unilateral disarmament, said the professors, is interstate compacts between states, to which Committee Chair Ann Cummings, D-Washington, responded, “I don’t see New York agreeing to this any time soon.”
 
Scott has put the weight of his Administration behind efforts to counter Vermont’s stagnant job growth. Democratic lawmakers will likely be arguing among themselves for the next several months about how to respond.

Governor vetoes Paid Family Leave bill

As expected, Gov. Phil Scott has vetoed a paid family leave bill that was passed by the legislature. In aveto statementthat he issued on Friday afternoon, he reiterated that he would not support a mandatory paid family leave program that includes a payroll tax.

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Agreement finally reached on employee misclassification bill

The 2019 legislative session ended without a compromise between the Senate and House conference committee members on S.108, a bill to increase penalties on employers for misclassifying employees.

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Act 250 district commissions safe for now

The House Committee on Natural Resources, Fish, and Wildlife continued its deliberations this week on reforms to Act 250, Vermont’s landmark land use law.

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Workforce Development Report presented

At his weekly press conference on Thursday, Gov. Phil Scott put a spotlight on a report prepared by the state’s Regional Development Corporations.

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A Party of One

While the two major political parties battle for the soul of the nation in Washington, D.C., Vermont has all but abandoned the two-party system. Gov. Phil Scott now provides the lone statewide voice for Republican moderation in what is otherwise a supermajority in support of the major social, environmental and economic issues on the left.

That overwhelming lack of disagreement was on full display in the Statehouse this week, starting with a budget address from the governor that proposed increased funding for education, downtowns, climate change and health care. The address elicited virtually no Democratic dissent. That followed his state-of-the-state address two weeks ago that included only one new policy initiative: universal after school programs.

The budget proposed only modest spending growth and no tax increases, but that is hardly a framework to which Democrats could object.

Two longstanding Democratic priorities moved closer to enactment this week. An agreement between the House and Senate on paid family leave legislation, H.107, passed the House on Thursday by a vote of 89-58. That margin is not quite enough to overcome an expected veto by Gov. Scott, but a handful of Progressives voted no because they don’t believe the bill goes far enough. They may join with Democrats in supporting an override vote, which promises to be very close.

An agreement to increase the minimum wage to $12.55 in 2022 passed the House today by a similar margin of 93-54. Although Gov. Scott had promised to veto earlier iterations of the bill, this increase is much smaller than previous versions. There was speculation in the State House that he might sign this more modest bill.

The challenge facing the state GOP was underscored by the recent creation of an “Agri-publican” group that is an offshoot of sorts of the state party. One of that group’s candidates was denounced this week by former Democratic gubernatorial candidate Christine Hallquist for making transphobic and demeaning comments.

As if the party needed to be further divided, it has been unable to reconcile its competing Trump and anti-Trump factions. While the statewide party apparatus remains loyal to Pres. Trump, few of its elected members, including Gov. Scott, have any allegiance to Trump or his policies. 

Ironically, the absence of any political apparatus backing Gov. Scott has given him the freedom to look beyond the party to a broader base of support. Unlike most national Republicans, Scott can appeal to the middle, and not a conservative base, for political support. That has proven to be a winning political formula. According to one poll, Scott is the third most popular governor in the country, behind only Massachusetts Gov. Charlie Baker and Maryland Gov. Larry Hogan – two other moderate Republicans who govern blue states.

All of this is good news for Scott’s reelection prospects, but terrible for the GOP as a whole. The bench of potential statewide Republican candidates is virtually empty, while the Democratic bullpen is packed with ambitious and experienced candidates.

Inside the State House, Democrats continue to have the unilateral ability to determine the outcome of legislation, limited only by the prospect of an occasional veto if they veer too far left.

Global Warming Solutions Act: asking for too much or not enough?

The House Committee on Energy and Technology took testimony this week on the The Global Warming Solutions Act. University of  Vermont Professor Jon Erickson stressed that Vermont needs to transition away from “old economy thinking” and embrace “new economy thinking.”

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Minimum wage conference committee finds agreement

A conference committee on minimum wage legislation, S.23, reached a compromise this week. The Committee of Conference Report passed the House on Friday by a vote of 93-54 and is expected to easily pass the Senate as well.

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Paid family leave on its way to the governor

The Paid Family Leave bill Committee of Conference Report, H.107, was voted on in the House on Thursday and passed on an 89-58 vote.

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Is there a problem with Act 250 district commissions?

The House Committee on Natural Resources, Fish, and Wildlife continued hearing testimony on a proposed package of changes to Act 250 offered in collaboration between the Scott Administration and the Vermont Natural Resources Council, and in competition with a committee bill introduced last session.

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