by Timothy McQuiston, Vermont Business Magazine Both Governor Phil Scott and Speaker of the House Mitzi Jonson held press conferences Monday and both discussed the Coronavirus Relief Fund and money spent, and not spent, toward economic recovery.
The governor will again hold press conferences Wednesday and Friday discuss COVID-19 health news and the reopening of the economy. He is also expected to sign legislation recently passed by lawmakers. Bills need to be vetted on both sides before Scott can sign them. He’s not expected to veto any of the recently passed legislation, including the CRF bills, but they could take several days to make it all the way through the process.
The CRF is the $1.25 billion the federal government provided Vermont as part of its massive CARES Act. The $2.2 trillion CARES Act also provided funding for the PPP Payroll Protection Plan, the PUA unemployment insurance extension and the stimulus checks sent directly to households, among other things.
In Vermont, much of the money has gone toward dealing with the health impact of COVID-19, from setting up surge sites and pop-up testing around the states to bearing the extra cost of government in dealing with it.
It also is intended to provide economic support for local businesses.
Governor Scott last month sent a $400 million spending package to the Legislature to support mostly small businesses effected by the mitigation efforts involving the “Stay Home, Stay Safe” orders.
The Legislature went into recess starting last Friday. They will return after the primaries on August 18 to complete work on the Fiscal Year 2021 budget. The budget for the first three months of the fiscal year (which begins Wednesday, July 1) was cobbled together by lawmakers and the administration earlier this month.
Jonson said Monday that they will have a better lay of the land financially when they return. Early estimates put the budget shortfall at upwards of $400 million.
Both governmental bodies at this point appear resigned to running a deficit in the Education Fund in order to meet a $100 million shortfall there. The Legislature has vowed not to raise property taxes to fill the gap.
The Scott administration also has opposed increasing the property tax to that extent.
As for the economic aid packages, Legislature has allocated $100 million in “Phase II” CRF spending for Vermont businesses and nonprofit organizations. This follows $70 million authorized in “Phase I” a few weeks ago.
They also authorized over $60 million in relief funding for housing which follows $23 million in housing grants in Phase I.
For the healthcare sector, lawmakers earmarked $275 million for the healthcare system – from hospitals to clinics to doctors; offices – and another $28 million for hazard pay. This money for healthcare stabilization is in addition to the $58 million that was already allocated for this purpose in early May.
They also approved $22 million for food security and $15 million for childcare support. There is also $36 million for the agriculture and forestry sectors.
There is also a $20 million package for broadband and connectivity needs.
In response to a reporters’ questions about that level of spending and the deadline for spending CRF money, Johnson said they were indeed linked.
Clearly, $20 million is not nearly enough money for fully building out broadband to the last mile in Vermont.
But the CRF requires the money be spent by the end of this calendar year. So, they are spending only what they can reasonably afford to allocate this year.
In total, the legislature is poised to allocate $750 million in economic relief to try and stabilize the economy and the healthcare system in response to the COVID-19 crisis between Phase I and Phase II.
In addition to the $750 million, the legislature will likely approve holding back $240 in CRF funds for later deployment when they return in August. This includes $100 million for stabilization of K-12 schools and $140 million to be determined.
That $140 million to be determined includes somewhat wishful thinking on the federal government allowing the states to spend CRF money on budgets.
The US Senate under Senate President Mitch McConnel has been adamant that the rules for spending that money will not change.
Congress and President Trump might come up with more COVID-19 relief funding, but it will likely be either direct to consumers (stimulus checks again) or direct to business.
Vermont Representative Peter Welch has authored a plan to get $120 billion more directly to restaurants, which have been devastated by the “Stay Home” orders and other mitigation efforts.
They were among the first businesses to close at the beginning of the pandemic and are among the last to open.
While they are slowly reopening in Vermont, in other parts of the country some states that have opened up are either closing them down (along with bars) or placing new restrictions on them as the virus has come roaring back in places in the South and West.
For Governor Scott, he indicated Monday that he will sign the legislative spending plans unless there is a “technical” (meaning legal) glitch in any of them, which is not expected.
He wanted about $100 million more directly to businesses from the CRF right away, instead of holding onto the money in case it could be used for the budget.
His thinking is that the budget will be damaged for years to come if bankruptcies start piling up. He’s acknowledged that there will be business closings in any case, but the government should do all it can to limit the damage.
The more business closings, the less tax revenue on both the corporate and consumers side, and the greater the unemployment, he said, which carries both a financial and personal toll.
While the Monday morning press conferences (Johnson’s via Zoom and Scott’s via video and conference call) just about bumped up together, the two arms of government were largely in unison in getting the money to businesses and understanding the budget dilemmas.
Speaker Johnson was complimentary on how Governor Scott has handled the emergency.
She did say one wish she had was a mandate on facial coverings while people are in public spaces.
Johnson said there is confusion and discrepancies as some municipalities, like Burlington and Montpelier, require them, but most do not. Also, some businesses require them and other do not.
Scott has preferred, as he has with most of his orders, local decision making on mask wearing and a desire not to create, in any of these orders, confrontational edicts.
While there have been complaints about non-compliance, he and his administration have reported relatively little pushback from these voluntary measures.
He said if the pandemic were to spike again in Vermont, then he might have to reverse course, but for now he’s complimented Vermonters on their adherence to the four measures to stay safe, and which have become a kind of mantra for him and Health Commissioner Dr Mark Levine: Wear facial coverings in public, wash hands, practice six-foot social distancing, and stay home if you’re sick.