Scott presents $400 million economic relief and recovery package

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Scott presents $400 million economic relief and recovery package

Wed, 05/20/2020 - 3:54pm -- tim

Governor Scott unveiled his $400 million COVID-19 economic recovery plan during his Wednesday press briefing in Montpelier. Screen grab from Orca Media YouTube video.

by Timothy McQuiston, Vermont Business Magazine Phil Scott today announced a $400 million economic relief and recovery package, using funds from the $1.25 billion the state received from the Federal CARES Act. 

The two-phase proposal, which is expected to be the first of multiple packages necessary to fully recover, will start with $310 million for immediate emergency relief to the most impacted sectors and businesses to be followed by $90 million in long-term recovery investments.

Scott said at his media briefing May 20 that the proposal now will go to the Legislature for its approval. He said he hopes they can turn it around in a week so he can start distributing the money as soon as possible. The Legislature was expected to take up this proposal the week of May 25.

Much of the focus of the relief package is aimed at businesses that are struggling the most during the COVID-19 pandemic: Tourism, food & beverage, retail, and the dairy industry. But, Scott added, any business damaged during this crisis can apply for one of the grants or loans.

“The relief and recovery package we are proposing today, takes bold action to bring support to Vermonters in need, as we continue to manage this public health crisis and open the economy back up,” said Governor Scott. “We are looking to address the immediate cash needs of businesses so they can survive, while also laying the foundation for our economy to emerge stronger and thrive over the long term. These local businesses and their employees drive our economy, put food on the tables of Vermonters and help fund critical needs for families, public schools and so much more. We must step up and act quickly to help them survive this emergency and go on to thrive in the future.”

The Phase 1 relief package (SEE DETAIL BELOW) will involve four areas of distinct action to support businesses and Vermonters as they resume their operations. They include:

  • Financial assistance - Emergency Action Grants for food and accommodation services, retail, and agriculture, Vermont Economic Injury Disaster Loan and Grant program, and small business focused Vermont Restart loans and grants. ($250 million)
  • Housing assistance - Rental Housing Stabilization Fund for property owners and a Re-Housing Recovery Fund to address homeless need. ($50 million)
  • Technical assistance - Restart Vermont Recovery Guides created through a network of business and community assistance providers, and Employee Assistance Program to support the mental health and wellbeing of business owners and their families. ($5 million)
  • Marketing support - Promotional marketing campaign to promote Vermont to Vermonters and deliver a toolkit of creative assets to be used by local communities, and regional marketing and consumer stimulus grants to encourage local spending, with implementation strategies to be proposed by local entities. ($5 million)

“These ideas are the result of talking to many local employers over the last two months to identify what they need now, and what they will need on the other side of this,” said Agency of Commerce Secretary Lindsay Kurrle. “What we heard in those conversations was that there are gaps in federal programs and these initiatives announced today work to address those gaps for our most vulnerable sectors. We know this recovery will be long and that steps announced today will not solve every problem we face, but they will help businesses return to operation, work towards new innovative business practices, and engage all Vermonters in supporting their local communities.”

“I look forward to working with the Legislature to pass these initiatives so we can get this money in the hands of Vermonters quickly,” Governor Scott added. “I want to thank our congressional delegation, Senators Leahy and Sanders and Congressman Welch, for their leadership and support to secure CARES Act funding for Vermont. We could not do any of this without their efforts.”

PHASE 1 PROGRAM $310 MILLION

FINANCIAL ASSISTANCE

$250 MILLION

Restart Vermont Emergency Action Grants $150 million

Who is in need: Food and accommodation services, retail and agriculture businesses that were severely impacted by closure or business disruption.

What will be done: Provide cash disbursement to individual businesses in the most vulnerable sectors. Funding will be directed to lodging, restaurant, retail and agriculture businesses that have been closed or lost significant revenue and are struggling to meet fixed costs. Funding will help prevent wide-scale foreclosures, bankruptcies and deterioration of the sectors and the communities in which they operate. These vulnerable sectors were among the first to close and may be the last to reopen. They require help to pay fixed costs that existing federal programs and state programs have not addressed. Grant proceeds may be used for rent, mortgage interest payments, utilities, inventory, and other essential operating expenses. Designed as a payment to operators based on a formula utilizing their last three years of revenue.

How will program be administered: Businesses will file an online form with the Tax Department demonstrating impact and need. The Tax Department will distribute payments to restaurant, lodging and retail operations based on meals, rooms and retail tax history to businesses with a gross annual revenue of $2.5 million or less. Businesses that can demonstrate need will be eligible for a grant based on their gross revenue and estimated fixed costs. The Agency of Agriculture will disburse agriculture and value-added food operation payments based on Agency of Agriculture funding distribution plan.

Vermont Economic Injury Disaster Loan and Grant Program $80 million

Who is in need: Businesses and non-profit organizations that closed or had significant revenue drops due to COVID-19, including, but not limited to, personal services businesses, manufacturers and creative economy businesses.

What will be done: The Vermont Economic Development Authority will utilize funding to provide existing borrowers impacted by COVID-19 with interest and principal relief and create a new loan and grant program designed to help businesses address fixed costs with which existing federal and state programs have been unable to help. VEDA will offer loans of up to $150,000 amortized up to 20 years with deferred interest for 12 months and a 2 percent interest rate in year two. Applicants will be eligible for a grant that may be used to cover three months of fixed costs incurred during closure or partial shutdown due to COVID-19.

How will program be administered: The State will grant VEDA $80 million. VEDA will use its loan application process to vet and approve applicants.

Vermont Restart Loan and Grant Program $20 million

Who is in need: Sole entrepreneurs, microbusinesses and other small businesses with annual gross revenue of less than $1 million and fewer than 5 full-time employees impacted by COVID-19 closures or partial shut-downs.

What will be done: Funding will be used to backstop loans, provide interest rate buy downs to loans made by non-profit lenders, and provide grants to businesses and non-profits impacted by COVID-19. Businesses and non-profits may apply for loans of up to $20,000 at zero percent for five years and grants of $15,000 (or three months of fixed costs, whichever is less) through the non-profit lenders. The grant and loan proceeds may be used for the restart of business operations. Organizations must take a loan to receive a grant.

How will program be administered: The state’s non-profit and municipal lenders will accept a common loan and grant application. They will utilize approximately $15 million in existing available capital to make loans. $5 million of the funding will be granted to the Vermont Community Loan Fund to provide loan loss reserves. $15 million will be granted to non-profit lenders to enable them to make up to $15,000 subgrants to businesses and non-profits approved for a loan.

HOUSING ASSISTANCE

$50 MILLION

Rental Housing Stabilization Fund $42 million

Who is in need: Landlords and Tenants

Due to COVID-19 response, many tenants have seen the loss or reduction of income and are unable or struggling to pay rent. Consequently, landlords across the state are not receiving full rental payments necessary to cover the costs of building ownership and upkeep.

What will be done: Provide direct financial assistance to stabilize the rental housing industry and prevent tenants from experiencing eviction and possible homelessness.

The program will provide up to 3 months of emergency rental assistance and rental arrearage payments to property owners suffering from non-payment of rent to eliminate rental arrearages and ensure tenants maintain their current housing. Payments will be limited to a maximum of 20 rental units per property owner. At proposed funding levels it is anticipated this program can assist approximately 15% of the rental housing stock.

How will program be administered: Payments will be disbursed through housing service provider(s) selected through the RFP process with oversight authority through the Department of Housing and Community Development.

Re-housing Recovery Fund $8 million

Who is in need: Families and individuals experiencing homelessness and owners of existing, substandard housing stock.

Service providers throughout Vermont have done an incredible job interrupting homelessness and providing non-congregate shelter during the COVID-19 outbreak. To continue this necessary step in maintaining public health, additional units will need to be quickly made available. Simultaneously, there exist numerous potential rental units throughout the state that remain in a substandard condition due to a lack of resources to bring units up to minimal rental housing health code.

What will be done: Provide emergency housing rehabilitation grants and forgivable loans to make up to 250 units of housing available to re-house families and individuals experiencing homelessness during the COVID-19 outbreak.

How the program will be administered: Grants and forgivable loans will be disbursed by housing service provider(s) selected through an RFP process with oversight authority through the Department of Housing and Community Development.

TECHNICAL ASSISTANCE

$5 MILLION

Restart Vermont Recovery Guides $4.75 million

Who is in need: Those businesses and organizations that have been most damaged by the closures and are at limited capacity upon reopening. In some cases, it will be businesses which have received government assistance and need to understand the best way to utilize the funds.

What will be done: Deliver appropriate level of professional assistance to businesses to enable them to re-emerge from the crisis in a viable way.

How will it work: ACCD will issue an RFP to service providers who will submit information on their qualifications including but not limited to:

Operational expertise: Their ability to help modernize some of the current operating practices of businesses.

Digital Strategy: How could the retailers establish a more robust and competitive online presence?

Architecture: Physical Space design for optimal flow: How could restaurants adjust their model and space to accommodate more takeout and less seating? Space for meal preparation, assist with food delivery logistics, assist manufacturers who are reconfiguring operations to produce PPE, accommodation of safety measures.

Technology or software consultancy: How could agricultural producers utilize technology to help solve problems? Same for manufacturing and others.

Legal and/or Turnaround Experience/Advice: How to restructure debt for a business. What is the prioritization of their payables? If they need to unwind the business what is the most orderly methodology?

This work is crucial for businesses to survive. Even with government support they will need to shift business models and professional assistance can help them do that. In addition, the Recovery Guides could offer business and financial planning as well as grant and loan writing support.

Wellbeing for Small Businesses Employee Assistance Program $250K

Who is in need: Vermont employers and their employees.

The State of Vermont’s “Invest EAP Centers for Wellbeing ” is an employee assistance program based in the Division of Vocational Rehabilitation, which provides important services to support the health and wellbeing of the Vermont workforce at over 250 businesses that elect to pay for this service. The EAP provides counseling, resources, and referrals to help employees at these companies with issues such as depression, anxiety, PTSD, workplace issues, family and relationship issues, legal problems, substance issues, elder care, and childcare. For $250,000, the Wellbeing for Small Businesses Employee Assistance Program (EAP) can extend services to businesses with 50 or fewer employees over three months.

What will be done: Wellbeing for Small Business, would be made available to support both small business owners and their employees. EAP services are provided by a team of highly skilled, licensed mental health counselors located throughout the state, all of whom currently provide services through videoconferencing.

The program would offer two access points: one for business owners and the other for their employees. This will enable the EAP’s management consultation staff to receive initial calls from business owners who may have resource questions in addition to seeking counseling support. Employees would be directly referred to counseling staff.

MARKETING

$5 MILLION

Who is in need: All Vermont Communities

The tourism and hospitality sector, including lodging, restaurants and cultural attractions, has been one of the hardest hit by COVID-19. With travel restrictions, mandatory closures, bans on large gatherings and uncertainty on when out-of-state visitors will be welcome again, the industry has been brought to a complete halt and will be negatively affected for perhaps the longest of any other sector. Tourism is critical to rebuilding local economies and the fabric of community life Vermont residents enjoy.

Restart. Respect. Rediscover. Promotional Marketing Campaign $1.25 million

What will be done: A promotional marketing campaign, first directed at Vermonters, will encourage in-state travel, recreation and local spending by inviting residents to rediscover Vermont. Consumer spending throughout the state will provide an immediate boost to restaurants, downtowns, and tourism properties, directly support communities and small businesses and generate tax revenue. The campaign would revolve around the themes of respecting each other, renewing our relationship with our community, and rediscovering what our local regions have to offer as the economy reopens.

How will program be administered: The Department of Tourism and Marketing will manage the statewide promotional campaign and provide access to a marketing toolkit of creative assets for communities, organizations and individuals to utilize so we can speak with a unified voice.

Regional Marketing and Consumer Stimulus Grants $3.75 million

What will be done: Stimulus grant funding for regional destination marketing organizations, including chambers of commerce and downtown organizations, to encourage consumer spending in local communities. Funding would be made available for marketing or incentive programs to be determined by each region to best fit that area’s needs. Each program will encourage Vermonters to direct spending to local businesses, such as through buy-local challenges, loyalty affinity or gift card programs, incentives to local businesses (lodging, restaurants, retail, etc.) to create discounted packages or opportunities for Vermonters, or direct outreach and marketing.

How will program be administered: Grant funds to be disbursed by the Department of Tourism and Marketing. Through an RFP process, we would encourage each region to apply for funding through one organization that works in collaboration with others (chambers, downtown organizations, business leaders, etc.).

For additional detail on this relief and recovery package, visit https://accd.vermont.gov/covid-19/vermont-economic-recovery-and-relief-package.

For more information on:

 

Source: Montpelier, Vt. – Governor 5.20.2020