Vermont Legislative Update 04-03-2020
An analysis from DRM's Government & Public Affairs Team
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Evictions on hold, but rent still due
A bill to impose an emergency and temporary moratorium on all evictions and foreclosures during the COVID-19 crisis has made its way to the Senate Committee on Economic Development. The House Committee on General, Housing and Military Affairs drafted the bill language, but handed it off to the Senate committee before voting on it, recognizing that the Senate is further along in its ability to vote remotely.
The bill allows for eviction proceedings to be initiated with the court, but calls for a moratorium on the execution of all writs of possession during the Governor's emergency declaration, essentially halting any evictions.
The moratorium would include eviction proceedings that began before the crisis. In response to concerns over troublesome tenants engaging in illegal or violent activity, the Vermont Landlord Association, Vermont Legal Aid and the Vermont Judiciary worked together on language that would allow a Superior Court to intervene if necessary.
Members in both House and Senate committees were concerned with false messages that tenants do not have to pay rent during the COVID-19 crisis. The language explicitly states that the bill does not relieve any obligation of a tenant to pay rent or a borrower under a residential loan agreement to pay a mortgage. The bill does not address commercial leases at this time, but committees may take up the issue in future legislation.
The bill also creates a moratorium on foreclosure proceedings. Chris D’Elia, President of the Vermont Bankers Association, questioned the need for the bill, arguing that an emergency stay on foreclosures was not necessary as they typically take six months or more to execute. He also assured the committee that the entire Vermont banking industry has suspended all foreclosure actions and is focused on helping businesses navigate the various loan and grant programs within the CARES Act.
Education budgets in shifting sands
The Joint Fiscal Office, speaking to the House Ways and Means and Appropriations committees today, revealed an updated revenue forecast indicating far greater losses for the education fund in FY 2020 than previously expected.
Graham Campbell, Senior Fiscal Analyst Joint Fiscal Office, presented Estimated Revenue Issues for the Remainder of FY 2020 of COVID-19. It shows the education fund with a $142 million deficit for FY 2020. Economists attribute $89 million in losses to economic impacts, most notably the slowdown of activity from lower personal and corporate income tax revenues and downgrades in spending and resulting consumption taxes. The other $53 million is tax deferrals and administration decisions.
Because of Vermont’s decentralized property tax collection system, towns have varying due dates and there is still $132 million in uncollected property taxes for this fiscal year. Towns are statutorily obligated to remit the funds to the state on time.
On top of daunting budget shortfalls, committees heard about logistical difficulties resulting from changes in the timing of the homestead declaration filing. Without the homestead filings and with no reliable revenue forecast in sight for FY 2021, there is no way to legislate a yield bill to set education tax rates. It will likely have to wait until after the tax department can furnish the information to municipalities in August or September.
The Vermont-NEA objected to setting the yield during the school year and said it should be set by July 1 to add some measure of certainty in a time of uncertainty. Perhaps the biggest worry is property tax abatements and inability to pay due to loss of income. Rep. Janet Ancel, D- Calais said of all the worries in this crisis, that was the one keeping her up at night.
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 federal Payroll Protection ProgramPayroll Protection Program may reach its capacity next week, less than a week after opening the application process. He reported that the $350 billion allocated for PPP represents only five percent of the nationwide need. The program is first-come, first-served so it is important for businesses to reach out to their banks as soon as possible to file their applications.
The legislature and administration, along withthousands of businesses around the state, have spent the last week scrambling to digest the federal CARES Act, which is meant to help counter the COVID-19 fallout.
The Economic Injury Disaster Loan is another support package for businesses within the CARES Act, processed through an application with the Small Business Administration. An attractive feature of the EIDL for businesses is a $10,000 advance that can be requested at the time of application. The advance can be used immediately for emergency expense needs and does not have to be repaid under any circumstance, even if the loan is denied.
Given that official guidance hasn’t been well crafted prior to the opening of the registration process, businesses have been advised to apply for both programs and then determine which is more suitable for their needs. Experts are referring those who want more details to the Agency of Commerce and Community Development’s user friendly web-portal.
Legislature continues to grapple with unemployment insurance inequities
Unemployment benefits for Vermonters, recently expanded under H.742 in response to COVID-19, are now significantly higher with a supplemental federal benefit of $600 per week for each claimant. This has created a nationwide conundrum as many people working will be paid less than those on unemployment. In Vermont, the breakeven point is about $57,000 per year. These federal funds will be made available for four months. Senators have struggled with this inequity throughout the week but have yet to come up with a solution. In the coming weeks, this will be both a workforce and legislative challenge.
The Department of Labor continues to struggle with a crushing workload but has helpful guidance here. Individuals who are self-employed or independent contractors can follow this link for directions on how to pre-file in anticipation of receiving unemployment benefits.
UVMMC and Bi-State Primary Care Association detail COVID-19 response
The Senate Health and Welfare and House Health Care Committees received updates from University of Vermont Medical Center and Bi-State Primary Care Association this week on how hospitals and federally qualified health centers are responding to the COVID-19 crisis. UVMMC President Dr. Steve Leffler described the changes that the hospital has implemented including visitor policies, the cancellation of all elective surgeries, visits, and screening programs. “We are as ready as we can be for what is to come,” said Leffler.
Leffler said the hospital has two floors dedicated to the crisis and is currently treating 18 positive COVID-19 patients of which six are in intensive care. Three individuals have been able to be removed from ventilators and are recovering. Personal protective equipment and ventilators continue to be the most significant need for the hospital. Leffler said that the All Payer Model’s predictable fixed prospective payments have been very helpful in managing cash flow, and Medicare has told UVMMC that they could borrow from future payments. The hospital is in discussions to determine if OneCare Vermont can do the same.
Bi-State Primary Care Association reported that all of Vermont’s health centers currently have some telehealth capabilities. BSPCA Vice President of Policy and Programs Georgia Maheras said that FQHCs are bringing COVID-19 test sample collection online in Island Pond, the Champlain Islands, and Arlington. Three more sites are available, if necessary, in the Upper Valley, the northwestern part of the state, and the Springfield area. All dental practices are closed, but services are available in emergency situations.
Like UVMMC, Bi-State is concerned about the PPE supply, and are hopeful that more supplies are coming into the state. Financially, Maheras said that “the cash flow is not pretty.” These organizations have lean margins on an annual basis and not a lot of cash on hand. They continue to receive care coordination payments through the All Payer Model, which is helpful, and the Department of Vermont Health Access has opened up some aid for Medicaid providers who need assistance with cash flow. Federally, Medicare is offering a cash advance and there are various aid options available for small businesses.
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