Vermont Legislative Update 04-24-2020
An analysis from DRM's Government & Public Affairs Team
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.
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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. The technical issues that vexed lawmakers as they became accustomed to using Zoom for committee meetings was magnified by the nearly 150 members participating on Thursday, and compounded by the new technology.
For those viewing the proceedings, only a portion of legislators were visible onscreen, and the relentless online meeting refrain to “mute oneself” was spoken repeatedly by House Speaker Mitzi Johnson, most notably after an anonymous legislator let some colorful language fly during the voting process. Those unable to make the app work, or who had issues with their remote connections, called the House Clerk to register their vote, or voted by video roll call. Despite the clunky process, the body passed five COVID-19 related bills.
Although the ability of the House to meet remotely now is critical for the state’s response to the crisis, the viability of the House to continue meeting remotely to handle more contentious and complex legislation is questionable. It is unclear if the House intends to continue meeting remotely to consider issues unrelated to the COVID-19 crisis.
Governor Scott announces good news on COVID-19 trends
Vermont has taken some of the strongest measures in the country to comply with Governor Scott’s Stay Home, Stay Safe Executive Order. This has worked to the state’s benefit as the statistics are trending below the best-case forecast. According to administration officials, it is important to note that this is a plateau and not a decrease, so it is still a time for caution. As the spigot is turned open a little at a time, COVID-19 numbers are monitored closely to ensure severe cases do not exceed the ability of Vermont’s healthcare system to meet needs.
Phase 2 in the administration’s plan for restarting business allows for a maximum of five employees in any location as long as they can remain six feet apart. Businesses that engage with customers outside, such as garden centers, can open but cannot exceed 10 people on the premises. Steps must be taken to ensure all staff is complying with proper CDC safety protocol.
Vermont is not an island and nearby states are still experiencing hundreds of deaths a week. Should there be a marked increase in positive COVID-19 cases, Governor Scott is prepared to step back and reinstitute a more stringent order.
Senate committee approves expanded workers’ compensation coverage
The Senate Economic Development, Housing and General Affairs Committee approved a bill this week that creates a presumption that “front line workers” are eligible for workers’ compensation benefits if they contract COVID-19 during the course of employment.
The bill defines front line workers to include fire fighters, law enforcement officers, ambulance and other medical personnel, health care facility workers, corrections officers, workers in long-term care and child care facilities, pharmacy and grocery store employees, and home health care workers. The Commissioner of Labor is authorized to expand the presumption to include other categories of workers who are determined to be at “a similarly elevated risk of being exposed to or contracting COVID-19 as the other occupations listed.”
The bill also creates a presumption of eligibility for an employee who is not a front-line worker if the employee contracts COVID-19 and either had documented exposure in the workplace to an individual with COVID-19, or performed services at a residence or facility with residents or employees who had or were diagnosed with COVID-19 within a reasonable period of time after the services were performed.
Insurers are concerned about the scope of the employment sectors that will be entitled to a presumption of coverage, as well as the broad authority of the Labor Department to expand it. The potential claims cost, and resulting impact on employer workers’ compensation rates, could be significant.
Pandemic Unemployment Assistance rollout underway
Michael Harrington, Acting Commissioner of the Department of Labor, told a panel of lawmakers today that the Pandemic Unemployment Assistance program for self-employed individuals and independent contractors went live 36 hours ago. The department has received 6,000 applications, and payments should begin next week. Harrington said the new PUA platform is more robust than the department’s aging system, and emails will inform beneficiaries each week when they should file.
Questions arose about the interplay between tax filing requirements and PUA applications due to murky instructions on the department’s website. The website tells filers to provide their tax returns, and a bill passed by the legislature this week requires the Tax Department to verify applicant information. In fact, however, only earnings need verification, not the entire tax return.
The committee peppered Harrington with questions about the ambiguity of the process. Harrington explained that technically, a person can only begin a PUA claim after being denied general unemployment – a fact that flummoxed committee members and unleashed questions about how an applicant would be expected to know that. Rep. Ancel, D-Calais said that self-employed and independent contractors would likely never have filed with unemployment before and would be confused by the initial question of wages that begins an unemployment insurance claim since they are, by definition, not wage earners.
The committee exhorted Harrington to clarify both the documentation necessary for PUA and the general instructions for individuals applying to PUA.
Vermont rates well in preparedness for the economic impact of COVID-19
The House Appropriations Committee heard testimony this week from Dan White, the Director of Government Consulting and Public Sector Research at Moody's Analytics. White detailed some of the results from Moody’s recent COVID-19 Stress-Test, which tests the amount of fiscal stress that states may be asked to absorb due to the pandemic. Vermont is one of twelve states that are better prepared to face this unprecedented economic crisis.
White explained that Vermont is better off than most other states because its total reserves are 13.2 percent of the general fund. While that may be sufficient to get through a recession, White explained getting through this pandemic unscathed may require closer to 20 percent of the general fund to be held in reserves. Vermont is “in the middle of the pack” in terms of revenue loss, said White, and if all of the state’s reserves were used, only a five percent change in the budget would need to be made. White said that other states are looking at changes in their budgets as high as forty percent. White did not recommend using all of the reserves, indicating the state should expect an even bigger impact than five percent.
Education groups plea for a seat at the table in weighing schools’ futures
Revenue challenges facing the education fund for the remainder of FY 2020 and in FY 2021 are well known by now. A recent “improved” forecast by state economists show that unrecoverable shortfalls in trust taxes will be closer to $69 million than $89 million for FY 2020 as previously estimated. That leaves the Education Fund in a slightly better negative position of roughly $19 million instead of $39 million.
Conversations in the legislature about state education finance in the wake of the coronavirus have largely focused on lost revenues and have not yet turned to cutting costs in schools. But the writing appears to be on the wall.
The Vermont Superintendents, Principals, and School Boards Associations and the Vermont NEA asserted to the Senate Finance Committee the need to establish regular channels of communication with a large decision-making group which should consist of their groups, the administration, legislative leadership and other key stakeholders. They said that the academic and social emotional needs of students returning after this year’s school dismissals would be unprecedented and that cutting human resources - 80 percent of school budgets - would be catastrophic for kids.
Longstanding structural problems in Vermont - too many school buildings, some in disrepair, and too many personnel across the state for a dwindling student population – cannot now be solved by small factions. Difficult decisions about revenues and expenses, they said, will need to be made through a collective, collaborative approach in order to emerge from this crisis with a resilient education system.
A case in point is a bill under consideration in the Senate Government Operations Committee that would allow town Selectboards to decide to extend their property tax due dates. Mark Perrault of the Joint Fiscal Office told the Finance Committee that such a change would accomplish nothing except to shift the burden of short term borrowing from towns on to schools. When asked if they had been consulted about this proposal, the education groups answered that they had not. Advocates said this issue is a good example among many of decisions that need to be made with education stakeholders and others at the table.
Senate delays vote on essential workers incentive pay
The Senate Appropriations Committee reviewed the latest proposal on Friday to address the issue of essential workers who continue to work, risking exposure to the COVID-19 virus, but who are in a worse financial position than individuals who hold similar jobs and choose not to work and receive unemployment benefits. Senate President Tim Ashe said the next step is a discussion with the Scott administration and House leadership on Monday to determine their support. He has briefed them a number of times and the Senate needs a signal that they are part of this cause.
The voluntary program would be employer based and would require employees to meet certain criteria. Employers would have to verify employee information. The Joint Fiscal Office provided a preliminary cost estimate of $89 million for the program. The committee agreed that eligible employees would include frontline workers earning $25 an hour or less as a base wage. Grant payments to eligible employees would be $1,000 a month for up to three months. The list of eligible workers include health care providers, child care facilities, ambulance services, grocery stores, pharmacies, mortuaries, and certain retail entities. To address issues with licensed professionals, the committee agreed to exclude from the wage cap covered employers who receive reimbursement for services through the Agency of Human Services through a rate setting process, a grant, or as established by rule.
The proposal also includes language that the state will only expend funds to support the program in the absence of a specific federal program that supports eligible employees and employers. Any federal program that offers the same benefits will allow the state to shut down its grant program and use the community reinvestment funds elsewhere. Ashe said states are starting to see restrictive guidance from the Trump administration about the use of these funds, which has created a lot of uncertainty.
Economic recovery task force begins to weigh in
Governor Phil Scott has recruited two dozen private sector individuals to develop strategies to speed long-term business and community recovery from the impacts of the COVID-19 pandemic.
The Vermont Economic Mitigation & Recovery Task Force has been established under the Agency of Commerce and Community Development. The task force is made up of three action teams. The Employer Financial and Technical Support team will focus on increasing financial and technical support capacity for small and large businesses; the Local Support and Community Action team will identify gaps in recovery efforts; and the RestartVT Team will help develop plans for the smooth, safe and orderly reopening of the economy.
Governor Scott said that this was not an advisory committee: “These individuals are willing to roll up their sleeves and lend their vast expertise and skill to increase the capacity of our state response as we take on the significant challenge of restarting our economy in the weeks and months ahead,” said Scott.
The task force began its work this week with a Town Hall teleconference featuring the Financial and Technical Support team. The team conducted an exhaustive review of the Small Business Administration COVID-19 emergency response loans, the Payroll Protection Program and the Economic Injury Disaster Loan program, and intends to make recommendations to the administration on how to better guide Vermont businesses through the process.
The RestartVT team communicated with businesses as the governor began to relax the Stay at Home executive orders, first allowing up to two workers at a location or jobsite, and now up to five. In particular, the team sent guidance and templates of worksite safety protocols to businesses in Vermont’s construction sector, suggesting that as the “spigot” opens further, safety certifications may be required to operate.
In the coming weeks, the task force will continue to issue specific recommendations.
Panel advances public postings of meetings
The Senate Government Operations Committee advanced a bill on Friday that authorizes municipal public bodies to temporarily post electronically meetings notices and agendas in two designated electronic locations in lieu of the two designated public places in the municipality, or a combination of a designated electronic and a designated public place. It also requires the municipal public body to post the notice or agenda in or near the municipal clerk’s office and to provide a copy of the notice or agenda to the local newspapers.
The Vermont Press Association worked with the legislature on the temporary adjustment and is satisfied with the bill.
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