Inequity in the Age of COVID-19

Equity is a value that Vermont legislators hold most dear. It permeates virtually every state policy, from education and health care to tax policy and state spending. As COVID-19 reshapes nearly every aspect of our society, lawmakers are going to find that value, like so many others, put to the test.

Perhaps the greatest inequity wrought by the virus is happening in homes with school-age children. Many students from middle- and upper-class families, while inconvenienced, have the advantages of high speed Internet, motivated parents and an enormous range of on-line learning materials. Some schools have even created their own mini-MOOC’s.

But many low-income students are free-falling into the digital divide, with no access to the Internet or computers and family structures that don’t come close to replacing school environments. Pre-k children face similar disadvantages.

Vermont schools have seen a persistent achievement gap between low-income and upper-income students, and the closure of schools for three months will undoubtedly widen that gap. Lawmakers who want to create equitable opportunities for kids are being asked to take swift action to close the digital divide. But the Internet divide is a perpetual problem in our rural state and cannot be quickly addressed.

Gov. Phil Scott’s “Stay Home Stay Safe” Order this week also closed most Vermont businesses, and that order created its own inequities. The order allowed many businesses to continue operations, even as their competitors were shuttered. Sen. Tim Ashe, D/P-Chittenden, questioned why WalMart could continue to sell a wide range of consumer goods, including groceries, while small stores had to change their practices or close altogether. The urgency of the order made it impossible for the administration to finely draw the rules in a way that created equity for all businesses.

The urgent response to the massive unemployment in Vermont is likely to create the perception of unfairness in the workplace that could have ramifications that long outlive the coronavirus. This week, the legislature passed a bill that dramatically expands eligibility for unemployment insurance. Workers will be able to leave their jobs and obtain unemployment compensation for a wide range of COVID-19 reasons that will be difficult to verify. (See the article below). Among these are “an unreasonable risk of being infected with COVID-19 at work” because the employer fails to follow COVID-19 guidance issued by Vermont Occupational Safety and Health Administration, the Centers for Disease Control or the Vermont Department of Health.

At the same time, the federal recovery bill has increased unemployment benefits by $600 per week. Those benefits, combined with the state maximum benefit of $513 per week, mean that many employees will increase their incomes by quitting work. How will employees react when coworkers respond to this new disincentive to work?

COVID-19 will wreak its own direct and random inequity, of course, as it ravages and kills some and leaves others untouched. These disparities will be compounded by existing social and economic structures. Lawmakers are likely to make these inequities a major focus in the months and years ahead.

Vermont Legislative Update Quick Links

Federal aid approved

Scott orders school dismissal for the rest of the year

State expands unemployment benefits as claims continue to surge

Legislature approves comprehensive emergency health care measures

Business owners scramble to navigate hazy essential business orders

Federal aid approved

The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law today. An excellent summary of the CARES Act can be found here. The $2 trillion stimulus package will offer enormous relief to states and individuals, with Vermont’s share expected to be up to $2 billion dollars. But Vermont policy makers and their fiscal advisors are still beginning to understand how the money can be used.

The bill stipulates that funds be spent on costs that are a direct result of COVID-19 and not on anything that is already in law and is not a replacement for foregone revenue. The implications of that distinction are still unclear.

The revenue coming to Vermont is “the highest state minimum we’ve ever seen,” about four times the normal amount, according to Steve Klein of the Joint Fiscal Office. Klein told lawmakers that within thirty days of passage of the bill, Vermont will get a check for $1.25 billion. What remains to be seen is whether the funds can be used to refill spent state reserves, or other degrees of flexibility. If the stimulus money cannot be used to replace foregone revenue arising from tax abatements, potential tax forgiveness and the inability of individuals and businesses to pay taxes based on their own lost revenue, then lawmakers will have to think hard before creating more policies that disincentivize tax payments.

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Scott orders school dismissal for the rest of the year

Gov. Phil Scott directed schools to remain closed through the end of the school year. Although the announcement was anticipated, Scott acknowledged the seriousness and difficulty of the decision. At a media briefing today, he told Vermonters, “It’s disappointing, frustrating and it’s just plain sad for kids, parents, teachers and all school employees.”

The directive instructs schools to close for in-person instruction and to create continuity of learning plans for remote learning. The plans will facilitate further learning by students at home, instead of the maintenance of learning approach put into place when the Governor first ordered schools dismissed on March 15. Secretary of Education Dan French told the House Education Committee that districts will submit their plans by April 8 for agency feedback and the final deadline of April 13. The directive requires equitable access to remote learning for students with special needs. While this is perhaps the heaviest out of many heavy lifts, French spoke of some creative efforts already underway to address students who may not be able to learn on a computer or whose households lack Internet access.

Districts are now encouraged, but are no longer required, to provide childcare for essential workers. Schools must continue providing nutritious meals to students whose families request them. These efforts have been lauded as successful across the state with the delivery of tens of thousands of meals.

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State expands unemployment benefits as claims continue to surge

Vermont passed a bill this week, H.742, which expands eligibility for unemployment insurance. The bill was passed prior to the federal CARES Act, so the legislature may need to revisit the law in light of expanded federal benefits.

The new federal law will provide an additional $600 to tax filers which may enable some workers to double their incomes when moving from employment to unemployment status. The federal CARES Act will also enable self-employed people to access financial support. The state does not know how many self-employed people will file, but anticipates it could be an additional 30,000 to 60,000 claimants.

The Department of Labor continues to be overwhelmed with new unemployment claims. Between March 15 and March 21, the DOL processed 3,750 claims. The department received over 20,000 claims electronically during this time. Prior to the pandemic crisis, the DOL averaged about 400 claims a week.

If Vermont experiences a 20 percent unemployment rate, as some have anticipated, the state’s Unemployment Insurance Trust Fund will last for 19 weeks. After that, the state would have to borrow money to refill its coffers.

Filers will receive 50 percent of their wages with a cap of $513 per week. Currently, self-employed individuals don’t pay into the fund and therefore are ineligible to file.

DRM has prepared this summary of the new legislation.

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Legislature approves comprehensive emergency health care measures

Lawmakers approved a comprehensive health care bill this week in response to the COVID-19 crisis. The bill, H.742, was sent to the Governor for action. The bill gives administrators and providers flexibility in responding to the COVID-19 pandemic. It allows the Agency of Human Services and the Green Mountain Care Board to waive or modify certain regulatory processes and requirements to prioritize direct patient care, allow flexible staffing, and preserve provider sustainability.

The bill allows recently retired Vermont health care professionals and health care professionals licensed in other states to deliver health care services to Vermonters using telehealth as part of the staff of a licensed facility, or under a temporary license, and allows the Office of Professional Regulation and Board of Medical Practice flexibility to waive certain requirements during the state of emergency. It directs the Department of Financial Regulation to consider adopting emergency rules to expand health insurance coverage for and reduce out-of-pocket costs to individuals and to expand access to and reimbursement for health care services delivered remotely.

The legislation includes a variety of changes to labor laws to accommodate a surge in applications for unemployment insurance due to the crisis.

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Business owners scramble to navigate hazy Essential Business directive

On Tuesday, after weeks of orders increasing restrictions on public gatherings, Governor Scott issued a Stay Home, Stay Safe Executive Order that directs businesses to suspend in-person business operations and transactions. The order then layered on exemptions for business activities that are deemed essential to public health and safety during COVID-19 crisis.

The Governor’s order contained exemptions taking into account “economic and societal impacts” and “whether a business is necessary in order to properly respond to this emergency” that left thousands of business owners scrambling to decipher.

The order was followed on Wednesday with two lists from the Agency of Commerce of Community Development that were intended to help businesses interpret for themselves if their business operations had been deemed essential: a NAICS Code List tailored to Vermont, and a Federal Critical Infrastructure workers list of business activities and workers deemed critical by the Department of Homeland Security. Any business classified on either list can continue operations.

During a teleconference meeting of the All-Senate Caucus, ACCD Secretary Lindsay Kurrle attempted to define the order, pointing to additional guidelines and an FAQ page for assistance in essential determination. It became clear that there would not be any enforcement or even case by case determinations: for now the Governor was relying on Vermonters to do the right thing. Kurrle urged people to complete an online Request for Continuation of Business Operations form if they felt their industry had been misclassified.

By Thursday, Commissioner of Economic Development Joan Goldstein reported that the agency was overwhelmed with 40 calls a minute from businesses seeking clarification on the orders.

The week ended with legislators grilling Goldstein and others on contradictions and issues of fairness within the orders, leaving Goldstein to state that any business struggling with self-classification ought to err on the side of public safety, and though the Governor was trusting Vermonters to get this right, further orders could come if the infection rate curve did not start to bend.

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DRM’s Government and Public Affairs professionals help the state’s critical industries to achieve key objectives involving government, the press and the public. For more information about the content of this Legislative Update, please contact us.

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