Order extension brings expected and dreaded consequences

Gov. Phil Scott’s announcement today that his Stay Home Stay Safe Order will remain in place until at least May 15 brought a collective sigh of exasperation from those who were hoping to return to employment as well as those who are merely inconvenienced by the mandate to work from home.

But there is also the quiet despair that is occurring in the remote corners of Vermont, and no one really knows the depth of the growing hardship.

Educational leaders told the Senate Finance Committee on Thursday about the unknown impact that COVID isolation is having on Vermont’s children as they are untethered from the child care facilities and schools that have increasingly become their primary sources of support beyond education: mental health, nutrition and physical activity.

Jay Nichols, Executive Director of the Vermont Principals’ Association, said many principals have not been able to reach fully half of their students. Jeff Fannon, Executive Director of the Vermont NEA, told the committee about a teacher in Springfield who has been unable to reach her most at-risk student for four weeks and wonders if she should contact law enforcement.

The poignant anecdotes personalized the abstract but massive and growing financial challenge the COVID-19 pandemic is creating. According to the legislature’s Joint Fiscal Office, the state’s education fund is already $40 million short for FY 2020, even after the state has used up $49 million in reserves. That problem is certain to get worse as many of the fund’s revenue sources dry up.

Right now, the state’s response to the COVID-19 crisis is an administrative challenge and not a legislative one. The two branches have embraced their respective roles. Gov. Scott – like so many governors nationally – has exuded confidence daily as the administration responds forcefully, backed by evolving scientific and medical judgment, with increasingly tighter restrictions.

Not surprisingly, given the enormity of the crisis, the response has been bumpy at times. Many companies, for example, have struggled to understand whether they are “Essential Businesses” and able to continue operating. Conflicting statements from administration staff have contributed to the confusion. At least one industry – golf courses – has mounted a public relations campaign to reverse the order.

But the administration’s strictures are making a difference. The growth rate of COVID-19 cases has fallen every day except one since March 21. Vermont is now at the low end of projections for bed needs, ICU beds and ventilators, with forecasts showing the state will remain mostly within its capacity.

In the meantime, the General Assembly is moving incrementally to prepare for the longer-term legislative challenges. For the first time in history, the Senate met and voted remotely on Friday to pass a series of non-controversial, COVID-related bills.

Senators dress in traditional attire for untraditional remote voting session.

The House, with five times the members, is finding it more difficult to make the transition. The House has only met to allow remote voting on whether to vote remotely.

A paradox of this new virtual legislative environment is that the legislature is both more transparent and less accessible. It is easier than ever for the public to watch live legislative proceedings, but far more difficult – for the public and lobbyists alike – to influence them. As committees move to more controversial topics, the difficulties of legislating remotely are likely to become more apparent.

Vermont Legislative Update Quick Links

Working remotely, Senate passes four bills

Administration decisions driven by science and data

Treasurer asks for expanded interfund borrowing<

Senate workgroup considers “hero pay” to equalize wages

DOL explains new unemployment benefits for self-employed and part time workers

Working remotely, Senate passes four bills

In an historic session, the Senate convened remotely Friday morning to unanimously pass four COVID-19 related bills.

One bill, S.182, aims to reduce administrative burdens on Emergency Medical Services during the crisis. This bill removes the requirement that EMS personnel be credentialed by their affiliated agencies, extends ambulance license terms from one to three years, and requires the Department of Financial Regulation to enforce a provision in current law that health insurers must directly reimburse ambulance services providers. The bill also extends licenses for plumbers and electricians and allows sheriffs to access emergency funds for COVID-19 needs.

S.114 addresses several emergency judicial measures. The bill provides judges with discretion over the payment of rent in rent escrow hearings, allows powers of attorney and deeds to be executed remotely, extends statutory time frames for some court proceedings, and suspends statutes of limitations for civil actions that would expire during the state of emergency until 60 days after the emergency declaration is lifted.

S.333 creates a moratorium on ejectment and foreclosure actions for the duration of the emergency.

H.741 gives the Department of Buildings and General Services the authority to obtain criminal records for contractors working in state owned or leased facilities.

The Senators conducted their business across the now-familiar sight of 25 Zoom tiles. They were dressed in their usual suits and professional attire although their bookshelves and potted plants were visible in the background.

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Administration decisions driven by science and data

Governor Scott is deliberate when he refers to “science and data” when he addresses the public. So it was with intention that Mike Pieciak, Commissioner of the Department of Financial Regulation, spent the week reviewing COVID-19 Modeling Data for the public. All evidence suggests that social distancing sacrifices are making a difference in saving lives and reducing hospital resource needs.

This modeling considers worst, best and likely outcomes, is continually updated with new data and assumptions and is used to forecast available hospital beds, ICU beds, ventilators and personal protection equipment.

The slides in the modeling document show that Vermont is trending far closer to the best than the worst case projections, and peak caseload is expected within the next two to four weeks. Vermont has 622 hospital beds and may need 521. The state has 135 ICU beds available and at peak is anticipated to need 211. The state has 93 ventilators available and it is possible that at the highpoint, 114 ventilators may be needed.

These numbers are important as the state prepares for the next month and remains resolute in its adherence to social distancing. The Stay Home Stay Safe Order will remain in place until these trendlines start to decline.

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Treasurer asks for expanded interfund borrowing

Over the past week, the tax and spending committees in the House and Senate have digested the latest revenue numbers from the legislature’s economists, and the picture isn’t pretty. While the General Fund downgrade is less than it had been two weeks earlier, the Education Fund is significantly more in trouble than originally thought. The economists downgraded sales and use tax receipts by about double what they first predicted, and now believe it to be an $89 million hit. There is further risk that the Administration’s tax deferrals could result in the loss of another $53 million.

The deficit will leave the education stabilization reserve fund in a negative position, and decision makers are grappling with what options there may be to fill the hole in the Ed Fund for FY 2020.

Treasurer Beth Pearce gave a presentation to the House Ways and Means Committee today outlining options to address the state’s cash flow issues. She asked the legislature to extend “interfund borrowing” capacity from May 15th to August 15th, enabling her to borrow from the state’s liquid reserves in the General Fund or Rainy Day Fund to temporarily pay the Ed Fund obligations. Vermont is in the top quartile of states for having reserves on hand. The state now has a historical high of $374 million cash on hand.

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Senate workgroup considers “hero pay” to equalize wages

The Vermont legislature continues to examine ways to provide extra compensation to workers who are deemed essential and are performing jobs that carry greater risk of exposure to COVID-19. Initially dubbed “hero pay” in recognition of workers who place themselves in harm’s way, the idea behind this hazard pay has another element to it – an attempt to equalize pay to that of workers receiving generous unemployment benefits during the crisis.

Citing concerns about the disparity between low wages and the newly expanded unemployment benefits, Senate Pro Tem. Tim Ashe has asked a workgroup to investigate the subject and report back to the full Senate. There are currently no federal provisions that would secure hazard pay or any additional compensation for essential workers during COVID-19.

Without an incentive it could be hard to sustain the workforce needed to perform essential functions. “Put simply, an essential employee should not be compensated less for working than for not working,” said Ashe.

Though unemployment eligibility has been greatly expanded during the crisis, employees cannot simply decide to quit because they’ll make more money. They must claim a COVID-19-related illness, a legitimate risk of exposure, or a need to take care of a family member in order to collect unemployment.

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DOL explains new unemployment benefits for self-employed and part time workers

Vermont’s Department of Labor held a virtual town hall this week to share information on the federal Pandemic Unemployment Assistance which will provide unemployment benefits to self-employed, sole proprietors, single member LLCs, independent contractors and part-time workers. People who file taxes under these designations will be eligible for state unemployment insurance benefits plus a federal benefit of $600 per week.

Initial applications will determine eligibility, and most COVID-19 related claims will be accepted. DOL is still working to determine how to calculate lost wages for these categories of workers, but it will need wage information from applicants’ tax returns.

If one has already applied and received a monetary denial letter, they should maintain that information and go to the DOL website and sign up for their newsletter. DOL will let people know when the program is up and running. Claims will be backdated to provide benefits from the date of work separation.

State officials are also recommending that individuals apply for the federal Payroll Protection Program and EIDL convertible loan and decide later if they want to commit to these programs. The Agency of Commerce and Community Development has a user-friendly website for guidance, and DRM’s COVID-19 site can provide more details as well.

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