Vermont Legislative Update 01-15-2021 - An analysis from DRM's Government & Public Affairs Team

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Vermont Legislative Update Quick Links

Vermont's legislature adjusts to a new normal

Revenue uncertainty dominates budget discussions

Budget Adjustment Act

Act 250 Executive Order will garner legislative attention

Town meeting week dates subject to change

Education funding will stream in to the state through CRSSA

Senate extends Covid-19 workers’ compensation presumption

Highlights from Governor Scott's January 15, 2021 Press Conference

Vermont's legislature adjusts to a new normal

The legislature convened remotely last week and seamlessly began its virtual session. While things are running smoothly technologically, lawmakers are operating under the pall of last week’s riot in the nation’s capital.

Rumors of State House rallies on January 17, and even darker activities planned for Inauguration Day on January 20, prompted a security briefing for legislators led by Department of Public Safety Commissioner Mike Schirling on Thursday afternoon. Working with the state police, DPS has been tracking threats through a multi-agency intelligence center leading up to the 2020 elections and has increased these efforts since last Wednesday. While there have been some general concerns in Vermont, Schirling said there have been no credible threats targeting individuals.

DPS has been briefing legislators over the last six months relative to the rise in right-wing extremist groups such as the Proud Boys, Oath-Keepers, and Q-Anon. These groups are central to many of the threats tracked in Vermont as well as the rest of the nation. Intelligence specialists are concerned that foreign governments will work to co-opt these groups for their own purposes.

Since Wednesday, their messaging has changed. Not only is the focus on government assets, but now they are also concentrating on law enforcement, media, and technology companies. They view Apple, Google, and Amazon as being complicit in taking down the Parler App.

Response plans are in place, and Vermont's National Guard is on standby. Expect to see additional police presence around the state in the coming week.

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Revenue uncertainty dominates budget discussions

The budget process in the Vermont State House usually follows a fairly steadied order, refined over the years but mostly defined by regularity and continuity. This year, however, presents a challenge to business as usual.

Steve Klein, Chief Fiscal Analyst for the legislature’s Joint Fiscal Office, presented a preliminary budget forecast to the House Appropriations Committee this week and laid out the full spectrum of revenue uncertainty.

The total amount of federal funds that Vermont received from CARES Act, CRF, pandemic unemployment, PPP and other monies is estimated at $5 billion. All three major funds – General, Education and Transportation are “up” from the severely-downgraded forecast in August. But they are still down $180 million from the January 2020 forecast. Nevertheless, personal income tax receipts are up, sales taxes are way up, purchases of vehicles are way up. It was even suggested that the January 2021 forecast may wind up higher than the January 2020 forecast, and that was a banner year. In spite of a global pandemic and parts of the state economy that are extremely contracted, the influx of federal money is allowing for a semblance of normalcy for state revenues.

Next Tuesday, a new consensus revenue forecast will be adopted. The shape and guidelines of new federal economic recovery funds (CRRSA) are still not fully known, and there will likely be additional stimulus money flowing from Washington. On top of that, economic recovery money from late 2020/early 2021 (from the original CRF) will continue to have a positive effect.

Other items are likely to put upward pressure on the budget. Those include state colleges ($40 million), pension funding ($60 million), and a state employee pay increase ($18 million). Other areas include health care, broadband, and the physical infrastructure of schools - roughly $220 million in total.

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Budget Adjustment Act

The administration presented their proposal for a Budget Adjustment Act to the Appropriations Committees today. The Budget Adjustment Act is an annual exercise to adjust the current fiscal years’ budget. The Governor submits proposed changes, and differences are resolved. This year’s balancing act includes not just the usual state fund reversions, but also a slew of federal fund sources that add complexity to tracking and reconciling. Nevertheless, Adam Greshin Commissioner of Finance described this BAA as revenue neutral for the General Fund.

Some items of note: Body cameras for all major police forces that do not already have them including: liquor control, fish and wildlife, department of motor vehicles. State colleges will receive an additional $5 million. $3.5 million in new ESSER II funds will be expended towards helping Burlington High School have a physical space in which they can attend school. A $10 million economic recovery grant program will provide relief funding for businesses that fell through the cracks of the various federal and state aid programs, such as businesses that were not incorporated in 2019 and therefore were ineligible for grants in 2020.

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Act 250 Executive Order will garner legislative attention

The legislature attempted but failed last session in its ambitious effort to modernize Act 250, the state's 50-year-old land use law. On Thursday, Gov. Scott signed Executive Order 02-21 to modernize the Natural Resources Board and its district commissions. These changes are based on recommendations from many studies and past bills.

In a corresponding press release, the Governor's office stated, "The Governor's Executive Order unifies policy authority across the nine Environmental Commission Districts, and will maximize natural resource protections, enable well-planned growth, increase predictability and uniformity, and reduce redundancy and inconsistency with other state regulatory programs. "

Effective July 1, 2021, the order would maintain the current five-member Natural Resources Board and include a chair and two full-time members. Two district commissioners would join and review regional project applications. The Board would handle all significant projects, and regional commissions would review minor project applications where public hearings aren't requested.

In issuing the Executive Order, Governor Scott has placed the ball in the legislature’s court. They now have something to react to and will either defend the current process or draft something they prefer. What a modernized Act 250 looks like by July 1 remains to be seen.

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Town meeting week dates subject to change

Just one week after convening, the legislature passed a bill authorizing alternative procedures for the 2021 annual town meetings. The bill, H.48, was passed in response to Covid-19 and is on its way to the Governor.

Among the changes made in the bill:

  • Towns will no longer be required to hold meetings on the first Tuesday of March.
  • Secretary of State will have some flexibility to work with municipalities during the election.
  • A municipal legislative body may require the municipal clerk to mail ballots to all active registered voters to reduce exposure to Covid-19.

The committees of jurisdiction heard from many towns and decided that they needed the flexibility to make their own March town meeting decisions. Representative Casey Toof, R-St. Albans Town, proposed an amendment to require that mail-in ballots be sent to all voters, but withdrew his proposal before a vote could be taken. The Secretary of State will use $2 million in CARES Act funds to pay for mailing out ballots.

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Education funding will stream in to the state through CRSSA

The Agency of Education briefed several legislative committees this week on new federal funding for education. The Coronavirus Response and Relief Supplemental Appropriations Act has several new funding streams for education totalling $133 million.

ESSER II (not to be confused with ESSER I) will bring $126,973,363 of new federal money to Vermont LEAs. It has the same allocation formula and broad possible uses as ESSER I but four times the amount of money, and can be spent until 2023. ESSER I funds ($28 million) from the CARES Act are only now flowing in any real quantity out to schools and that is because the legislature and administration instructed schools to use the far more restrictive CRF dollars first. A new pot, EANS (Emergency Assistance for Non-Public Schools) will provide $4 million for independent schools if the state opts in for the program.

CRSSA also extends the Coronavirus Relief Fund, and includes a new Education Stabilization Fund and new money for child nutrition.

But it would not be January in Vermont without talk of education fund pressures. The Ed Fund had a shortfall last year of $58 million and the tax commissioner’s December letter ominously forecasted a 9.5 cent increase on the homestead property tax rate. Public schools are very concerned about equalized pupil counts as they’ve watched dozens of students and families make different attendance decisions. Some school buildings are suffering from deferred maintenance and there is already talk in the Statehouse about addressing radon, setting air quality standards for schools and addressing PCBs.

The new federal money is construed for flexible use and that is encouraging considering the massive potential increase in property taxes. But the question remains to be seen how the funds can actually be used and how well they can be used to plan for the future.

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Senate extends Covid-19 workers’ compensation presumption

The Senate took quick action this week to extend Covid-19 related workers’ compensation changes that were passed last year. Last session’s Covid-19 response bill, Act 91, established a rebuttable presumption in certain cases that workers diagnosed with Covid-19 are entitled to workers’ compensation benefits. The change expired today, so the committee passed S.9 on Thursday, a bill that extends the provision until 30 days after the termination of the current state of emergency. The bill also makes the extension retroactive to prohibit a policy gap. The Senate Committee on Economic Development, Housing and General Affairs approved the bill on Thursday, and the Senate passed it today and delivered it to the House for consideration.

The committee will continue working next week on S.10, a bill extending the unemployment insurance provisions in Act 91, also set to sunset.

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Highlights from Governor Scott's January 15, 2021 Press Conference

  • State of Emergency extended another month to February 15, 2021.
  • Phase 2 of sports and recreation guidance for schools begins on January 18, 2121.
  • Thirty percent of Vermont schools are meeting in-person, 50% are a hybrid and 20% are fully remote.
  • No cases are being seen related to skiing.

Vaccination Details

  • Phase 2 of the state’s vaccination schedule will begin on January 25, 2021 for those 75 years and older and for those with certain chronic conditions.
  • The state is receiving about 8,800 doses a week with a total of 35,000 doses administered to date.
  • There will be a website and phone number for eligible residents to sign up for an appointment.
    • The call center will be staffed by 200 people.
  • It is necessary to register in order to sign up and the process begins on January 25th.
  • Clinics will begin on January 27.
  • People will get an appointment for their booster when they receive their first dose.
  • Do not call your doctor or pharmacy for an appointment.
  • After people aged 65 and older receive their vaccinations, people with certain chronic conditions including but not limited to; cancer, kidney disease, COPD, heart disease, severe obesity, pregnancy, and diabetes.
  • The website is not active yet.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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