VTDigger is posting regular updates on the coronavirus in Vermont on this page. You can also subscribe here for regular email updates on the coronavirus. If you have any questions, thoughts or updates on how Vermont is responding to COVID-19, contact us at coronavirus@vtdigger.org
If Vermont ends up with an unemployment rate of 20% as a result of the business closures prompted by the spread of COVID-19, the state will quickly burn through its $500 million unemployment trust fund, interim Labor Commissioner Michael Harrington told lawmakers March 26.
On a Zoom call, Harrington told members of the Senate Economic Development, Housing and General Affairs Committee that under that scenario – which he picked at random as an illustration – the state will probably have enough money in its unemployment trust fund to pay benefits for about 19 weeks. After that, Vermont – like most, if not all, other U.S. states – will have to borrow from the federal government to continue paying benefits.
Lawmakers and state officials are struggling to come up with a means of paying benefits to the thousands of Vermonters who have lost their jobs as businesses have closed over the last two weeks to minimize the spread of COVID-19. The state Labor Department received 14,784 claims last week, three times the all-time record high number of claims. During the week ending March 14, the number of applications was just 659.
Among other things, lawmakers are trying to decide how to handle claims from people who were self-employed and didn’t pay into the unemployment system, and are now out of work. Harrington said it’s generally estimated that there are between 30,000 and 60,000 such people in Vermont at any given time. Many of those people, such as hair stylists, tattoo artists, and musicians, saw their work vanish as executive orders decreed that Vermonters stay home and avoid contact with others.
After the governor ordered the closure of gyms, salons and other such businesses March 21, many self-employed people responded that they would run out of money within weeks.
The self-employed in Vermont haven’t traditionally been eligible for state unemployment benefits.
That leaves them in a difficult position now that work has vanished almost overnight. There is no financial buffer for musicians whose work disappeared when venues were closed and performances were canceled, said Jim Lockridge, who works with hundreds of Vermonters in the music business as the director of the Burlington nonprofit Big Heavy World. He said a lighting designer he knows lost 20 gigs when public venues were closed. Another lost his livelihood when visits to senior facilities were canceled.
“Whole tours have been canceled,” he said.
The Vermont Arts Council is offering $500 grants through the Vermont Rapid Response Artist Relief fund. And Lockridge has asked the Agency of Commerce and Community Development to include Vermont artists in the state’s emergency responses to assist small businesses.
“The consequences of the (understandable) public health protocols — distancing, closures of public venues, the stay-at-home order — were immediate for artists in the state, without an option to compromise or adapt,” Lockridge said. “Unemployment benefits would recognize the humanity and contributions of labor and value of our artists, and the immediacy of response that our current crisis demands.”
It’s very difficult to estimate how much money will be needed if the claims of the self-employed were covered, said Harrington.
“We can assume that not all of those will collect benefits, and they may not collect benefits for the full time,” he said. But it’s clear that to cover the claims of the self-employed, as well as those who were laid off from employers who were paying into the state’s unemployment trust fund, federal assistance will be needed.
“We were one of the healthiest trust funds in the country prior to March 13,” Harrington said. “But right now, I think it’s going to be a question of which states have to borrow the least from the federal government.”
The Senate Economic Development Committee met on Thursday, March 26, just hours after Congress passed a stimulus bill that includes self-employed workers as eligible for federal unemployment benefits, adding as much as $600 per week to the Vermont benefits, which themselves top out at just over $500 per week.
The state will also seek assistance from the feds for upgrades it will need to process the federal money, Harrington said.
“Many states across the country have 30-year-old systems that are hard-coded, so the ability to essentially add another benefit becomes much harder,” Harrington said. “We’re going to have our hands full going forward with that.”
In order to claim the $600 from the federal government, the workers will have to prove that they lost their income – a matter that might be simple if they were deemed an unessential worker. Gov. Phil Scott on Tuesday, March 24, signed an executive order closing all non-essential businesses unless their work could be conducted remotely.
Sen. Michael Sirotkin, D-Chittenden and the chairman of the Economic Development Committee, said he has received dozens of emails from constituents asking him if he thinks they would be eligible for the unemployment payments.
“What should our constituents do?” he asked Harrington. “Do you have general advice for us and for them at this point?” The phone lines at the State Department of Labor have been overwhelmed with calls as a result of the COVID-19 crisis.
Harrington said that while there is information online, if people need specific details about their own circumstances, they will need to call the claims center.
“Someone knowledgeable about the system and the program can walk them through their eligibility,” he said.
He added that the Department of Labor will start offering regularly scheduled town hall meetings for small business owners and workers, and will include one session for people who are self-employed who are counting on efficient administration of the federal benefit.
“It’s very confusing at this point; the public is very confused,” said Sirotkin. “The details are only known as of last night. Things are moving very fast at this point.”
Those with questions about their eligibility should call the DOL’s Claims Center at 1-877-214-3330.
