Business & Economy

Scott administration outlines $400M economic relief plan

Phil Scott
Gov. Phil Scott speaks at a press briefing on the state’s Covid-19 response on April 3, 2020. Photo by Mike Dougherty/VTDigger

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This story was updated at 6:23 p.m.

Gov. Phil Scott on Wednesday unveiled a $400 million economic relief package that aims to ease the strain of the Covid-19 crisis on Vermont businesses, agriculture, and housing. 

The Scott administration outlined the two-phase proposal, which starts off with $310 million to provide “immediate relief” to businesses struggling to stay afloat during the pandemic, at his regular three-times-a-week press conference on the coronavirus crisis.  

“I know there are too many small business owners who are desperate right now,” Scott said. “Family businesses that have been around for decades who don’t see a path out of the red. … The corner cafes, restaurants and distilleries, once thriving, now can’t pay their rent.”

The plan would be funded by a large portion of the $1.25 billion the state received from the federal CARES Act, which President Donald Trump signed in April.  

The federal government has given states a great deal of flexibility for spending those Coronavirus Relief Fund dollars, as long as they are harnessed to cover expenses related to the Covid-19 crisis. 

But to move forward with the relief package, Scott will need approval from lawmakers, who have oversight over how the federal dollars are spent. 

Under the first phase of the plan, the state would provide $250 million in direct grants and loans to Vermont businesses, including $150 million for the food, accommodation, retail and agriculture sectors, and $80 million for grants and low-interest loans to other businesses. 

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The state’s dairy industry alone would receive up to $50 million of the assistance. 

An additional $20 million would be available to small businesses with five or fewer employees and less than $1 million in annual revenue. 

“The storm is not over but this is our first collective step towards repairing economic bridges and ensuring the survival of our business community,” Lindsay Kurrle, the secretary of the Agency of Commerce and Community Development, said at the press conference. 

The package also includes $42 million in direct assistance to landlords and tenants.

Josh Hanford, the commissioner of the Department of Housing and Community Development said the package aims to “stabilize the rental housing industry and prevent tenants from experiencing eviction and possibly homelessness.” Hanford said it would be able to assist more than 13,000 Vermont households. 

The proposal also includes $8 million that will be used to rehabilitate housing stock for 250 families experiencing homelessness during the pandemic. 

The second phase of the relief plan would spend $90 million on initiatives including expanding broadband access, housing assistance, retraining unemployed Vermonters, and additional grants and loans for businesses. 

Scott said the package is a first step in providing relief to the state’s economy. 

“We understand that this is not enough, and we anticipate that there will be more in the future,” Scott said. “But this is really just to stabilize those who are in dire straits.” 

Shawn Shouldice, the state director of the National Federation of Independent Businesses in Vermont, said in a statement that Scott’s relief package was needed because federal aid so far hasn’t covered all the expenses small businesses have faced. Federal loans were helpful, she said, but were targeted at payroll expenses.

“It is our hope that the legislature takes swift action to enact these new state grants and loans and then the administration executes implementation quickly and with clear guidance to help small businesses with other costs they are facing,” Shouldice said. 

Mark Frier, an owner of three Vermont restaurants who has advocated for financial assistance for the service industry during the Covid-19 crisis, called the announcement of Scott’s recovery package “very encouraging news.”

Frier, who owns The Reservoir in Waterbury, and Tres Amigos and The Bench in Stowe, said restaurants will need the aid to get up and running again. 

“We need help just to cover that labor to turn things back on again,” Frier said. “Whether or not this is enough to save our industry, I think time will tell.” 

Restaurants will probably need other infusions of cash given that turning a profit will be harder in the coming months as the businesses deal with the costs of reopening, and see fewer dollars from tourism, he said. 

“We’re going to probably need additional access to either grants or affordable loans that we can help cover a period of time that we are unprofitable,” Frier said. 

Adam Grinold, the executive director of Brattleboro Development Credit Corp., who helped craft the proposal to provide small employers with grants and loans, said the package “relieves some of the pressure that is most immediate” for small businesses. 

“In general, the scope and scale of the challenges are so great that this won’t meet everyone’s needs, but it’s a great first step,” Grinold said. “It’s getting money into the hands of the businesses who desperately need it right now as we’re … more than two months in.” 

So far, lawmakers are open to the proposal. 

Sen. President Pro Tem Tim Ashe, D/P-Chittenden, said the relief plan is a “good starting point” for providing “substantial support to preserve small businesses,” which haven’t qualified for much federal assistance so far. 

“They’re not eligible for unemployment or self-employment assistance, they haven’t been good fits for the federal small business relief bills,” Ashe said. “So in that sense, this is using federal funds to plug a hole that Congress and the president created.” 

But he said that he would also like the package to include more housing assistance — particularly funding to create new housing stock — as well as a larger investment in broadband expansion, and money for schools to make the physical changes necessary for students to safely return to classrooms in the fall. 

Ashe also wants to review the large amount that the governor has proposed spending on the dairy industry. 

“I want to make sure that we’re not ignoring all of the non-dairy businesses that are out there,” Ashe said. “And we’ll want to understand what the envisioned support is for farmers who produce something other than milk and who also have been losing all their clients or customers right now.” 

Ashe and Sen. Jane Kitchel, D-Caledonia, the chair of the Senate Appropriations Committee, both said they were disappointed that the proposal doesn’t include funding for the Senate’s proposal to boost pay for essential workers during the pandemic. 

That hazard pay program, which passed the Senate earlier this month, would cost the state $60 million. 

In a statement, House Speaker Mitzi Johnson said that she agrees with Scott that “Vermonters need immediate relief and investments to restart our economy.”

“I look forward to getting the details on the proposal, and ensuring that opportunities are available for the people and businesses who need it most,” she said. 

She said the governor’s plan identifies “many areas” that overlap with the House’s priorities including housing, internet expansion and supporting small businesses.  

“I want to be sure that as much as possible, this one-time funding is invested in getting Vermonters get back on their feet, while creating a lasting impact for years to come, such as investments in broadband expansion, housing stock, a safe and healthy food supply chain, and emergency preparedness,” Johnson said. 

 Colin Meyn contributed reporting.

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Xander Landen

About Xander

Xander Landen is VTDigger's political reporter. He previously worked at the Keene Sentinel covering crime, courts and local government. Xander got his start in public radio, writing and producing stories for NPR affiliates including WBUR in Boston and WNYC in New York. While at WNYC, he contributed to an award-winning investigation of how police departments shield misconduct records from the public. He is a graduate of Tufts University and his work has also appeared in PBS NewsHour and The Christian Science Monitor.

Email: [email protected]

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