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As the Legislature passed its first round of emergency grants for businesses strained by the Covid-19 crisis, Gov. Phil Scott criticized lawmakers for not approving economic relief fast enough.
The Vermont House on Friday sent legislation to Scott’s desk that includes $70 million in grant funding for businesses hit hard by the Covid-19 crisis, while the Senate passed a package that would give $30 million in grants to farms strained by the pandemic.
But at his press conference Friday morning, the governor and members of his administration pressed the Legislature to move faster to approve the full $400 million economic relief proposal he pitched last month.
“We were inclusive in this work in hopes it would move through the Legislature quickly and largely intact,” the governor said of his financial assistance plan. “Unfortunately it doesn’t appear that it’s going to be the case, as they’re only including about a third of the money we’ve recommended.”
“While I am appreciative of the Legislature moving forward with something, even if it is a reduced amount, I am hoping they will get back to work on the remaining $300 million quickly,” the governor added.
The governor’s plan included about $200 million in direct grants and $50 million in loans to businesses, in addition to funding for rental assistance, broadband expansion and other measures.
It relies on a portion of the $1.25 billion the state received from the federal CARES Act in April to cover Covid-19 expenses.
After receiving Scott’s proposal, lawmakers decided to expedite an initial round of grants for businesses and follow up with more financial assistance later.
“Our belief is that that will actually help get money out the door, and not just out the door, but faster perhaps than even the governor’s own proposal,” Senate President Pro Tem Tim Ashe, D/P-Chittenden, said Friday.
Ashe said that lawmakers’ work on the governor’s proposed grant program has made it more “streamlined and flexible” for Scott to administer.
He said lawmakers removed complicated eligibility criteria, and made it easier for the Vermont Department of Taxes to distribute funds to businesses.
Legislators have also said that businesses don’t want to receive loans from the state, and take on debt at a time when they are facing hardship. The Senate and House have decided to prioritize grants to businesses over loans, and have changed the governor’s proposal to reflect that.
“I know that when the chambers of commerce and some of the administration officials tell small businesses ‘Oh, the Legislature should just adopt our proposal,’ many of those small businesses don’t realize that that proposal also relies on a substantial amount of loan funding they themselves are telling us they don’t want,” Ashe said.
House lawmakers say that some of the loan proposals in the governor’s plan aren’t eligible for CARES Act funding, and that if they took on debt, businesses would have to pay back the federal government — rather than the state — if they were still outstanding after Dec. 30, 2020.
“If the legislature had rubber-stamped the Governor’s proposal, we would have left Vermont businesses in a tough position on 12/30, or the state holding the bag for giving out CARES money for ineligible uses,” said Katherine Levasseur, House Speaker Mitzi Johnson’s chief of staff.
Levasseur added that the governor “took seven weeks” from the April passage of the CARES Act to propose his $400 million economic relief plan to the Legislature.
“Recognizing the urgent need to get relief out immediately, the legislature fast-tracked this initial package and landed it on his desk with tri-partisan support in less than half that time,” she said of the grants the Legislature passed on Friday.
The grant program heading to the governor’s desk includes $70 million for businesses that have seen a 75% reduction in total sales during a single month of the Covid-19 crisis, compared to sales in the same month last year.
Businesses that collect rooms and meals taxes — such as restaurants and lodging establishments — would have access to $50 million of the funding.
All other businesses could apply for the remaining $20 million.
It would be up to the Scott administration to determine the size of the grants and the expenses they could be used to cover.
“During a normal legislative session we would take months to work out the details of such a large program,” Rep. Charlie Kimbell, D-Woodstock, said introducing the bill on the virtual House floor. “But Vermont businesses and employers need assistance right now.”
Rep. Heidi Scheuermann, R-Stowe, said she was concerned about the state of Vermont’s “crushed” hospitality industry, and that the state should be releasing more financial assistance for the business community.
“I’m really concerned that we’re not actually sending this money out immediately, the bills are piling up,” she said. “Holding onto it seems like we’re eating our seed.”
The governor also stressed the importance of getting more money to businesses as quickly as possible.
“I can assure you these employers are on the brink. Some are weeks, or even days away from bankruptcy and shutting their doors forever through no fault of their own,” Scott said.
“They can’t wait another month or two for relief, they need our help now.”
But lawmakers say that additional funding for businesses is coming in short order.
The House Economic Development Committee is working on a second round of grants to businesses that will total $80 million.
The Senate on Friday also passed $30 million worth of grants for farms.
Unlike the Scott administration’s economic recovery plan though, which includes a $50 million relief proposal for the dairy industry, other farming industry businesses would be eligible for financial assistance under the Senate’s plan.
Speaking in the Senate Economic Development Committee on Friday, Sen. Randy Brock, R-Franklin, said that some members of the public have the impression that the Legislature wants to give less aid to the business community than the governor, when lawmakers are just breaking up aid into different installments.
“The perception is that we’ve cut the amount of money going out to businesses in half,” Brock said. “I’m getting letter after letter after email, saying that what we’re doing is unconscionable because they need the money to survive now, not at some point in the future, if at all.”
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