Scott says Covid-19 bills short on business support; grant guidelines coming this week

Sweetwaters restaurant
Diners at reopened Sweetwaters restaurant on Church Street in Burlington are reflected in the windows the closed Ri-Ras restaurant on Friday, May 22. Photo by Glenn Russell/VTDigger

Gov. Phil Scott on Monday said that Vermont businesses strained by the Covid-19 pandemic could soon be able to begin applying for $70 million worth of state aid, with guidelines for the business grants coming on Wednesday. 

But the governor also reiterated that he doesn’t believe lawmakers have gone far enough in financial support for struggling businesses. Speaker of the House Mitzi Johnson, D-South Hero, pushed back on the governor’s criticism and said the legislative package is on par with the governor’s proposal. 

During his press conference, Scott said that the economic relief package he proposed in May would have provided about $100 million in additional assistance, compared with the series of Covid-19 aid measures legislators passed this month.

This initial round of $70 million in financial assistance, which was passed by the Legislature earlier this month, is the first in a series of grant programs for businesses that are expected to be rolled out in the coming weeks. 

The Agency of Commerce and Community Development plans to detail the guidelines for grant eligibility on Wednesday. (Legislators considered setting eligibility themselves, but ultimately left it up to the administration.) A spokesperson for the agency said a specific date for the portal launch has not been set.

On Friday, the Legislature passed roughly $600 million worth of Covid-19-related aid, using federal funding the state received in April under the federal CARES Act. 

So far, the Legislature has spent more than $200 million of the $1.25 billion in federal funds on financial assistance for businesses.

Scott is expected to sign the proposals passed by lawmakers in June. But the governor has said that overall, he doesn’t believe that the Legislature has passed enough aid for the business community, and that he’s hopeful that when lawmakers return in August for a special budget session, they will work to approve more financial assistance.

“My concerns have been not enough economic relief for businesses, but that doesn’t mean we can’t come back in August and September to deal with that and we’ll have a better idea of the fallout from this over the next month or so,” the governor said Monday.

Businesses are desperate for the help

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The Agency of Commerce and Community Development, which has been tracking business losses since the beginning of the Covid-19 crisis, found that in first month of the shutdown businesses lost more than $300 million. 

In an email last week, Nate Formalerie, a spokesperson for the agency, said that it is fair to say the first round of $70 million in assistance “will not meet demand.”  

Gov. Phil Scott speaks during a press briefing on the state’s Covid-19 response on April 17. Photo by Mike Dougherty/VTDigger

Scott urged lawmakers to adopt the $400 million economic relief plan he proposed in May. That plan included a first round which contained $150 million in grants and $100 million loans for businesses impacted by Covid-19. The second round of his plan included an additional $55.5 million in grants for businesses.

Speaking to reporters Monday, Johnson said that the amount of grant funding lawmakers have approved so far is on par with what the governor proposed. 

According to the Joint Fiscal Office’s breakdown of proposed spending of federal Covid-19 dollars, legislation lawmakers passed in the last few weeks would direct just over $200 million to businesses. 

And that doesn’t include some proposals Johnson highlighted on Monday, such as the $12 million in assistance lawmakers included for the child care sector.  

“All of those are businesses,” Johnson said of child care providers. “They are small, mostly women-owned businesses that are not only businesses in themselves, that create jobs and create economic activity, they are a critical part of making sure that we have a workforce to get back.”

She also pointed out that businesses will see a third of the $8 million the Legislature approved to help Vermonters afford utility arrears over the past several months, and will benefit from the $17 million lawmakers approved for broadband expansion throughout the state. 

“I think when you add all of those things up, we’re about the same as the governor’s grant proposals,” Johnson said. 

Mitzi Johnson and Tim Ashe
House Speaker Mitzi Johnson speaks to reporters at the Statehouse. Photo by Mike Dougherty/VTDigger

The speaker said that there is still about $140 million left of the federal dollars the state received from the CARES Act. Some of this money is expected to go towards helping the state’s K-12 education system weather expenses related to the pandemic. But the speaker said some of it could also go towards additional business aid. 

Senate Minority Leader Joe Benning, R-Caledonia, said he feels “on the fence” about whether lawmakers have prioritized enough funding for businesses.

He says he “can see the wisdom” in holding onto the remaining federal dollars until the state has a better sense of its ongoing needs, and whether the federal government is going to change the parameters for how the money can be spent.

Legislators have been hopeful that federal officials will modify the guidance so that Vermont can use the funds to help fill the budget gaps it is facing from the economic strain, and revenue loss caused by the virus. 

At the same time, Benning said that he has heard from “every imaginable business entity under the sun that has had their income come to a screeching halt.”

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“And it is, I think, incumbent upon us to do what we can for them immediately because we end up potentially losing some of them while we wait out … the parameters of how this money can be spent expanded.”

Benning said that if more aid isn’t available until later this year, he hopes businesses will be able to hold on. 

“Because decisions will be made in August and I’m hoping that they stick around long enough to be able to benefit from that,” he said. 

Correction: A previous version of this article incorrectly stated that Vermont will begin accepting small-business grant applications as soon as Wednesday. The Scott administration will announce the guidelines for the grants on Wednesday.

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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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