The Vermont Senate approved legislation Tuesday that would send additional unemployment payments to laid-off workers who have children, while delaying a massive hike in taxes on businesses.
An amendment to S.10 — the result of days of closed-door negotiating between lawmakers, plus several rescheduled floor votes on the bill — passed 18-12 after lengthy debate on the virtual Senate floor.
The Senate then approved the slimmed-down bill, which would send additional $50-a-week checks for the next five years to unemployment claimants with children, while freezing an impending hike on businesses’ unemployment insurance tax payments.
S.10 moves next to the House, where it will be reviewed by the Committee on Commerce and Economic Development.
The bill’s passage follows weeks of wrangling between business leaders and workers’ groups; the final version is an effort at compromise, sponsors said.
“What we are trying to do with this amendment is come up with an appropriate balance for businesses and workers where we can have a win-win situation,” said Sen. Michel Sirotkin, D-Chittenden and chair of the Senate Committee on Economic Development, Housing and General Affairs, on the virtual Senate floor Tuesday.
Vermont, which at one point had the nation’s highest rate of women on unemployment benefits during the pandemic, would join 13 other states that now offer an additional benefit to laid-off workers with dependent children if S.10 becomes law.
“This meets an urgent need,” said David Mickenberg, a lobbyist for Working Vermont, a coalition of public- and private-sector unions, and the Vermont Building and Construction Trades Council. “Working women and others who take care of dependents and are trying to re-enter the workforce will be facing the impacts of this pandemic for years to come.”
S.10 has sparked debate between labor and business interests since early this year.
The bill originated as a Department of Labor proposal that a hike in businesses’ unemployment insurance tax payments — now slated to increase drastically in July — be delayed over several years. If the Unemployment Insurance Trust fund is healthy enough to give businesses a cushion on taxes they pay into the fund, labor interests soon argued, a marginal increase in benefits should go to laid-off workers, too.
But Vermont business groups objected to a version of the bill endorsed by the committee three weeks ago; it proposed a 20% across-the-board benefits increase on top of the dependent allowance.
They worried the benefits would cause pain for their enterprises as the pandemic waned.
Those criticisms extended negotiations between Sirotkin and Senate Minority Leader Randy Brock, R-Franklin, over the level of benefits included in the bill. Their talks led to the compromise amendment that prompted an impassioned discussion on the virtual Senate floor Tuesday.
‘It’s about the people’
“I think one of the reasons this has been such a difficult issue for so many senators is because, at its core, this bill is about people,” said Senate President Pro Tempore Becca Balint, D-Windham and a member of the economic development committee. “It’s about the people who have been struggling through the pandemic, and it’s about the people who run small businesses in our communities.”
Business leaders and Republican lawmakers have been vocal in expressing employers’ concerns over the bill’s benefit proposals. On Tuesday, lawmakers who supported the benefits said their constituents have likewise made clear how important extra payments would be for unemployed workers with children.
Sen. Kesha Ram, D-Chittenden, visited Tuesday with a group of state workers protesting a plan for solving Vermont’s pension crisis. She said one of the first questions from constituents was about the dependent benefit’s progress.
“For them, predominantly women, a strong safety net that takes care of our families is important at all levels,” said Ram, a member of the economic development committee and the original proponent of the dependent benefit.
However, Democratic lawmakers appeared split Tuesday on whether to support the bill’s benefit proposal.
Sen. Jane Kitchel, D-Caledonia and chair of the Senate Committee on Appropriations, was one of two Democrats who chair Senate money committees to vote against the legislation. Sen. Dick Mazza, D-Grand Isle, joined Kitchel in casting a “nay” vote; he chairs the Senate Transportation Committee.
Kitchel said on the floor last Friday that she believes it would be better to use federal American Rescue Plan funds to increase benefits than to use state money at this stage of the pandemic.
In a phone interview Tuesday, she said she voted against the bill because of fiscal uncertainty posed by a benefits change at a key moment of pandemic recovery.
“We know we’re not out of the state of emergency; we know that it’s still uncertain how the economic recovery is going to play out. So for me, it’s a matter of timing,” Kitchel said. “If we want to have discussions around benefit changes and adding a dependent allowance, I would prefer dealing with those decisions when we have more certainty about where we are.”
Business leaders unconvinced
Beyond the benefit and tax delay, S.10 proposes a $66 million write-off in the taxes businesses are expected to pay into the Unemployment Insurance Trust Fund over the next 10 years.
The amended bill would free businesses from having to repay those tax exemptions in future years, Balint emphasized on the virtual Senate floor.
But some business groups still oppose the bill, saying it’s ultimately not in lawmakers’ hands whether the $66 million tax write-off will have to be paid back; that hinges on the Vermont Department of Labor’s future determinations about the fund’s solvency.
“The trust fund balance isn’t an arbitrary number where we get to say, ‘Just take $66 million off of it’,” said Austin Davis, a lobbyist for the Lake Champlain Chamber.
Gov. Phil Scott, too, signaled his opposition to benefit proposals at his press conference Tuesday, as senators debated the bill.
“I don’t think this is the time to add things. I think that the unemployment benefit with the federal allotment has been quite beneficial,” he said. “Right now, we need some relief for those businesses that are going to be on the hook. I’ve heard many describe what’s in the bill as a tax break for businesses. It isn’t a tax break — it’s just a deferment.”
Said Sirotkin, who had pushed for the initial 20% across-the-board increase as well as the dependent benefit, the amended bill should be looked at as a positive outcome for all parties.
“It’s clearly a win-win bill, and I am proud of the 18 senators who voted to support it,” he said in an email Tuesday.
Correction: Because of an editing error, a photo caption with this story has been updated to reflect that the senators who were shown were the two Democratic committee chairs to vote against the bill.
