Editor’s note: The following is a Campaign for Vermont April 26 legislative update.
The economic development bill found itself in hot water this week as senators look to slash funding for a number of projects — some of which may be critical to economic recovery. The pension discussion is moving from the House to the Senate as well.
The Senate looked at H.315 this week, which contains a program called the Economic Recovery Bridge Grant. The program looks at federal tax loss in 2020 to determine eligibility for grant money from the American Rescue Plan Act (ARPA). The State Auditor, Doug Hoffer, took issue with this calculation because there is no threshold for qualification so slight losses could lead to significant grants. Also, the bill doesn’t take into account businesses that continually run losses or those that had a single-year loss but have rebounded and would be cashflow positive in 2021 regardless of the grant money. He is advocating for a more nuanced approach.
Concern around the capital seed fund from 2010 surfaced in the Senate Economic Development Committee this week. This program was meant to be a revolving loan fund, but the original $5M in funding does not appear to have been recouped. There is a proposal to add another $1M in funding but first legislators want to understand what the ROI of the program actually is.
There is some level of risk that the Senate will pull much of funding out of H.159 which would effectively quash any economic development effort this legislative session. Some programs, like the UVM technology transfer program, may only receive half of the funding originally envisioned by the House. Similar cuts may happen for outdoor recreation efforts and tourism and marketing budgets. While prioritizing federal dollars and examining the costs and benefits of each program is a worthwhile effort, we should be careful to not make cuts that will undermine recovery efforts.
There was a discussion in House Natural Resources on Tuesday about expediting administrative review and permitting of the Act 250 process for projects that receive American Rescue Plan Act (ARPA) funding. Administration officials pointed out that speeding up review and permitting is largely a function of resources. More staff equals faster permits.
The Senate is getting down to decision time on broadband funding. It seems like the Finance Committee has decided to allow for more flexibility around who can apply for the $250M in grant money available. However, there is no decision yet around affordability measures. This could prove important because over the next few years the cost of service is likely to overtake availability as the largest driver of access. Senators are also skeptical of setting up a new statewide entity to take on broadband buildout and funding because of the time it takes to set up such organizations. ARPA funds need to be spent within the next three years and wasting 6-12 months setting up a new organization may prove to be a costly delay.
The pension bill, H.449, was voted out of the House this week after a debate over defined benefit versus defined contribution plans (like state colleges, some state employees, and municipalities have). The bill would create a task force to look at benefit and contribution recommendations and bring a proposal back to the legislature next year. We are concerned that delaying action on this issue will make the problem worse and force even more painful cuts.
There are also governance changes in the bill that would require training for members of the Vermont Pension Investment Committee (VPIC) and require experienced financial and investment advisors be consulted in setting expected rates of return and in making investment decisions.
The Senate also looked at the bill this week and there was some debate about the makeup of VPIC, particularly around whether or not legislators should serve on the board. The Senate has no qualms about adjusting benefits and is already in discussions around what groups should be exempt. They agreed with the House approach of exempting existing retirees and those within five years of retirement, however there was interest in extending this to ten years (which aligns with our recommendation of consistency between the vestment and exemption periods). The Committee event went as far as to suggest a goal should be set for deficit reduction. $600M was thrown out as a possible solution. While a great deal of time has been spent on the make up of the VPIC, equal time may need on determining the make up of pension benefits, as well as the design and funding of the task force given the scope of its responsibilities.
This week Campaign for Vermont released a project proposal to do background research on all 30 Vermont State Senators to determine which might have conflicts with the pension funds or unions. Our intent is to publish a list of those conflicts and ask legislators to recuse themselves where appropriate. Currently, the project is almost 70% funded.
House Government Operations started looking at S.15 this week, which would move towards universal mail-in voting. A number of advocacy groups are supporting the bill because of expanded access to voting. However, there are some concerns around the ability to town clerks to manage this process going forward and whether we are asking them to do too much. As part of this effort, the Secretary of State’s office is promising to work on cleaning up voter checklists in order to make sure that ballots get to the right people.