This past week the Vermont legislature re-convened to continue the work of crafting a budget for these unique times. Due to the immense financial uncertainty last spring, the legislature determined early on that trying to predict a full year budget wasn’t prudent. So we approved a first quarter budget and are meeting now, with new financial forecasts and projections and Governor Scott’s proposals, to map out spending for the rest of this uncertain fiscal year. There is also about $200 million remaining in federal CARES money to allocate where it is needed most.
While continuing to meet remotely, much of this week was devoted to committee work: digging into budget requests and receiving updates on the successes and failures of the relief spending authorized in June. In addition to tweaking earlier programs the legislature will take up some bills that had already passed one chamber and were awaiting action in the other. The goal is to complete all work and adjourn by September 25th.
One of the biggest unknowns is whether there will be another federal stimulus package, and if there is, how large it will be and what strings are attached. The current stimulus dollars must be spent by December 31 or they revert back to the federal government. Will that deadline be extended?
If more federal money does arrive after the legislature adjourns, the Joint Fiscal Committee (comprised of four Senators and four Representatives) is authorized by law to accept and allocate those grant dollars.
As always, please contact me with questions and concerns.
Last Friday, almost $600 million dollars in federal COVID-19 relief funding (CARES Act) bills were sent to Governor Scott for his signature. Then the Legislature adjourned until late August, when it will meet again to tackle the second round of the budget using updated financial projections.
This almost $600 million adds to the over $400 million already spent or appropriated to help Vermonters, more than $1 billion total. The last round includes:
$35 million for farm relief
$82 million in economic recovery grants (for businesses)
$275 million for health care stabilization (for medical facilities)
$62 million in housing assistance
$12 million for Parent Child Centers and restarting childcare and summer programs
$20 million for broadband expansion
$15 million for local governments
A very readable list of covid-19 relief fund appropriation can be found here: https://ljfo.vermont.gov/assets/Uploads/0ab5819219/Floor_Doc_Version_of_Senate_Final_CRF-v5.pdf
The State Auditor has tracked over $4 billion in covid-19 federal spending in Vermont, which includes the $1.25 billion from the CARES Act. https://auditor.vermont.gov/content/covid-19-federal-and-state-expenditures-0
The use of this CARES money must follow strict federal guidelines, including that it must be spent by December 31 of this year. Our biggest problem is not simply how to spend the money in time, but rather seeing that it’s done responsibly: establishing control measures for who qualifies, applications, distribution of funds, and verification.
The Legislature also approved a handful of policy bills including S.219, a bill addressing racial bias and use of force by law enforcement. The bill, which passed the House 147-0 in a roll call vote, prohibits the use of chokeholds and requires state police to utilize body cameras. Perhaps most important, the bill requires that these decisions be reconsidered next year to determine if they are the right actions in what is a complicated, fluid and contentious dynamic.
As always, please contact me with questions or concerns.
The Vermont Legislature is working diligently on responsible funding plans for the new COVID-19 reality. Instead of creating a typical budget for fiscal year 2021 which begins July 1, the House approved a budget only for the first quarter. With revenues down, businesses and residents struggling, expenses uncertain, and federal funding having many strings attached, we can’t responsibly budget in the face of so much uncertainty.
This budget funds state operations for July, August, and September, generally allocating departments with 25% of their 2019 budgets — with two exceptions. VTrans and The Agency of Natural Resources conduct the bulk of their work during summer months, so they would be funded at 60% and 50% respectively. In August the Legislature will reconvene and, using updated revenues and forecasts, will craft the budget for the remainder of the year.
While a lot of federal money has already been distributed in Vermont through programs like Unemployment Insurance and the Payroll Protection Program, much more is needed. The Legislature is giving final approval to a first round of $93 million in targeted relief. State Auditor Doug Hoffer has an excellent breakdown of state and federal spending dollars on the Auditor’s website, https://auditor.vermont.gov/content/covid-19-federal-and-state-expenditures-0
The House is putting finishing touches on a major allocation of nearly $600 million to shore up almost every sector of the economy, within the federal guidelines (which are strict and often unclear). Because the amount, timing, and conditions of further federal funding are still uncertain, we are holding $400 million in reserve for allocation in August when we better know what needs are most critical at that time. Should federal funds come through before August, those reserves can be released earlier.
But none of this explains why the process is so painfully slow. Under the Governor’s State of Emergency the administration can and did take executive action quickly. However money can only be allocated by the Legislature and that process is designed (for normal years) to be slow precisely to prevent hasty action.
For example, the above $600 million allocation is part of federal COVID-19 relief funds. Since the money arrived in April we have been asking for clarification on the restrictions and guidelines on its use. The Governor proposed general blocks of spending: agriculture, housing, health care, schools, etc. The House adapted that proposal, making changes as new information develops. Committees of jurisdiction dig deep into the details of how relief funding can be most effectively used within the given restrictions, and taking testimony from many, many stakeholders and experts. Those recommendations then go to the Appropriations Committees which sifts through them and pares down the huge funding requests to match the dollars available. The House then has to debate, vote on it twice, and then it goes to the Senate where the same process must occur.
As always, please contact me with questions or comments.