Scott, Lawmakers Tussle Over COVID Relief For Vermont Businesses
The question of how much federal coronavirus aid should go to small businesses - and how quickly they should get it - has sparked a dustup between Republican Gov. Phil Scott and Democratic leaders in the Vermont Legislature.
The federal government has given Vermont more than $1 billion dollars to help the state recover from the coronavirus pandemic, and Scott wants to give a large chunk of the money to businesses whose revenues have been affected by COVID-19.
Lawmakers have pared down the governor’s proposed aid package, however, and many small business owners say the reduced allocation won’t be enough to get their companies through the crisis.
“They need to get these grants out right now,” said Alan Blackwell, who owns a bar in downtown Brattleboro.
Like all great dive bars, Blackwell’s is one of a kind.
Arkham, named after the fictional psychiatric asylum in Batman comics, is small and dark and a little dingy. And the walls are covered with original artworks and weird tchotchkes that loyal customers have brought in over the years.
“I really wanted this to be a place that people could come in and be able to, you know, see a piece of themselves in it,” Blackwell said.
For Blackwell, who opened the bar in 2012, the establishment is the culmination of a life passion.
“I have always loved dive bars throughout my life,” Blackwell said. “I think that they are one of the truest representations of a community.”
They’re also horribly suited to accommodate the new business realities of COVID-19.
“From a business perspective, it’s been fairly devastating,” Blackwell said.
Blackwell said he’s trying to be realistic about the prospects for the future. And he said he knows that social distancing doesn’t lend itself to a business model that relies on social gathering.
But he said he wants a fighting chance, and wants other small businesses like his to have one, too. And he said the Legislature can give them one by disbursing as much aid as they can, as quickly as possible.
Blackwell said he’s “powerfully grateful” to the legislators who have been checking in with small businesses, and “working around the clock” to assess their needs. But he said success or failure for many hinges on the swift release of financial relief.
“And the bottom line is if they don’t get these grants out now, we’re looking at the forever change of downtowns all across the state,” Blackwell said. “We’re potentially looking at downtowns with boarded up windows because so many of us potentially will not survive this crazy world we’re in right now.”
It’s been almost a month since Scott submitted a wide-ranging aid package that included $200 million in loans and grants for businesses. The governor pleaded with lawmakers to approve the proposal quickly - he initially asked them to sign off in a week - and in its entirety.
“Unfortunately, it doesn’t appear that it’s going to be the case,” Scott said at a press briefing Friday, “as they’re only including about a third of the money we recommended.”
Scott was referring to legislation that would be approved later that day, which appropriates $70 million of the $200 million in business aid that Scott had asked for.
"There were certain things that the governor didn't consider in his package that Vermonters have come to us saying, 'This is a real need.'" - House Speaker Mitzi Johnson
Lawmakers say another relief bill, this one on the order of $80 million, is already in the works. Scott, however, said it won’t be enough to help the businesses his administration is trying to save.
“Some are weeks and 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.”
House Speaker Mitzi Johnson said lawmakers fully appreciate the severity of the revenue crisis Vermont businesses are facing. But she said the governor’s plan failed to balance funding needs across multiple sectors of the state economy.
“There were certain things that the governor didn't consider in his package that Vermonters have come to us saying, 'This is a real need,'” Johnson said.
Johnson said childcare is high on that list.
“Parents can’t get fully back to work if they have to, you know, be with their kids the whole time,” Johnson said.
Johnson said the Legislature is also spreading out federal coronavirus relief funds to address broadband infrastructure and food security.
“The Legislature is putting out a package for extended summer meals, for the Food Bank and for senior meals,” Johnson said.
Chittenden County Sen. Michael Sirotkin, who chairs the Senate Committee on Economic Development, said revisions to the federal Paycheck Protection Program will likely make more Vermont businesses eligible for loan forgiveness under that program.
“And we need to take that into consideration and understand that as well, given that there’s $1.2 billion already out in PPP programs, and there’s more money available,” Sirotkin said. “It makes our money, whether it’s $100 million or $200 million, pale in comparison to the help that businesses can get.”
Sirotkin said Scott is in no position to chide the Legislature for failing to act quickly on the administration’s economic aid package. He said seven weeks passed between the time Vermont received $1.25 billion from Congress, and the time Scott submitted his proposal to the Legislature.
And Sirotkin said lawmakers need time to ensure the second chunk of relief money has an optimal effect on economic recovery.
“And we wanted to do our due diligence in terms of designing a more targeted, detailed program, and we needed additional time to do that,” Sirotkin said.
Many Democratic lawmakers were irked by Scott’s use of his COVID-19 media briefing Friday to criticize the Legislature’s failure to act on his proposal.
Lincoln Rep. Mari Cordes said on Facebook that she was “beyond disappointed” at Scott’s “gross mischaracterization of the work of the Legislature.”
Cordes said Scott’s plan was a “blunt instrument,” while lawmakers were taking care to get stimulus funds “to those most in need.”
“This was an opportunistic ploy that took advantage of Vermonters who are already acutely distressed, depressed, and traumatized,” Cordes said.
For some business owners, however, aid programs from the federal government, the Scott administration and the Legislature are all falling short.
Kate Whelley McCabe owns the Vermont Evaporator Company in Montpelier, which manufactures supplies for maple sugaring hobbyists.
She said revenues started tanking right in the middle of the company’s high season.
“It was a Monday, and it was the day that the stock market started responding to the pandemic,” Whelley McCabe said. “You could see it on our web traffic. We were at on-season levels and all of sudden it was cut in half, and revenues followed shortly thereafter.”
Whelley McCabe said she’s been impressed with the governor’s public health response to the coronavirus pandemic. And she said she initially had high hopes for the aid package he unveiled last month.
"And we wanted to do our due diligence in terms of designing a more targeted, detailed program, and we needed additional time to do that," - Chittenden County Sen. Michael Sirotkin
“I thought, you know, this was just going to be another opportunity for him to impress me,” Whelley McCabe said.
As she read the fine print though, she said she realized she wouldn’t be eligible for much of anything under Scott’s plan, because the $5,700 Paycheck Protection loan she got would be deducted from whatever state aid she qualified for.
Whelley McCabe said the Legislature’s added requirement that businesses suffer at least a 75% year-over-year revenue loss in a single month effectively closed the door on her ability to secure funding.
“I honestly don’t expect anything anymore,” she said.
She said success at Vermont Evaporator Company now rests on whether demand for Vermont Evaporator Company’s products rebounds, and old-fashioned pluck.
“You know, basically, how good we’re going to continue to be to pull ourselves up by our bootstraps,” she said.