During last Wednesday and Friday press conferences, the Governor continued his stance of moving slowly and cautiously in opening the economy. He has extended the Stay Home, Stay Safe Order to June 15. The Governor did indicate that he would be allowing the opening of restaurants and hair salons and increasing the gathering number to 25 before or by June 1, with extremely specific guidance.

Here is what is allowed now:

The Governor is adamant that safety comes before politics in dealing with the opening of the state’s economy. There are concerns within some sectors that the longer it takes to open, some of those businesses will not survive.

Please remember that if you are operating a business that you must follow the MANDATORY HEALTH & SAFETY REQUIREMENTS FOR ALL BUSINESS, NON-PROFIT & GOVERNMENT OPERATIONS that have been put in place.

This bill passed the House last Friday and will now go to Senate Appropriations.

Summary: The House proposed FY 2020 Supplemental Budget Adjustment bill addresses three issues that have resulted due to the COVID-19 epidemic:

* First; makes reductions/changes to FY 2020 appropriations in order to address the estimated $52 million in revenue erosion and other general fund loss.

* Second; adds authority to use interfund borrowing from the Coronavirus Relief Fund, or if necessary, the use of reserves to cover the estimated $143 million in FY 2020 revenue moving to FY 2021. Repayment would occur when payments are made in FY 2021. Any extra funds will be available for FY 2021 expenses.

* Third; appropriates Coronavirus Relief Funds (CRF) for expenses incurred in FY 2020.

To close the FY 2020 year in balance:

* In order to balance the $51.7 million in lost General Fund revenue ($48.1 lost in forecast change and $3.6M reduction of Property Transfer Taxes going to the General Fund), and begin to address the $143 million in deferred revenue, the BAA uses the following:

Attorney General additional settlement proceeds $ 2.0M

DFR – Additional proceeds from funds $ 3.0M

AHS Federal Enhanced FMAP $ 38.0M

AHS Reduced Medicaid Claims $ 8.7M

Vermont Life Magazine $ .375M

Tax – Renter Rebate Program Savings $ 1.4M

Treasurer – One Time Bond Investment Earnings $ 2.7M

Treasurer – Unclaimed Property $ .6M

Liquor control – Additional Direct Application $ 4.63M

Secretary of State – Fund Surplus $ .4M

Boys and Girls State $ .01M

USS Vermont $ .035M

TOTAL ADJUSTMENTS $61.88M

* Adds authority to use interfund borrowing from the CRF or the use of reserves to balance the remaining lost revenue with repayment when the revenue is collected in FY 2021. Any extra funds will be available for FY 2021 expenses.

Appropriates Coronavirus Relief Funds (CRF) to meet COVID – 19 FY 2020 needs:

Appropriations made for the General Assembly, the Judiciary, the Vermont State Colleges (VSC), the University of Vermont (UVM), and the Vermont Student Assistance Corporation (VSAC). Provides authority to cover pension impacts of pay changes.

* 1. $500,000 for legislative staff expenses related to COVID-19 in FY 20. 2.$750,000 for expenses of the legislature beyond the 18-week planned session through June 19th; 3. $4,910,500 for Judiciary and authorization for limited service positions to enable Judiciary to resume operations including equipment for remote operations, and other expenses; 4. $5,117,792 to Vermont State Colleges to address the cost of refunds to students for room and board services unable to be provided due to COVID-19 campus closure; 5. $5,016,300 to the University of Vermont to cover the cost of refunds to students for rooms and parking services unable to be provided sue to COVID-19 campus closures; 6. $5,100,000 to the Vermont Student Assistance Corporation for increased grants reflecting COVID-19 economic impacts on eligibility.

* Provides authority for the Treasurer to identify the impact of additional pay, hazard pay and COVID -19 related personnel costs on retirement liabilities and transfer funds to offset these retirement system pressures on the fund.

Human Services Caseload Reserve $98,236,983

General Fund Budget Stabilization Reserve $81,472,791

General Fund Balance Reserve (Rainy Day) $31,553,274

BILLS SIGNED BY THE GOVERNOR DEALING WITH COVID-19

HOUSE AND SENATE AGRICULTURAL COMMITTEES

SCHOOL BUDGET PROPOSAL/ADMINISTRATION

COVID-19 TESTING OPPORTUNITIES

SBA PAYCHECK PROTECTION PROGRAM/VT SBA

UPDATE FROM BOB GRAY/MIKE OSCAR

RESOURCES

The following bills have been signed by the governor and will be enacted. These bills are all specific to the COVID-19 pandemic.

The House and Senate Ag committees continue to meet. Last week the House took testimony from members of the dairy community regarding the financial challenges facing the dairy industry. The group advocated for direct financial support from the state. I think that the House Agricultural committee will wait to see what the Senate Agricultural committee passes out for a dairy financial package and then work from that.

As I indicated last week, the Senate Ag committee had drafted a bill that would provide a payment to dairy farmers. The original bill had language that would require a producer to have a feasibility study to be conducted on their farm by the Future of Farming Response Team to receive the payment. That language has been removed and replaced with a requirement of a survey to be completed to find out what producers are needing/looking for in business planning, transitioning, or diversifying. There seems to be lack of appreciation and understanding of the complexities that are needed to run a successful dairy business. The Senate committee is scheduled to meet this week to finish their work on this bill. The bill would then have to go to Senate Appropriations and then to the full Senate before it would get to House Agriculture.

Adam Greshin, Finance Commissioner, testified in the House Ways and Means committee last Thursday with a new proposal from the Administration that would require a re-vote on all school budgets. The reasoning for this proposal is that it would allow the districts to decide how they wanted to respond to their financial challenges because of COVID-19. At this point there are only 19 districts that do not have school budgets. This proposal did not get support from most of the Ways of the Means committee or Kate Webb, chair of the House Education committee.

The Health Department has organized testing for Vermonters. Anyone without symptoms can now be tested at a pop-up location. Health care workers, first responders, and childcare providers are encouraged to get tested. People who are returning to Vermont, and who are at day 7 or later in their quarantine period, can also be tested. Follow this link for more information.

o This is for asymptomatic people to sign up for a COVID-19 test to tell you if you currently have a COVID-19 infection. This is not a serology/antibody test and will not tell you if you were sick with COVID-19 in the past.

o The information will be used by the Vermont Department of Health and testing partners to coordinate the scheduling of COVID-19 testing in conjunction with the Vermont National Guard and partners. Information on this site will be also be used for public health purposes. Your information will be kept confidential and used only for diagnostic and tracking purposes.

In response to the COVID-19 pandemic the SBA Vermont District Office is hosting a free daily webinar from 9 a.m. to 10 a.m. Monday to Friday to discuss Paycheck Protection Program, the Economic Injury Disaster Loan and Advance, and any pertinent updates. There is still money in these programs if you have not signed up yet, but I encourage you to do it soon as the money will run out.

Click here to join the webinar.

To join by phone, call (202) 765-1264 and when prompted enter the code 470177937#. Upon joining the call, mute the phone to cut down on the background noise, and please do not place the call on hold as the hold music will be heard over the presenter.

The Vermont SBA offers a tremendous amount of help and information to business to navigate the COVID-19 crisis. Please utilize their website that provides guidance for federal assistance, including what loans and grants are available, and the difference between loans and grants. For more information, email susan.mazza@sba.gov.

Status of Dairy Direct Payments by Bob Gray

Everyone is wondering when USDA is going to announce the release of the direct payments to dairy farmers from the last round of Stimulus monies. $2.9 Billion was set aside for dairy. My understanding is that the Office of Management and Budget has cleared USDA’s funding direct payment program. If that is the case, an announcement should be coming soon. It has now been well over a month since the $2.2 Trillion Stimulus Bill was passed in mid-April. The $125,000 payment cap per commodity and $250,000 payment cap per entity is going to be increased. We are not sure by how much. Speculation is that it might be increased to $250,000 per commodity and $500,000 per entity — but that is a pure guess. We still don’t know how these direct payments will be calculated to dairy producers. Stay tuned!

The Gap Between House and Senate New Stimulus Bill by Bob Gray

Well, there are a lot of differences in the thinking between the House and Senate on another Stimulus Bill. First of all, as stated earlier the Senate is in no hurry to move on another bill. They want to wait and see how effectively the funding has worked out in the bill passed in April.

Contentious points between the House and Senate over provisions in The Heroes Act include:

TRIP’s Report on Rural Roads by Mike Oscar

On Tuesday, May 12, 2020, TRIP, a national transportation research nonprofit, issued their report, “Rural Connections: Challenges and Opportunities in America’s Heartland,” highlighting that America’s rural transportation system is in need of repairs and modernization to support economic growth and improve traffic safety in the nation’s Heartland, but the U.S. faces a $211 billion backlog in funding for needed repairs and improvements to the rural transportation system. The report evaluates the safety and condition of the nation’s rural roads and bridges and finds that the nation’s rural transportation system is in need of immediate improvements to address deficient roads and bridges, high crash rates, and inadequate connectivity and capacity. Per TRIP, “the importance of the rural transportation system as the backbone of the nation’s energy, food and fiber supply chain has been heightened during the response to the COVID-19 pandemic. Addressing the nation’s rural transportation challenges will require a significant increase in investment, but the tremendous decrease in vehicle travel that has occurred due to the COVID-19 pandemic is estimated to reduce state transportation revenues by at least 30 percent, approximately $50 billion, over the next 18 months.”

The report found that the nation’s rural roads and bridges have significant deficiencies. Thirteen percent of U.S. rural roads are rated in poor condition, while 21 percent are in mediocre condition. Sixteen percent of the nation’s rural roads are in fair condition and the remaining 50 percent are in good condition. Eight percent of the nation’s rural bridges are rated in poor/structurally deficient condition, meaning there is significant deterioration to the major components of the bridge. Poor/structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including agricultural equipment, commercial trucks, school buses and emergency services vehicles. Forty-seven percent of rural bridges are rated fair. A fair rating indicates that a bridge’s structural elements are sound but minor deterioration has occurred to the bridge’s deck, substructure or superstructure. The remaining 45 percent of rural bridges are rated in good condition.

Per Zippy Duvall, president of the American Farm Bureau, “farmers and ranchers depend on rural roads, highways, and bridges to move their products to market. So does the integrity of our food supply chain. Unfortunately, due primarily to lack of investment over several decades, America’s infrastructure is in a dire state of rapid deterioration, and recent events show even more the importance of guaranteeing food arrives where it needs to be. Investment in rural infrastructure going forward is paramount to ensure farmers and ranchers can continue to reliably supply the safe and wholesome food Americans need into the future.”

Finally, the TRIP report found that traffic crashes and fatalities on rural non-Interstate roads are disproportionately high, occurring at a rate more than double that on all other roads. In 2018, non-Interstate rural roads had a traffic fatality rate of two deaths for every 100 million vehicle miles of travel, compared to a fatality rate on all other roads of 0.88 deaths per 100 million vehicle miles of travel. Rural roads are more likely to have narrow lanes, limited shoulders, sharp curves, exposed hazards, pavement drop-offs, steep slopes, and limited clear zones along roadsides.