Economic Recovery Grants less than anticipated for anxious business owners

Economic Recovery Grants

Latest Update 5.7.21
The Senate is poised to pass limiting language for further recovery grants for businesses in H.159.¬† As with the bridge grants for “gap” businesses, to be eligible a business will need to demonstrate a 2020 tax loss. The Senate Economic Development Committee considered the grant formula this week. Senator Clarkson (D-Windsor) and Senator Ram (D-Chittenden) wanted more targeted and increased funding for lodging and wedding, and events business sectors since they were the hardest hit. Senator Sirotkin (D-Chittenden) said this could be considered in the conference committee.

There is more than $500 million in unmet need since the government’s enforced curtailment of business activities, and the Senate has only allocated $20 million for recovery grants. The health of Vermont’s hospitality sector now lies with decisions that the House will make.

Update 4.30.21
The governor announced that his administration has determined $500 million in unmet need and yet only proposed $50 million for a new round of grants. The Senate Economic Development Committee recommended using $20 million this year and $20 million next year. Senate Appropriations has decreased this to just $20 million this year.

The Senate Economic Development Committee heard from business leaders from the Vermont Lodging Association, Vermont Association of Wedding Professionals, Lake Champlain Chamber, and the Vermont State Chamber. These people highlighted the need for additional funding and shared their suggestions for criteria for these grants that would include six months of fixed costs with a $300 million cap. Senators will have further discussions in the coming days to determine how best to allocate funds.

Update 4.26.21

Watch the economic relief grant discussion in the Senate Appropriations Committee starting at minute 46:00

https://www.youtube.com/watch?v=s5eltk4XVUs

Original Post: 

The business community expressed collective disappointment two weeks ago when Gov. Scott announced $50 million for the next round of economic recovery grants. Given the severe impact from state-forced shutdowns and no support grants since the end of September, they were expecting more aid to cover their revenue gap for the last six months.

Economic Development Commissioner Joan Goldstein told the Senate Economic Development Committee that there is more than $500 million in unmet need for these businesses. The Agency of Commerce and Community Development took into account that many companies were eligible for additional Payroll Protection Act grants which total $400 million and many may qualify for federal grants for restaurant and shuttered events. If ACCD finds the program is oversubscribed, they hope to transfer funds from undersubscribed allocations as they did in the last round of grant distribution.

The formula will be different in this process. Grants would cover three months of fixed costs, capped at $150,000 and processed on a first-come, first-served basis.  Businesses will have to have been closed or had capacity restrictions imposed. Given that businesses were forced to significantly decrease their revenue for the past year, and Vermont received an enormous amount of funds through the American Rescue Plan, many believe that this final allocation of support is woefully inadequate. Reopening faces its own challenges, including amassed debt, workforce shortages, and deferred maintenance.