Public Assets Institute > Policy Areas > Vermont Budget > Federal COVID aid helps, but it may not be enough to see Vermonters through

Federal COVID aid helps, but it may not be enough to see Vermonters through

During the first month of the pandemic, Congress scrambled to pass multiple aid packages aimed at helping states and individuals prepare for and respond to the crisis. But whether that will be enough to meet Vermonters’ needs is anyone’s guess.

The packages approved in Washington include increased unemployment benefits, limited paid leave, funds to hospitals and other medical providers, and one-time direct payments to low- and moderate-income individuals, as well as additional program dollars for child care subsidies, education, community development, and other priorities. To date, Vermont’s small businesses have taken more than $1 billion in Small Business Administration loans that may be forgiven if they keep their employees on payroll for the two months following receipt of the loan.

The biggest pot of funds to arrive in Montpelier was the $1.25 billion from the federal Coronavirus Relief Fund (CRF) targeted for state-funded services. But after a flurry of headlines and the deposit of the funds in state coffers, Vermont’s elected officials are still trying to figure out how the money can be spent. Washington’s mixed messages haven’t helped, but the latest guidance says the CRF may be used only for new programs and expenses related to COVID-19. These funds cannot be used to fill Vermont’s projected $500 million or more revenue shortfall over fiscal 2020, which ends on June 30, and fiscal 2021. That revenue is used to fund public education, public safety, the courts, highways, and all of the other ongoing state services that Vermonters depend on.

All told, Vermont is expecting $3.7 billion in aid from various federal streams. When the appropriated federal funds have all been distributed, Vermonters will have stimulus payments totaling $400 million to $500 million. The federal boost in unemployment compensation could amount to an additional $800 million, depending on how many of the more than 80,000 Vermonters seeking unemployment qualify.

It sounds like a huge amount of money. But will it be enough? In one year, Vermonters spend about $9.6 billion on food, housing, and energy needs—$800 million a month. We’re about to begin our third month of this pandemic, and it’s clear that reopening will be a long, gradual process.

In Montpelier, elected officials have agreed on a number of policies that could help. They are waiving work search requirements for unemployed workers, covering the cost of child care slots to keep providers in business, and supporting health care providers. But a lot is up in the air, including how to help essential workers, renters, property taxpayers, and higher education institutions.

Vermonters will likely need more aid than what’s already been committed. As the economic impact of the pandemic continues, the response from Washington and Montpelier needs to continue to be as robust as it has been so far.


Posted by Stephanie Yu on May 6, 2020 at 1:11 pm

One Response to “Federal COVID aid helps, but it may not be enough to see Vermonters through”

  1. Tim Swartz says:

    One idea I have heard from Lt. Gov. Zuckerman is to spend some of the $1.25 billion from the CRF grant to finally expand broadband service to the un-served and under-served populations. This seems to me to be a good investment, to help the students trying to learn via on-line classes, and the many people needing to work remotely. Helping to bridge the “digital divide” will reduce inequality, and also provide a basis for increases in digital businesses in VT.
    Beyond that, your summary makes clear that more federal aid will be needed to help the state make up for the income lost in this shut-down. I also hope that the legislature will pass some level of income-tax increase on higher-income Vermonters. It is time for the legislature to cross the Governor’s “line in the sand” against tax increases, recognizing the needs that must be met.