Vermont lawmakers on Tuesday boosted by $11.5 million a grant program for businesses struggling in the pandemic, despite expressing disappointment that the money couldn't be better targeted toward hard-hit sectors like small retailers.
The infusion of additional federal relief funds into the state’s Expanded Economic Recovery Grants program will increase the average size of the awards that eligible businesses receive by about $6,000.
The extra funding brings the size of the current program, which caps grants at $300,000, to about $164 million. That’s on top of an earlier $152 million grant program announced in July.
The total funding, from the state's $1.25 billion in federal CARES Act money, is still far from the more than $700 million needed to make whole the many businesses hammered by the pandemic, said Joan Goldstein, commissioner of the state Department of Economic Development.
“We know the unmet need is humongous,” Goldstein said.
The initial $76 million allocated to the program would have only provided 33 percent of what businesses sought. In November, lawmakers approved an additional $75 million to ensure that parts of the hospitality sector received 100 percent of what they qualified for. The latest infusion will boost the percentage for all other businesses to about 41 percent of their need, Goldstein said.
Lawmakers on the influential Joint Fiscal Committee had rejected a similar $10 million request on December 9 over equity concerns.
At the time, they expressed hope the additional funds could be targeted to small retailers and businesses that depend on the hospitality industry — such as caterers and wedding photographers.
With checks due to go out Thursday, Goldstein said there just wasn’t enough time for the last-minute tweak to the funding formula that lawmakers sought.
“It’s too much coding to get done in such a compressed timeframe,” Goldstein told lawmakers. “That’s why we’re concerned about the risk of failing or screwing it up.”
Senate President Pro Tempore Tim Ashe (D/P-Chittenden) seemed skeptical of the explanation and noted that some industries had been able to get eligibility tweaked in their favor.
“One industry in particular hired lobbying firms to work on getting amplified grants,” Ashe said. “I hope at the end of the day, the lesson isn’t that every group that wants to get at the table has to hire a Montpelier based lobbying firm.”
Ashe later declined an interview request from Seven Days.
Patti Komline, a lobbyist and a former lawmaker, acknowledged to Seven Days that she had helped organize a campaign that enabled members of multiple business groups — including three chambers of commerce and lodging property owners — to speak via private Zoom calls with members of the Joint Fiscal Committee before the decision to steer $75 million to hospitality groups.
Business owners told lawmakers how the pandemic was affecting them, and she was happy to ensure their voices were heard, Komline said. "Helping these small businesses through this is some of the most rewarding work I've done," Komline said.
Lawmakers ultimately expressed support for treating hotels, restaurants and other hospitality businesses more generously due to the impact of travel restrictions and a concern for the state's long-term economic health as a tourist destination.
“I don’t think we like it, but in politics the voices get attention,” Goldstein said. “Rightly or wrongly, I think that is a fact. That is the nature of advocacy.”
Had small retailers succeeded in getting their own carve-out this time, that would have left less money for hair salons, arts organization and recreational businesses, Goldstein said.
She rejected the suggestion, however, that somehow small businesses were getting left out in the cold. The average size of the latest round of grants is expected to be $37,000, with most going to sole proprietors and businesses with fewer than four employees, she said.
Even so, Rep. Janet Ancel (D-Calais) said she hoped grant programs will be administered in a more targeted manner. "I think it would be good to design an application in such a way that we’re able to do more sorting in the future," she said.
Goldstein said the CARE Act money needs to be spent by the end of the year, and the latest increase effectively exhausts the funds for the program until another federal stimulus package is approved.
Disclosure: Tim Ashe is the domestic partner of Seven Days publisher and coeditor Paula Routly. Find our conflict-of-interest policy here: sevendaysvt.com/disclosure.