Gov. Phil Scott's administration on Tuesday announced plans for how to spend more than $1 billion in federal pandemic relief, with housing, broadband, climate change mitigation and economic development programs all slated for massive spending infusions.

Vermont is receiving $1.03 billion from the American Recovery Plan Act, or ARPA. The state has until December 2024 to allocate the massive pot of money.
The administration plans to present its plan to lawmakers in this legislative session, although the spending would be distributed over the next few years, "with needed adjustments on the way," said Administration Secretary Susanne Young.

The proposal calls for the state to spend $250.5 million to improve broadband in underserved rural areas. Of that, $225 million would be allocated as grants to Communications Union Districts, the governor’s office said.

Another $200 million is proposed for climate change mitigation and adaptation, including $25 million to add to Vermont’s existing 292 public electric vehicle charging stations. More than $20 million would go to improve energy efficiency in buildings and provide incentives for consumers to buy energy-efficient electric equipment for heating, cooling and transportation.

The administration also proposes to spend $250 million to create 5,000 units of housing, addressing a critical shortage that is seen as a contributor to rising home prices in Vermont. Housing has been a major economic development priority in the legislature for the last few years; employers have said they can’t find workers because prices are too high.

The money would be used to increase the capacity of emergency shelters, build new permanent multi-family housing, and pay for mixed-income rentals, manufactured homes, and farmworker housing, said Housing Commissioner Josh Hanford.

Chris Donnelly, director of community relations for the Champlain Housing Trust, said he was pleasantly surprised at the size of the proposal.

“It’s quite a demonstration of priority that we share,” said Donnelly. He noted 2,000 Vermont families are living in motels. “It’s going to make a huge difference,” he said. “People will hopefully have more choices about where they can live. And if we can move people out of motels and into permanent housing, that should be a moral imperative.”

Rep. Laura Sibilia (I-Dover), a longtime proponent of broadband expansion, also said she liked what she saw. “I was kind of holding my breath” before seeing the administration’s plan, she said.  “I was really pleased to see that we continue to kind of be moving along conceptually in the same way.”

Also on the list: $143 million for economic development and recovery. That includes $50 million in business grants, a number that disappointed business advocates who have said the unmet need is closer to $400 million. The state gave out $340 million in grants to businesses last year to help them stay afloat in the face of COVID-19 closures.

“If you’re [in] lodging, you’ve been pretty much shut down by virtue of the travel guidance for the longest time now, and restaurants have not been operating at full capacity,” said Austin Davis, government affairs manager for the Lake Champlain Chamber. “It’s difficult for these folks. There’s a lot of pain across the state.”

The overall economic development package is designed to incentivize business growth, said Commerce Secretary Lindsay Kurrle. She said the administration has been working with lawmakers for the last four months to come up with a program that will direct aid to businesses that aren’t eligible or federal relief such as the Paycheck Protection Program.

About $25 million would create a statewide hazard mitigation program targeted to low-income communities that repeatedly suffer losses from climate-related emergencies such as flooding. And another $100 million would support implementation of Vermont’s climate action plan.

The administration also included $170 million to develop and improve water and sewer infrastructure, saying that there are several areas of the state where work in these areas is long overdue.

“Projects can range in size from serving a small number of properties to connecting a whole village,” the administration said in prepared materials.

Brian Shupe, executive director of the Vermont Natural Resources Council, questioned a measure to exempt development projects from Act 250 land use regulation.

“We appreciate that the governor is prioritizing climate change, clean water and affordable housing in the use of the money,” said Shupe. “We applaud that, and share those priorities.” But “we have four years to roll out this spending plan, and it shouldn’t come at the expense of our environmental standards.”

Administration officials have said exempting ARPA-funded projects from Act 250 would help developers meet the timeline set by the federal government for use of the relief money. ARPA projects in designated downtowns, village centers, new town centers, neighborhood designated areas, and existing industrial parks would be exempt from that environmental review, as would state bridge replacement and road projects.

Developers often point to Act 250 as the primary reason for project delays and added expense.

“Development is occurring at a pretty rapid pace in the state now,” with Act 250 in place, Shupe said. “If I were a private developer I would ask, ‘Why does this set of projects get priority over mine?”

Darren Drevik, who co-owns the Phineas Swann Inn and Spa, says he pays $500 in state fees each year to offer 10 rooms and serve meals. He’d like short-term rentals to do the same, and he’s hoping a bill that's headed to the House will make that happen.

The Senate on Tuesday approved S.79, a wide-ranging bill that aims to improve enforcement of health and safety standards for apartments around the state. The measure would include short-term rentals such as Vrbo and Airbnb in that registry. Owners of conventional lodging have said for years they’re competing on an uneven playing field.

Drevik noted that when the state shut down all inns, hotels and B&Bs last year because of the pandemic, it had no way of knowing who was operating an Airbnb.

“We had state troopers literally coming to our door and checking to make sure that there were no cars in our parking lot from out of state and no guests in our inn,” said Drevik. “And then we had short-term rentals in my town with cars from New York and Massachusetts.”

It seems everyone has an anecdote lately about Vermonters returning to their home state or newcomers moving in. Housing is scarce in some parts of the state.

But the Senate Committee on Economic Development, Housing and General Affairs isn’t taking any chances when it comes to attracting new residents. This year, it’s seeking to make its popular move-to-Vermont incentives permanent.

The panel has proposed a $1 million program that would reimburse a worker who is new to the state $5,000 for moving expenses. That amount would rise to $7,500 for someone who moves to an area with a higher-than-average unemployment rate or lower-than-average annual wages.

Vermont’s popular remote worker program garnered international headlines when it debuted in 2018 offering a $10,000 moving reimbursement for any new resident who would work remotely. Its success shows that these programs should continue, said Sen. Randy Brock (R-Franklin), a supporter of the bill. He sees the new measure, which would combine two earlier versions, as something similar to the business incentive programs that are used to lure companies.

“There are some states in the South literally spending hundreds of thousands of dollars per job to bring in auto plants and other things,” said Brock. “These are situations a state like Vermont can’t afford.”

Anticipating that workers will be in short supply this summer,  Vermont Tent Company CEO Michael Lubas is making some changes.

Lubas has raised pay about 25 percent this year; starting wages are $15 to $20 per hour. Although he prefers to have a full-time workforce, he’s also offering flexible, part-time hours. His company's summertime business typically involves weddings and special events.

In the past, “we didn’t hire a lot of part-time people unless we had to,” said Lubas. “Now we’re open to hiring almost anybody if they are good employees. We’ll take them if they want to work two days a week, or part-time every day. The bottom line is, we’re just looking for good employees who will show up when they are supposed to.”

Vermont employers were talking about a worker shortage long before the COVID-19 pandemic upended the economy. But a year after it began, the pandemic is still having a big impact on employment. While the state Department of Labor usually has 6,000 to 8,000 people receiving benefits at its busiest period, in winter, this past January 35,000 people were receiving benefits, according to the department.