Vermont is quickly providing $5 million in no- to low-interest loans to towns hit hard by recent floods, following a unanimous decision by high-ranking state officials on Tuesday.
The state’s Emergency Board, including Republican Gov. Phil Scott and four legislative budget committee chairs, met to discuss the updated revenue forecast. Despite a resilient economy, the state has faced consecutive natural disasters.
In March, lawmakers set aside millions in state funds for an Emergency Relief Assistance Fund, meant for quick distribution during natural disasters. This fund, initially $18 million, is now being accessed earlier than expected due to recent flooding.
Senate Appropriations Chair Jane Kitchel noted, “We were prescient and didn’t realize exactly what we were going to be confronting this soon.”
Less than three weeks ago, more flooding hit Vermont, exactly one year after last summer’s historic floods. Additional rain on Wednesday night caused flash flooding in parts of the Northeast Kingdom.
Gov. Scott remarked on the unpredictable nature of storm impacts, while leaders of flood-stricken municipalities reported a lack of funds for ongoing cleanup efforts. As a result, the Emergency Board unanimously agreed to allocate $5 million from the relief fund for loans to affected towns.
Vermont’s Chief Recovery Officer, Doug Farnham, mentioned that details, including potential interest rates on these loans, are still being finalized. The funds will likely be distributed on a first-come, first-serve basis to towns with severe damage, such as Plainfield and Barnet.
The Treasurer’s Office is also considering a loan program with the Vermont Bond Bank, similar to one from last year.
Farnham expressed concern about needing the Emergency Relief Assistance Fund so soon after last year’s floods. He highlighted the rapid succession of natural disasters and the need for long-term adaptation.
Despite the natural disasters, Vermont’s economy is performing well, according to state economists Jeff Carr and Tom Kavet. They reported low unemployment and healthy state revenues, although there are concerns about inflation and high interest rates.
Revenues for fiscal year 2024 were mostly on target, except for personal income tax and interest income, which exceeded predictions. However, revenues for the state’s education fund are expected to be slightly lower than planned, likely requiring a $1.2 million draw from the stabilization reserve to avoid a deficit.
Senior fiscal analyst Julia Richter noted potential additional funds for the Education Fund in the 2025 budget adjustment act.