SO CLOSE YET SO FAR
The Vermont legislature entered Week 16 of the session eyeing a May 10 adjournment date. The Senate approved its version of the FY2025 budget this week, and a number of key policy bills either passed out of committee or are very close to being finalized. Outside the statehouse, signs of spring were breaking through.
While the legislative calendar and (slightly) warmer temps give a sense that the end of the session is near, there are numerous differences to be reconciled between the House and Senate before they can adjourn in May. Discrepancies between key spending and tax proposals—such as the House’s proposal to increase the corporate income tax and the Senate’s proposal to tax Vermonters’ video streaming services—along with Medicaid expansion and plans to bolster the Judicial Branch, are just a few issues that the two chambers will need to resolve.
On Wednesday, the Senate passed H.883, the FY2025 budget by a vote of 26-2. The Senate-passed budget includes appropriations to bolster mental health services, support vulnerable populations and clear the backlog of court cases in Vermont’s Judiciary which were heavily exacerbated by the COVID-19 pandemic. The House included similar priorities in their version of the FY2025 budget, but funding levels between the two chambers differ. On Friday the House and the Senate named their appointees to a committee of conference to reconcile the two chamber’s respective budgets. Conferees from the House are: Representatives Lanpher (D-Vergennes), Scheu (D-Middlebury) and Wood (D-Waterbury). The Senate appointed Senators Kitchel (D-Caledonia), Perchlik (D/P-Washington) and Westman (R-Lamoille).
When lawmakers reconvened in January, Governor Phil Scott and legislative leaders declared that housing would be a top priority during the 2024 legislative session, but proposals vary between the legislature and governor, and even between the House and Senate. Fewer federal funds are available than in recent years to invest in affordable housing, leading to challenging conversations about how to address the state’s housing challenges. The Senate’s budget proposal includes a cap on the motel temporary shelter program, which became a flashpoint at the end of the 2023 legislative session when legislators voted to eliminate it but faced significant backlash and ultimately approved an extension. Housing regulation and permit reform were top priorities for Governor Scott, but as the session reaches the home stretch it appears unlikely these proposals will move forward.
With two weeks remaining (officially) in the 2024 legislative session, the House and Senate have a lot of negotiating to do.
YEILD BILL
On Wednesday the House debated and passed the annual Yield Bill, typically a routine piece of legislation meant to adjust tax rates to meet educational expenses based on local school districts’ spending decisions. But this year’s bill was marked by significant changes due to statewide increases in property taxes resulting in the failure of many school budgets across the state.
In response to these challenges, the House Ways and Means Committee incorporated several unconventional measures such as applying the sales tax to cloud-based software and a 1.5 percent surcharge on short-term rentals. The bill sets a 15 percent increase for homestead tax rates and an 18 percent increase for non-homestead tax rates. Additionally, the bill establishes the ‘Commission on the Future of Public Education’ to evaluate and potentially reform Vermont’s education funding system.
The full House took up the bill on Wednesday and after a lengthy debate passed it by a vote of 101-39. Democratic leadership has lauded the bill as a necessary step in school funding reform, while Republicans have expressed concerns that it redistributes tax burdens and raises new revenue to buy down rates without sufficiently achieving fiscal reform or spending control.
DATA PRIVACY
Want to slow down the economy and kill jobs? This bill will do that. That was the message delivered to the House Commerce and Economic Development Committee on Friday by Jim Hall, CEO of Vermont Country Store. Hall was joined by Rob Bean from Orvis, another major Vermont business, in raising concerns about the House’s version of H.121, a data privacy bill. House members have argued that H.121 is modeled on Connecticut’s privacy law, with improvements that Connecticut lawmakers could not get consensus on. Hall, who offered unqualified support for Connecticut’s approach, even saying he believed it should be adopted as a national standard, argued that Connecticut didn’t include problematic provisions “because it was bad policy.”
SENATE CHANGES
For those keeping track, the number of announced retirements in the Senate is now at three. This week Senator Bobby Starr (D-Orleans) announced that he will not be seeking reelection after this session, closing out a 46-year tenure in the Vermont legislature. Senator Dick McCormack (D-Windsor) announced he would retire at the end of this session as well. And due to health reasons, Senator Dick Mazza (D-Grand Isle) retired this year, leaving a vacant seat to be appointed by the governor. At the beginning of the week longtime Caledonia County Senator and chair of the Senate Appropriations committee Jane Kitchel (D-Caledonia) was elected by her peers to the Senate Committee on Committees. The Committee on Committees appoints Senators to committees and makes other decisions that affect the work in the Senate. Senator Kitchel was elected when the seat was vacated by former Senator Dick Mazza.