SETTING THE RECORD STRAIGHT
This week started with a confirmation vote in the Senate on Governor Phil Scott’s nominee for Secretary of Education, Zoie Saunders, who moved to Vermont recently from Florida to take the job. Since she was nominated last month Saunders has been criticized by many Democratic legislators for having limited experience in the public school system. For weeks senators had received a steady stream of input from educators, the Vermont National Educators Association (VT-NEA) and the public urging them to reject the nomination.
The vote happened first thing Tuesday morning, making it the first order of business for the week. There was tense anticipation in the statehouse as senators convened in the chamber. Last week the Senate Education committee voted to recommend Saunders’ confirmation by 3-2 vote. The two Republican Senators on the committee were joined by the Democratic chair to support Saunders. But by Tuesday it was clear the Democrats in the full Senate would for the most part oppose the nomination.
Governor Scott read the tea leaves and made a last minute request to delay the vote but the Senate moved forward. After lengthy floor speeches, some supportive of Saunders but most in opposition, the Senate voted to reject Saunders’ nomination for Secretary of Education by a vote of 19-9. Within 15 minutes of the vote Governor Scott issued a press release criticizing what he characterized as an “unfair and ill-informed” effort to sink her nomination. He also announced the appointment of Saunders as interim Secretary of Education. The governor has the authority to appoint interim positions to fill vacancies without Senate approval. It was a rebuke of the action just taken in the Senate, although not many in the statehouse seemed very surprised by the move.
It is unclear whether the governor will re-nominate Saunders as Secretary of Education.
FY2025 BUDGET
The conference committee on H.883, the FY2025 budget met extensively this week and made significant progress in finalizing the annual spending bill. Large questions remain about the more controversial funding and revenue proposals but the progress in the conference committee combined with the warm spring weather gave the impression adjournment may be possible next week.
In the context of the budget negotiations, Secretary of Administration Kristin Clouser submitted a letter to the conference committee making recommendations on how to finalize the budget without raising taxes. Clouser emphasized strong revenues throughout the first four months of the year and said lawmakers can leverage these revenues to balance the budget and buy down property taxes, which are projected to increase an average of 20 percent if the legislature fails to act on it. Clouser also urged legislators to reject a proposal to tax streaming services, which would be applied directly to consumers, saying the revenue is unnecessary given the state’s strong economic position.
The H.883 committee of conference appears on track to finish work in time to meet the May 10 adjournment date. It is less clear if lawmakers will be able to agree on other tax and spending proposals in other bills before that deadline. The major outstanding question for budget conferees and members of the tax committees is whether to spend scarce dollars to support the General Assistance Emergency Housing Program or use those dollars to buy down property tax rates. More on property taxes below.
DATA PRIVACY
Last Friday, the House Commerce and Economic Development Committee orchestrated a committee hearing featuring lawmakers from various states who have authored data privacy legislation. The goal of the hearing appeared to be to challenge the integrity of local businesses and business associations by portraying them as mere proxies for big tech, particularly criticizing their comprehension of the bill’s implications like the Private Right of Action (PRA). Maine Representative Maggie O’Neil claimed that L.L. Bean was one such business, opposing provisions in Maine due to the company’s alleged collusion with big tech. In response, L.L. Bean sent a pointed letter to the Vermont House Commerce Committee and to Representative O’Neil strongly rejecting her accusations and emphasizing their proactive approach to privacy laws, which predates the legislation in question.
L.L. Bean refuted claims of acting as a spokesperson for the tech industry, explained their participation in legislative processes was based on their own business experiences and expressed disappointment over the misrepresentations of their stance. L.L. Bean also highlighted the importance of not dismissing the legitimacy and contributions of Vermont businesses, cautioning against the assumption that engagement with the legislature indicates serving out-of-state interests.
“I would urge you not to assume that just because a local business engages with the Legislature on data privacy, it must be a ‘spokesperson’ for out of state interests. Indeed, it is ironic that Rep. O’Neil would accuse L.L.Bean of being beholden to such interests. On at least one occasion, in response to questioning from Committee members about particular aspects of her bill, Rep. O’Neil publicly stated that she would need to defer the question to the representative of Washington D.C.-based interest group, EPIC, since it was EPIC that had crafted that language in her bill. For example, on January 9, 2024, Representative O’Neil responded to the Committee, ‘I don’t know. I would want to know why it had been written that way… Caitriona [Fitzgerald, EPIC representative] do you have any comment about how it was written? Was it the language that Congress used?’” – Excerpt from May 2, 2024 letter authored by Michael K. Mahoney, Chief Legal and Compliance Officer, L.L. Bean. Read the full letter here.
This letter arrives at a critical moment as the Senate prepares to vote on H.121, a sweeping data privacy bill. The version of the bill endorsed by the Senate Economic Development Committee notably excludes the PRA, a point of contention that the House continues to staunchly support. Despite vocal concerns from local businesses about the implications of including the PRA, the House has not wavered on its position. The outcome of this legislative disagreement is still uncertain.
YIELD BILL
The Senate Finance Committee worked late on Thursday to come up with a proposal to reduce the projected double digit property tax increase necessary to pay for school spending. Education property tax rates are set using the annual “yield bill”, which was passed by the House at the end of April. The House proposal, among other things, would raise $27 million in new revenue by taxing “cloud services” and applying a surcharge to short-term-rentals.
Thursday evening a revised proposal took shape in the Finance Committee. Senators discussed a revised revenue package designed to buy down the property tax increase. While the Finance Committee has not yet approved a package, the list included raiding state reserves ($20 million), a narrower version of the cloud tax ($12 million), a surcharge on short-term-rentals ($6.5 million), applying the sales tax to clothing over $110 ($6.8 million), and using $25 million from projected general fund revenue growth. At the time of this writing the Finance Committee has not reconvened to review the package they tentatively agreed to on Thursday.
