CROSSING OVER
Crossover week was turbulent as committees scrambled to finalize their priority bills and pass them by the end of the week. Budget pressures are the overarching theme of the 2024 legislative session, a point that crossover week has painfully illuminated. Governor Phil Scott signed H.839, the FY2024 Budget Adjustment Act (BAA), but while doing so he emphasized that it increases his initial BAA proposal by $15 million. He urged lawmakers to offset that increase in the FY2025 budget without raising taxes.
The governor has consistently warned lawmakers to curtail spending, saying taxpayers cannot maintain the budgets that were boosted by federal pandemic support. He underlined this message by vocalizing his concerns over nearly a third of school budget votes failing on Town Meeting Day.
Democrats in the legislature are also concerned about spending levels, and fully recognize the budget needs to be crafted without the support of pandemic-era federal stimulus. This translated into difficult decisions in many policy committees, as they worked to prioritize programs and forgo a number of initiatives Democrats support but are hard pressed to fund.
While the governor remains steadfast in his opposition to raising taxes and fees to address the tight budget challenges, House and Senate Democrats continue to explore raising taxes as an option to balance the budget. The Senate Finance Committee approved a bill that would impose a five-percent excise tax on streaming services. These services are already subject to the state’s six-percent sales tax, and the one-percent local options tax in municipalities that impose it. S.181 was initially aimed at supporting the public access television stations but is now geared toward shoring up the general fund. In the House, the Environment and Energy Committee approved H.657 this week. H.657 would impose a number of different taxes on the telecommunications industry and is now being reviewed in the House Appropriations Committee. The legislature is also expected to continue considering a variety of potential tax increases including the cloud tax and other corporate taxes.
Next week is expected to be as dynamic if not more than this week, as the “money bills” and most notably the FY2025 budget will be due to pass out of committee.
VAPE
After a lengthy floor debate on Thursday evening, the House advanced S.18, a bill banning the sale of flavored vape products. The bill, which passed on a vote of 83-53, aims to curb underage vaping by restricting access to flavored e-cigarettes and menthol cigarettes. Proponents argue that flavored vapes have contributed to the widespread appeal among young people, leading to addiction and other health concerns. Critics voiced multiple concerns, including the economic impact on small businesses reliant on vape sales.
H.121
On Friday afternoon the House Commerce and Economic Development Committee voted 11-0 to advance H.121, an omnibus data privacy bill. H.121 includes a Private Right of Action (PRA), a provision that has sparked controversy. Vermont businesses, local technology firms and national corporations have been raising alarms over this measure for years. They have cautioned lawmakers that it will likely trigger an increase in litigation, placing a disproportionate burden on small businesses. This has been borne out in other states that have PRAs for data privacy, like Illinois.
In a last-minute move, the committee decided to provide broad exemptions to banks and insurance companies. Some members of the committee voiced strong objections to this approach, arguing that it would water down the effectiveness of the bill. While the committee had expressed their intent to model H.121 on other state laws, the version approved by the committee is a hodgepodge of definitions, regulations and requirements from a variety of states, and is likely to cause confusion among an array of entities impacted by the bill. If enacted, H.121 will set Vermont apart from the approach taken by other states in the region, including New Hampshire and Connecticut.