NETFLIX AND CHILL
There were lengthy floor debates in the House and Senate this week. The House stayed for multiple late-night sessions to clear bills that piled up after the crossover deadline. On Wednesday the House spent more than six hours on one bill – H.687, which would modify the state’s development, permitting and environmental laws. The House approved proposals to increase the corporate tax rate, create a new top marginal income tax bracket for high earners, increase the property transfer tax, change certain communications taxes, increase fees on securities and investment products and eliminate certain tax deductions. All told, these changes account for almost $150 million in new taxes. By Friday afternoon the legislature had passed H.883, the FY2025 Budget Act or “Big Bill” as it is unofficially known.
Governor Phil Scott heavily criticized legislators for the proposed tax increases, noting the new tax proposals would stack on top of large property tax increases and a new payroll tax for childcare that will go into effect this summer. Republican lawmakers echoed his concerns throughout the week on the floor and in the press.
STREAMING TAX
The Senate passed S.181 this week, a bill initially intended to tax entities that attach communications equipment to utility poles. The bill was amended by the Senate Finance Committee to tax streaming services like Netflix, Amazon and Peacock. Before approving the bill, the Senate Finance Committee struck a provision that would have prohibited streaming companies from telling their customers that they are being taxed. The bill is intended to, in part, fund public access stations that already receive almost $8 million annually from fees assessed on customers of cable companies. Separately the FY2025 House budget proposal includes $1 million in General Fund dollars to support Vermont’s public access stations. The streaming tax is expected to raise an additional $5-7 million annually from Vermonters who subscribe to streaming services.
ETHICS BILL
On Friday, the House debated a bill that would make candidate financial disclosures more robust, in part by requiring disclosure of investments in publicly traded assets. H.875 would also establish a uniform municipal code of ethics for cities and towns that don’t have their own code of ethics. Supporters of the bill argued it would prevent corruption and expose conflicts of interest. Opponents argued it is state government overreach, particularly in requiring cities and towns to comply with a uniform code of ethics.
PCBs
On Thursday the House passed H.873, a bill related to polychlorinated biphenyl (PCB) testing and remediation in schools. The bill includes a provision to pause the testing program when funds dip below $4 million, and other provisions that seek to hold manufacturers accountable for costs. The House is trying to find a solution to a lack of funds to test for PCBs and remediate schools.
The closure and subsequent decision to demolish the Burlington High School and Tech Center due to PCB contamination has driven this conversation for multiple legislative sessions. Initially, the school’s contamination levels prompted concern under one set of state guidelines. While the State later revised these PCB action levels to be less restrictive, this revision came after the school had already been shuttered and after significant decisions had been made based on the original standards. Ultimately, this came with a price tag to local taxpayers of over $200 million to tear down and build a new high school and tech center. Even after the revision, Vermont has some of the nation’s most stringent action levels for PCBs, significantly below the thresholds set by the federal government.
Last year, the Senate rejected attempts by the House to pause the PCB testing program. It remains to be seen how the Senate will respond to this more nuanced approach to pausing the program. The Senate will likely take this bill up next week. The governor has indicated that he is willing to entertain the pause.