It has been a very busy and expensive few weeks in Montpelier. Many major bills were pushed through crossover, many were left behind on the wall, and millions of new spending initiatives; some unfunded; have been passed on to the Senate. This is a pretty extensive update and we’ve done our best to capture it all.
Housing and Act 250 Reform
Earlier in the session, 30% of the House came together to propose a tri-partisan housing bill. It was hailed at a press conference with Governor Scott, and that was the last time it saw the light of day. It was sent to the House Energy and Environment Committee where they Gorilla Glued the bill to the wall, opting to create a committee bill of their own. H.687 is a land use bill that, proponents say, begins to address the Act 250 hurdles in this state.
It does the opposite. The tiered system will make it more difficult for rural Vermont. Nearly 98% of Vermont towns will fall into what’s called “Tier 3,” and towns will have to go through a new process to become eligible for the more friendly tiers. The problem is those tiers require extensive water and sewer capabilities; something a majority of Vermont does not have. The legislation also requires extensively trained staff; something many communities lack.
Another important point to the legislation, Rep. Anne Donohue of Northfield was vocal on the floor. Here’s is an excerpt from her legislative update:
“The most bizarre aspect of the new bill is that the Board that sets the standards is the same body that would hear appeals of permit denials based on those standards. That part of the bill drew an amendment from a tri-partisan group of legislators (including me); bill supporters opposed it saying it would “gut the bill” of its intended process. It failed on an 89-53 vote, splitting the majority party to a virtually unheard-of degree, with 14 Democrats supporting the amendment. Most of them later voted against the bill itself.”
I will continue to champion housing reform -- and a predictable legislative process -- but it's all too clear what’s happening in Montpelier. The opinions of a few and a handful of special interest groups are controlling the conversation. We can only hope the Vermont Senate comes to the table and attaches most, if not all of S.311 (the “Be Home Bill”) to H.687. I will be watching very closely and will keep you posted.
Another “Housing Bill” passed the House that spends in excess of $900 million over the next ten years. This bill, H.829, is something I have spoken out against in the past. There are many wonderful programs in the bill that I do support, however, we do not have the money. This will be passed onto the backs of taxpayers - in addition to the skyrocketing property tax increase.
Additionally, the “Big Bill (aka the Budget) slashed funding to VHIP, an incredibly successful and efficient program that puts inventory on the market. Because of this, the program will end in January of 2025. I was passionate on the floor about the contradiction Montpelier was making; attempting to throw more money at the housing crisis but cutting the most effective programs.
This bill passed and is on to the Senate as well.
Education Funding
I’m going to source the Vermont Chamber of Commerce who did a marvelous job outlining the taxes the Vermont House passed. 30 districts rejected their school budgets this year; voters clearly wanting to send a message to Montpelier. I certainly heard and agree, something has to be done. However, our local school districts are not the problem. Montpelier is not addressing the funding crisis; they are exacerbating it. Rules, regulations, and funding gaps make it difficult for our hardworking school boards to balance the needs of our children and the financial implications of budgets. We need to find solutions to support our children. They are the foundation to our future.
“Tax increases topping $125 million hit the House floor this week amid ongoing tension on increased state spending in the absence of pandemic-era federal funding. Despite the significant new proposed revenue for the state, none of it would alleviate the $230 million education fund deficit that is slated to increase property taxes by 18%. While the bills housing these taxes all passed, there was notable vocal dissent from legislators on the floor about how the money would be allocated and the long-term impact on the Vermont economy.
As noted by Rep. Scott Beck (R-St. Johnsbury): “In the last 10 years, personal income tax receipts in the state of Vermont have grown 54%, sales tax receipts have grown 65% and property taxes have increased by 53%. Corporate income tax has nearly tripled in the last 10 years.”
Tax increases passed by the House include:
$15.3 million – Increase in the Global Intangible Low Tax Income (GILTI) and Foreign Derived Intangible Income (FDII) taxes to increase the amount of revenue from foreign corporations doing business in Vermont. Giving Vermont the highest GILTI and FDII tax rates in the country.
$17.7 million – Increase in the top marginal tax rate of corporate income tax from 8.5% to 10% giving Vermont the highest corporate tax rate in the country.
$74.9 million – New personal income tax bracket of 11.75% starting at $500,000 of income per tax flier, including.
$17.5 million – Property transfer tax increase from 1.25% to 3.25% for transfer values greater than $750,000. This tripling of costs will likely harm the ability to attract new and scaling employers in purchasing industrial space for expansion.
We know the House isn’t done there. As the focus now shifts to the education fund, we are expecting to see taxes proposed regarding cloud internet services and software as a service. Legislators need to hear from you about your concerns. Please contact your Representatives and Senators.”
Committee Update
Once again, my committee in the House; the General & Housing Committee is refusing to discuss housing reform. Directed by Leadership for the remainder of the session, we will be discussing labor issues. Specifically, a constitutional amendment enshrining the rights of workers to unionize. With all the talk of shelters, the housing crisis, taxes, and strains on local budgets; I still feel the priorities of my committee are misguided.
As always please reach out, both Rep. Carolyn Branagan and I want to hear from you! We can be reached at abartley@leg.state.vt.us or cbranagan@leg.state.vt.us!