Legislative Update
Rep. Anne Donahue
April 14, 2024
I was all ready to rant and rave in this week’s update, until I found out that,
a) the news media had exaggerated the status of a proposed bill and,
b) major parts of the preliminary draft had already been put on hold.
We are not going to pop a new education funding system into place with three days of committee review.
It may come as a surprise to know how often legislators must rely on the same news broadcasts the public gets. There are 11 Senate committees and 13 House committees, so keeping track of what they are doing prior to a bill being voted out and reaching the floor is nigh impossible. When a constituent writes to ask about the status of a bill, I can always catch a colleague to find out what’s happening within their committee. I usually also skim the weekly calendar for all committees to get a sense of what they are working on. But that’s a far cry from actually knowing details.
There have been rumors about development of a new education funding formula ever since the catastrophe that struck this year with soaring budgets and voter rejections. But obviously doing that is not a three-day job. Even after much longer work on some revisions last year, one part of the crisis this year came about as a result of unintended/unforeseen consequences of those changes.
What actually happened in the Ways and Means Committee this past week is that a number of ideas that have been under discussion for weeks were put into a draft in order to see what concrete language would look like. That doesn’t mean that there was an actual bill yet that was proposing those ideas. But the draft certainly lit a firestorm. To clear the air, the committee chair publicly clarified that none of the long-term system changes are on the table for this year. There is not enough time left in the current session to do due diligence on major changes.
That would have been my rant; now instead I’m letting you know you can ignore the reports. There is now an actual draft bill which, as of Friday, proposes some interim ways to ease this year’s homestead property tax increase by several new taxes and shifts among tax sources. Some of those will be controversial. I’ll mention them without opining at length, since they may or may not remain in the bill by the time it reaches the floor next week:
~Add what is called a “cloud tax,” applying the sales tax to software you purchase and access over the internet. That would raise a projected $20 million annually.
~Add a 1.5 percent surcharge for a “short-term rental impact” tax that would raise about $6.5 million. (A 10% surcharge, raising $24 million, has also been considered.) The majority of those rentals are AirBnBs that homeowners use to raise some added income.
~Increase property tax credits for one year by 15 percent to further reduce the homeowner tax burden for those at $90,000 income or less, who pay in part or fully based upon income rather than house value.
~Increase the higher, separate non-homestead property tax (rental property, business and second homes, most owned by Vermonters and some passed down to renters) to reduce the homeowner rate.
A reminder of where the money comes from currently to pay the $2.3 billion Ed Fund, in rough percentages:
~non-homestead property tax, 38% (40% minus 2% in current use land exemption);
~homestead property tax, 27% (34% minus 7% in property tax credits);
~sales tax, 26%;
~one quarter of rooms and meals tax, 2.6%;
~one third of purchase and use tax (vehicles), 2%;
~lottery, $1.5%; then smaller miscellaneous items.
The long-term proposal that drew such consternation before it was taken off the table for now was to develop a statewide tax that would be used to provide all school districts a base payment per student. The payment would be based on an analysis of what an “adequate education” costs in Vermont. Voters would only consider any added local spending in excess of that base, thus taking most of the local decision-making power away from voters. It would recognize that current local budget votes end up imposing costs on everyone else, and thrifty budgets hardly reduce a local tax burden at all.
The current draft bill turns that proposal into a task force study for a report back next year.
***
Back to the general fund budget: the Senate is working to finalize its response to the House, and is taking a much more conservative course, pushing back on some of the major new tax and spending bills that the House passed.
There was an interesting comment by Sen. Jane Kitchel, the Chair of the Senate Appropriation Committee, as reported by VT Digger. She said the budget is where new positions and revenue sources should end up, rather than through individual policy bills, as the House sent over. “We’re going to be building our budget the way we always do — so some of these bills that the House passed will end up being incorporated into the budget,” she was quoted as saying.
It caught my eye because that was what I argued for on the House floor: that we were being deceptive by passing an alleged budget that put some major new expenditures and the taxes to pay for them into separate bills, rather than including them as part of a full budget.
Most other major bills that worked their way through House or Senate are also now being vetted by the opposite body; they will either be accepted, die, or most likely come back with proposed revisions (minor or major.)
If the changes aren’t acceptable, appointed conference committees of three Senators and three Representatives get to hash it out to seek compromise. This is the end-of-session process that gets highly chaotic. With a May 10 date set for the session’s end, the pressure will be upon us soon.
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Can the process of compromise and consensus-building work?
Yes. I give credit to my committee chair for leading us through a Senate bill to reduce exposure to chemicals with significant health risks. It’s a highly important topic, but how to approach it could have been very controversial. Our committee includes seven Democrats, two Republicans, one Progressive, and one Independent, bringing a wide variety of views. We voted the bill out 11-0 because testimony was considered from all sides and incorporated: tackling risks but weighing feasibility of how quickly restrictions could be made effective.
Importantly, we recognized that Vermont is not large enough to be a “market changer.” If we ban something, our market is not large enough to get manufacturers to change course. We will just lose the ability to get the products and hurt our local manufacturers in the process. Instead, we carefully followed the lead of a few larger states (California, most often) in terms of both the chemicals and the products, as to whether alternatives are available. We also set phase-out timelines based on those factors.
The intentional addition of a number of chemicals will be banned in 2026 from products with a lot of risky skin contact, namely cosmetics and menstrual products. Cosmetics is very broadly defined: anything “intended to be rubbed, poured, sprinkled, or sprayed” on the body for the purpose of “cleansing, promoting attractiveness, or improving or altering appearance,” with soap as the only exclusion.
Dangerous PFAs (“forever chemicals”) will also be regulated then, from children’s products, clothing and textiles, and cookware. By 2028, the ban will reach artificial turf, which is currently loaded with these chemicals which slough off onto the skin and clothing of those playing on them, as well as into our water tables.
There was one skirmish. On the last day, finishing up the 30-page bill, we were resolving a few final items, including the maximum amount traces of lead that could remain in cosmetics (including in naturally occurring forms.)
The Senate had sent us the bill saying it had to be under 10 parts per million, the same limit as set by California and others. Washington State alone had recently set the maximum at one part per million, which our local manufacturers said was not feasible. Local environmental groups pushed for that level, and we were split on it.
We came up with a compromise at five. But that was without taking any new testimony since we were in the final “mark-up” before the vote. Testimony is typically not continued for the committee back-and-forth changes on final parts of a bill.
The day after our committee vote we – and many of our House colleagues – heard outcrys that five was no more feasible than one. We received an amendment proposing a return to 10 and after stalling on reaching agreement, had a vote and agreed 7-4 to accept 10.
There were some vigorous voices of opposition on the floor and a roll call vote was requested, ending up with 101-28 favoring the revision. After resolving that, the final vote, also a roll call, was 138-0 in favor of the bill as a whole.
Now, we watch and await whether the Senate will accept our improvements to its bill!
***
The repaving of Route 12 from Northfield (just past the front of my house and just before Cumberland Farms) through Berlin to the Montpelier line is now underway. It will be starting on the Northfield end, with single lane closures with alternating one-way traffic throughout the length of the project.
If you would like a weekly email updating where the work will be happening that next week, you can email Bethany Oprendek at bethany@bbo-enterprises.com and request to be added to the email list for “Northfield-Berlin STP PS24(1).” If you want to check the status on your own, go to vtrans.vermont.gov/projects/updates and click on the “Northfield-Berlin” project.
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Speaking of roads, Anyone else on the roads Monday evening?
My brother came up from Maryland for a visit and wanted maximum totality viewing of the eclipse, so we went up to North Troy to avoid the big-town crowds. The return home was going fine most of the way, since we were going via local roads.
Just a few miles north of Montpelier on Rte. 12 south, we were diverted by GPS via back roads to Bailey Drive and hit total gridlock. It took about an hour to get back on 12 via Dog River Road, then it seemed to be clear sailing continuing south.
Just before Chandler Road, GPS gave a “road stoppage ahead” alert and diverted us onto Chandler. Once again clear sailing, until about a quarter mile before Cox Brook Road: dead stop. We inched forward and realized that Rte 12 and Chandler/Cox Brook would have to merge – and then reached Cox Brook and discovered there was a long line of cars there to merge with first, as well!
It looked like it would take an hour or more for that last mile home, so we went west on Cox Brook instead to cross on Aseltine. The stop-and-go line of cars heading south extended endlessly beyond Aseltine! It appears they were all avoiding the jammed-up I-89 Waterbury entrance and then hitting the backlog of cars that was avoiding the Montpelier entrance, all trying to reach exit 5. My brother was driving his compact 2WD car and we had quite the experience with his crash course in Vermont mud driving, but made it easily home by reaching Rte 12 and doubling back north.
Watching from my house, the traffic on 12 was still stop-and-go at 9 p.m. By 10 p.m., it was moving steadily but still an endless stream of drivers. But even all those out-of-state folks were behaving politely, taking turns with merges and even breaking their flow to allow us to cross the Cox Brook one-lane covered bridges when we were headed counter-direction.
A memorable eclipse, and memorable traffic.
***
Thank you for the honor of serving you. Please be in touch with me (adonahue@leg.state.vt.us) or Rep. Ken Goslant (kgoslant@leg.state.vt.us) at any time for questions or input.
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