Covid Recovery and More
April 19th, 2021
The Vermont House has been busy over the last several weeks, finalizing a major Covid recovery bill and passing significant tax reform legislation that will help lower property taxes, assist Vermont-based businesses, and recognize the service of retired military personnel.
Last month I mentioned the Covid relief bill, H.315, which we had passed and sent to the Senate in late February. In the meantime, Congress passed the American Rescue Plan Act, which will make additional federal money available to Vermont to aid in the economic recovery. The Senate decided to put an initial round of those funds to work right away: it amended H.315 to direct funding to school indoor air quality improvements, the Vermont Food Bank, nursing scholarships, mental health supports, the Reach Up program and other urgent needs. The House agreed to those and other changes, also adding a provision exempting some unemployment income from taxation. The bill became law on Saturday.
The Legislature will be considering how to spend the remaining ARPA funds in the closing weeks of the session, and may defer some of the decision making until next year. Our priorities include workforce development, addressing climate change, broadband, and housing.
Tax Reform S.53 began as a bill to exempt feminine hygiene products from the sales tax (I co-sponsored a similar bill in the House). We ended up with legislation that does that, and also makes significant changes to the tax code, bringing it more into alignment with the evolving 21st century economy. First, it eliminates a sales tax exemption on remotely accessed software. This provision will add over $10 million each year to the Education fund, which will mean a comparable reduction in property taxes. Second, it modernizes the corporate tax structure, lessening the burden on Vermont-based companies that do business nationwide, and requiring large corporations who claim negative earnings to pay a higher minimum tax (tax rates are unchanged). And finally, it exempts $10,000 in military retirement income from taxation, honoring the service of the nearly 4,000 retirees who have made a home in Vermont.
A separate revenue bill adds a surcharge on real estate transactions over $1 million and expands a tax-credit program for manufactured homes targeted at low-income residents.
Here are some other bills we have been working on (unless otherwise indicated, there was a voice vote, and I supported the legislation):
Broadband Expansion The long-envisioned goal of bringing reliable, high-speed internet to underserved areas of Vermont took a major step forward with the passage of H. 360. Building on the impressive work done over the past year by our volunteer regional Communications Union Districts (including the Southern Vermont CUD), the bill would designate $150 million of ARPA funds to support design, engineering, and construction of broadband infrastructure. It passed with broad support, 145-1.
Childcare H.171 With access to affordable childcare a critical issue for families and the economy, this bill has been a high priority for the legislature this session. For families, the legislation expands eligibility for financial assistance, and sets a target that low-income families pay no more than 10 percent of gross income on childcare. For childcare providers and staff, the bill allocates $2.5 million in new funding for scholarships and student loan repayment. H.171 also funds critical updates to the IT system that supports the financial assistance program, and requires continued analysis and reporting. It passed 146-1.
Bottle Bill Update This bill updates Vermont's landmark litter-prevention bill by expanding the scope to include plastic, aluminum, and glass containers of water, wine, hard cider and non-carbonated beverages such as iced tea. The bill originally proposed increasing the deposit to 10 cents, a provision I supported (it’s been at 5 cents for almost 50 years). The deposit increase was removed over concerns about redemption fraud along the border with New Hampshire, which has no bottle bill, and in its amended form the bill passed 99-46.
Relief from Abuse H.133 clarifies that when an emergency hearing is held in a domestic abuse case, judges have wide discretion with the relief orders they can temporarily impose—including removal of firearms—until a full hearing is held within two weeks. This bill passed the House 102-44 and is now in the Senate.
Opioid Crises The state's opioid addiction epidemic has not abated during the pandemic, with overdose deaths increasing. H. 225, which passed 126-19, decriminalizes possession of small amounts of buprenorphine, a drug that is often used to combat addiction for individuals who are unable to access the hub and spoke treatment system.
Health Insurance Savings for Small Businesses The House has amended S.88 to lower insurance premiums for small businesses in 2022. Recent changes at the federal level have significantly expanded premium tax credits for individuals who purchase insurance through Vermont Health Connect, making it a logical time to separate small businesses and individuals into different risk pools. Blue Cross and MVP had estimated that premium costs for small businesses could be reduced by about 6 percent as a result.
Medical Consultations by Telephone During the pandemic, healthcare providers in Vermont have been able to bill insurance companies for medical appointments conducted over the phone (at times the only option for those without reliable internet service). By all accounts, this has proven to be a safe and effective way for doctors to "see" their patients. S.117, which the Governor signed at the end of March, extends insurance coverage for these audio-only consultations through next March and will explore options for extending coverage further into the future.
Contractor Registration H. 157 This consumer protection bill addresses a growing number of statewide cases of fraud in the building trades, often at the expense of the elderly. It would create a new registry for home and residential contractors that homeowners could access before entering into an agreement or making a deposit, and passed 97-52.
Pensions State employees and teachers will be impacted, perhaps significantly, by changes that have been proposed to salvage their underfunded pension systems. After hearing requests to take more time to consider its options, the House is proposing to form a task force—composed of members of the pension plans, legislators, and members of the administration—that will meet over the summer and report back with recommendations in August. The proposal would also overhaul the Pension Investment Committee to ensure its membership has more financial expertise.
JHR2 Resolution on Eugenics The House has drafted a formal apology for the state's role in the eugenics movement, which a century ago aimed to force sterilization on “undesirable” segments of the population, including indigenous people, French Canadians, and the developmentally disabled. The vote was 146-0.
Fiscal Update Finally, the latest update from the Joint Fiscal Office indicates that the State is on track to run a budget surplus in both the General Fund and the Education Fund. This is largely attributed to federal stimulus spending, which has kept the economy afloat during the pandemic.
Thank you as always for your interest in these legislative developments. Many of you have reached out during the session with your ideas and input on these and other topics. Your thoughts are always welcome.