State to Main: Week 18

STATE TO MAIN

May 12, 2023

Good Afternoon –

With just hours of action remaining on the House floor until adjournment, several major legislative priorities are expected to be approved by the Legislature on the final day of the session. Housing, childcare, and the budget will all be sent to the Governor for his consideration. However, the Governor has repeatedly expressed his concern that the Legislature’s spending proposals do not reflect the needs of Vermont. With firm opposition to any increased taxes and fees throughout his time in office, he is expected to veto several bills before the session is truly over.

State to Main will be back next week with a full recap of adjournment action and, of course, coverage of the veto session is slated for late June.

As always, the Vermont Chamber advocacy team can be reached at govaffairs@vtchamber.com.

Sincerely,

Megan Sullivan, VP of Government Affairs

Legislature Levies an $80 Million Payroll Tax on Vermont Businesses and Employees

Following tense negotiations between the House and Senate on how to increase funding beyond the $125 million the state already invests in childcare, it was ultimately decided to impose a 0.44% payroll tax increase on Vermonters. The Vermont Chamber has been deeply concerned throughout the session that this legislation would increase the cost burden on businesses without clearly addressing workforce solutions. While the Governor’s budget included a record $50 million of new funding for this sector, the Legislature wanted to spend more. The measure would raise $80 million of the over $100 million required annually to nearly double spending on the industry. The tax is to be split between employer and employees, with employers paying three-quarters of this new tax. The bill contains no guaranteed solutions for the availability, affordability, and dependability of childcare. As pointed out by members of the House Ways and Means Committee, it is even likely to prompt childcare price increases for some families. Given that the bill would impose a tax increase, the Governor is expected to veto it.

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Vermont Chamber Secures Extension for Vermont’s Only Business Incentive Program

The miscellaneous tax bill H.471 became the vehicle to pass an essential one-year extension of the Vermont Employment Growth Incentive program. The issue was previously housed in S.94, which also included language on Tax Increment Financing. With little to no time to review, discuss, or take testimony on proposed House changes to S.94, the Senate decided to postpone action on program changes until next year. The Vermont Chamber played a crucial role in rerouting legislation that would have effectively ended the VEGI program and instead advocated for a balanced review and modernization of the program.

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Bill Updates

To-Go Cocktails – The Legislature has passed a bill that includes a repeal of the sunset on the sale of alcoholic beverages for off-premises consumption with strong bipartisan support.
Affordable Heat – The Legislature voted to override the Governor’s veto on legislation that could increase heating fuel prices by 70 cents a gallon. The vote in the Senate was 20-10 with several Democrats straying from party lines.
Severe or Pervasive Standard – The House has passed the bill to remove the “severe or pervasive” standard of harassment and discrimination in concurrence with the Senate. This bill will expand the definition of what is considered harassment in the workplace and if the bill becomes law, it is likely to prompt litigation to determine the guidelines for unlawful harassment and discrimination.
Housing - After leaders in the House restored essential provisions to the bill in committee, it underwent a series of proposed amendments on the House floor before ultimately being passed by the body.
State-Run Retirement Program - Both the House and the Senate have passed legislation championed by Treasurer Mike Pieciak to auto-enroll employees in a Roth IRA if their employers do not offer a retirement plan. Businesses with more than four employees would be required to enroll their employees by 2026.
Bottle Bill – An overhaul of the beverage container deposit law is headed to the Governor’s desk for his consideration. The bill expands the types of beverage containers included in the program like water bottles and energy drinks.
Workforce Development - The $10 million of funding that the Vermont Chamber helped identify from the embattled FY23 COVID Worker Relief Program has been reallocated to fund workforce recruitment and retention efforts outlined in the budget.
Liquor Liability Insurance - This critical bill for the restaurant and bar industry is on the Governor’s desk. Once signed into law, the Vermont Chamber will track reviews of Vermont’s Insurance Services Office rating.
Professional License Fees – A bill that would increase the required fees for occupational licensure across the board is awaiting a decision from the Governor. Its fate is uncertain due to the additional cost increase for Vermonters.

Chamber News

Join Us for the Leahy Celebration: Register Today!

Join us in honoring Senator Patrick Leahy, Vermont's very own superhero and dedicated public servant. Senator Leahy and Marcelle have had an incalculable impact on Vermont’s businesses and communities supporting innovation, research, higher education, transportation, and manufacturing while supporting the environment and communities unique to Vermont.

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