Senate Finance Committee Passes Tax Relief Bill

Senate Finance Committee Passes Tax Relief Bill

The Senate Finance Committee passed H.510 which includes a total of $32 million in tax relief proposals, the bulk of which is a Child Tax Credit. The Senate version, with a cost of $22 million a year, carries a three-year sunset and is drastically scaled back from the House version, which creates a permanent program at the cost of $48 million per year. Also included in the Senate version is an expansion of the Child and Dependent Care Credit, a Student Loan Interest Deduction, a Manufactured Homes Tax Credit expansion, and a Social Security exemption expansion. Read more about the fiscal impacts of the bill according to the Joint Fiscal Office.

Comprehensive Act 250 Bill Passes House Committee

Comprehensive Act 250 Bill Passes House Committee

The House Natural Resources, Fish, and Wildlife Committee added to the Act 250 bill, S.234, before it was passed out of Committee. Key provisions included in this expansive bill are:

Municipal Zoning

  • Allows Neighborhood Development Areas (NDAs) to include flood hazard areas if they are suitable for infill development as defined under Agency of Natural Resources (ANR) rules. If the NDA does include flood hazard areas, the local bylaws must contain provisions consistent with ANR’s model Flood Hazard and River Corridor bylaws.
  • Strikes the requirement that NDAs have either a municipal sewer or an approved community or alternative wastewater system.
  • Requires a density of four residential units of any kind within NDA zoning districts.
  • Provides that no municipal land use permit for a site plan or conditional use shall expire in less than two years.
  • Creates the Municipal Bylaw Modernization Grant Program to provide towns with funding to modernize their bylaws to increase housing density and opportunity.
  • Prohibits towns from requiring more than one parking space per bedroom for Accessory Dwelling Units (ADUs).

Act 250

  • Raises the number of Priority Housing Projects that can be exempt from Act 250 in small towns from 25 to 50 units.
  • Amends the exemption section of Act 250, simplifying the exemption for Priority Housing Projects so that no permit or permit amendment is needed, including for permits on existing projects that will include Priority Housing Projects.
  • Requires towns to respond to requests from Act 250 applicants within 90 days or the application shall be deemed to have no unreasonable burden.
  • Language from the previously House passed H.492 to change the Act 250 governance structure.

Forest Blocks

  • Adds new criterion to Act 250-8C which requires applicants to not cause undue adverse impacts to forest blocks, connecting habitats, and rare and irreplaceable natural areas.
  • Requires ANR to map forest blocks and connecting habitat and to establish procedures for updating maps.

Removed from the bill is the Senate’s Road Rule language, which Administration officials have opposed, along with proposals on forest fragmentation and Act 250 governance, while also  advocating for full Act 250 exemptions for housing in state designated areas. It’s increasingly difficult to see how these modest gains in creating new Priority Housing Projects coupled with the expanding overall jurisdiction of Act 250 will lead to progress on the housing shortage crisis for middle income earners.

Economic Development Bill Advances to the House

Economic Development Bill Advances to the House

The omnibus economic development bill that contains several Vermont Chamber priorities, such as business grants, relocation incentives, and marketing funding, finally passed the Senate after the Senate Economic Development, Housing, and General Affairs Committee added a study of a state and local tax (SALT) deduction cap workaround to the already lengthy bill. This tax relief measure would have either a net neutral or positive impact on state revenues and would provide relief to many businesses. An earlier attempt to add sports betting didn’t succeed, but may be added by the House as the bill advances.

Meanwhile, the Department of Labor testified in the House Commerce and Economic Development Committee again to the strain that the planned $25 supplemental weekly unemployment insurance benefit would put on the aging mainframe system. The Committee considered less onerous alternatives to reduce staff time and costs, including a possible tax credit for unemployment insurance income. Yet to be resolved are the total amount allowable in the budget for these initiatives and ones contained in the omnibus workforce development bill. The Vermont Chamber will work to ensure there is enough funding for both important measures. Contact Amelia Seman to learn more about this bill or share how a SALT deduction cap workaround would impact you or your business.

Senate Passes $8 Billion Budget, Governor Raises the Prospect of a Veto

Senate Passes $8 Billion Budget, Governor Raises the Prospect of a Veto

The Senate passed an $8 billion budget several weeks earlier than anticipated, and the Governor immediately released a statement outlining his concerns, setting up the annual ritual of resolving the three different versions of budget priorities before final adjournment can happen. The Senate’s budget contains $70 million in housing investments, more than $100 million in workforce and economic development to support sectors hard hit by the pandemic, increased investment in childcare providers, $95 million for broadband connectivity, and $30 million in tax relief. The Governor’s concerns center around the Senate budget’s reduced tax relief, insufficient workforce retention and recruitment initiatives, the exclusion of the capital investment program, and reduced funding for Career and Technical Education. At a press conference on Wednesday, Senate leadership defended their bill, promising to be ready to override the Governor’s veto if necessary.

Back in March, the House passed their version of the budget, which included larger investments in the state college system than the Governor had proposed, but left out the middle-income homeownership program, a priority of the Governor. The House-passed bill also left out the roughly $100 million in economic development initiatives from the Governor’s proposal. While the Senate-passed version of the budget is closer to the Governor’s proposed budget, the remaining disparities may be too large for him to accept, setting the stage for a showdown in the final weeks of the session.

The Adult in the Room

The Adult in the Room

With two weeks to go before the target May 6 adjournment, the betting pool is in full swing. Those placing bets in favor of meeting the deadline point to the early budget action by the Senate, which sends the $8 billion appropriations bill to conference committee to resolve the differences between the House and Senate versions. Others have guessed a week later because no one likes working on the Saturday before Mother’s Day and college graduation weekend. Then there are the realists, putting their money down on late May due to Governor Scott’s growing list of disagreements with legislative proposals.

In the last few weeks, the Governor has outlined his disagreements with several legislative proposals, including pension reform, economic development investment, tax relief packages, new program spending, a contractor registry, and housing rental registries. He reportedly made an off-camera comment last week that “someone needs to be the adult in the room” referring to his willingness to veto a budget with spending that goes beyond what he believes is fiscally prudent.

This is typical end-of-the-session posturing, much of which will be negotiated to a compromise before the Legislature delivers these bills to the Governor’s desk. For many policy makers already looking ahead to the November election, the summer campaign season provides additional motivation to reach consensus quickly. In previous years, conventional wisdom might indicate that the Governor has this same motivation, but no opponent has yet announced.

If you’re placing bets in the adjournment pool, make sure you understand the difference between adjournment to a date certain and adjournment sine die, the former allowing for the Legislature to return to consider a veto override and the latter being final adjournment. Either way, you can count on the Vermont Chamber’s five-person lobbying team to be working for you in Montpelier right down to the end.