Issue Updates from the State House
Week of January 20, 2026
A weekly snapshot of key legislative activity impacting Vermont’s business community.
- Workforce Strategy: The House Commerce and Economic Development committee heard testimony from the Office of Workforce Strategy and Development on efforts to support business expansion, increase retention of college graduates, and grow Vermont’s workforce throughout sectors struggling to recruit. Building upon this work remains critical to addressing improving affordability and ensuring that employers have the workforce needed to remain competitive.
- Housing Development: The Vermont Chamber testified before the Senate Economic Development, Housing, and General Affairs committee, advocating practical housing policies that reduce regulatory burdens and streamline development. Ensuring the legislature continues its focus on tackling Vermont’s housing shortage remains critical to supporting workforce recruitment, business growth, and long-term economic competitiveness
- Drifting Priorities: The House Commerce and Economic Development Committee introduced nine new bills this week, many centered on data privacy regulations. As businesses face mounting challenges, it is critical that the committees prioritize proposals that aim to grow economic development and workforce opportunities to support Vermont’s long-term affordability and competitiveness.
- Bottle Bill: The House Environment Committee reviewed a bill that would rewrite the state’s beverage container redemption law, setting aspirational targets for redemption rates. The bill also includes potential increased fees for manufacturers to support the expanded system.
- Workforce Training: The Senate Education Committee heard testimony from the Vermont Student Assistance Corporation on workforce training programs available to support employee development. These programs offer businesses valuable tools to upskill existing workers or hire job-ready talent.
- Flexible Working Arrangements: The Senate Economic Development, Housing, and General Affairs committee reviewed S.230, a bill that would require employers to grant employee requests for flexible working arrangements, shifting the onus to businesses to prove these arrangements would not work.
- Career Technical Education (CTE): The House Commerce and Economic Development, House Education, and Senate Economic Development, Housing, and General Affairs committees heard testimony on the Administration’s proposal to consolidate CTE leadership under the Agency of Education. The practicality and effectiveness of shifting oversight of this vital system to an agency already burdened by broader education reform efforts will need significant analysis if this proposal moves forward.
- Miscellaneous Tax Policy: The House Ways and Means Committee reviewed a miscellaneous tax bill that would make technical changes to the Vermont tax code, including repealing the denial of other state tax credits(OSCR) for S Corporations, aligning them with other passthrough entities. This small shift could simplify tax procedures and make Vermont more hospitable to S Corporations.
- Education: The Senate Finance Committee reviewed education reform and funding discussions, hearing a report from the school redistricting task force, which fell short of making required recommendations on district consolidation. With a projected average 12 percent property tax increase looming, debates continue over potential one-time buy-downs. Difficult decisions must be made to rein in education spending and to improve system efficiency.
- Energy Code: The House Energy and Digital Infrastructure Committee reviewed H.718, a bill that would push enforcement of existing residential and commercial building energy codes, require new disclosures and training for contractors, and allow municipalities to enforce energy codes alongside the state. If advanced, this bill could add regulatory layers and administrative complexity, a move that directly conflicts with the urgent housing crisis.
- Purchase and Use Tax: Following the Governor’s call for a gradual restoration of purchase and use tax revenue to the Transportation Fund, the House Ways and Means Committee briefly introduced H.643, a bill to fully restore that revenue immediately. This move would allow Vermont to continue to meet federal match requirements and maintain $163 million in funding. Urgent action remains essential to ensure the stability and long-term maintenance of the state’s road infrastructure.
- Commercial Property Assessed Clean Energy Projects (C-PACE): The Senate Natural Resources Committee continued testimony on S.138, a bill proposing to expand the PACE program to include commercial and industrial buildings. The expansion would allow business owners to finance energy improvements and repay the cost over time through a special assessment on its property tax bill.
- Wastewater: The Senate Natural Resources committee reviewed S.212, a bill aimed at streamlining the wastewater connections permitting process and enhancing coordination between municipal and state-level permitting systems. This measure would help reduce timelines and increase the efficiency of new development projects.
- Corporate Tax: The House Ways and Means committee continued testimony on impacts of selective decoupling from federal tax code changes, which would raise the cost of innovation, increase tax code complexity, and penalize firms investing in productivity and higher-wage jobs. In a state with a shrinking workforce, productivity-led growth is essential, especially as Vermont already ranks near the bottom nationally in business formation, investment momentum, and economic growth.
