March 27, 2026 - Vermont Chamber of Commerce

House Budget Advances with Targeted Investments as Fiscal Pressures Grow

March 27, 2026

House Budget Advances with Targeted Investments as Fiscal Pressures Grow

The House passed H.951, the FY27 budget, following a divided floor vote of 97-40, signaling a growing concern about spending levels and long-term fiscal sustainability.

The $9.3 billion budget is shaped by a constrained fiscal environment with competing priorities across Vermont. As federal support recedes and cost pressures persist, this budget reflects an attempt to balance immediate needs with targeted investments that deliver measurable return and support long-term economic growth.

The budget includes several investments aligned with the Vermont Chamber’s priorities, particularly in housing, workforce development, and economic competitiveness, though gaps remain.

Key Investments That Support Vermont’s Economy:

$4 million in base funding for the Vermont Housing Improvement Program (VHIP), a proven, high-impact tool for bringing housing units back online and expanding workforce housing supply.
$800,000 for the Manufactured Home Improvement and Repair Program (MHIR), preserving one of Vermont’s most accessible forms of affordable housing.
$200,000 for Advance Vermont, supporting upskilling and stronger alignment between education and career pathways.
$75,000 for the Vermont Professionals of Color Network, advancing efforts to attract and retain a broader, more diverse workforce.
$150,000 for the International Business Development Office, supporting expansion of Vermont’s global trade and market access.
$300,000 in additional funding for the Serve, Earn, Learn Program, connecting Vermonters to workforce participation and training opportunities.
$2.32 million for Freedom and Unity Grants, continuing investments in workforce training and economic development.
3% base increases for UVM, VSAC, and Vermont State Colleges, supporting Vermont’s higher education system and long-term talent pipeline.
$350,000 in Down Payment Assistance Program tax credits, supporting pathways to homeownership for moderate-income Vermonters.

These investments reflect programs that deliver measurable returns, expand housing supply, and strengthen Vermont’s workforce pipeline, aligning with key drivers of long-term economic vitality as identified in the Vermont Futures Project Competitiveness Dashboard.

However, not all high-impact economic development tools were fully funded, creating gaps that may limit business growth and workforce attraction. Notably, the Green Mountain Jobs and Retention Program was not funded at a level that fully supports workforce recruitment and retention, weakening a proven tool for attracting and retaining the talent Vermont needs to grow its economy.

A Budget Reflecting Increasing Scarcity

This year’s budget underscores a clear shift: fiscal constraint is now the operating environment. With more than $3 billion in budget growth since 2020, the expiration of federal relief funds, and Vermont’s already high tax burden, options for new revenue are increasingly limited. The split vote in the House reflects growing recognition that spending growth must be paired with economic growth, and that prioritization is no longer optional.

Without addressing the underlying drivers of economic growth, workforce, housing, and business competitiveness, budget pressure will continue to translate into constrained services and limited opportunity. Absent a sustained focus on root causes, this budget will not be an outlier, but part of a continued pattern of difficult tradeoffs in a constrained environment.

What Comes Next

As the budget moves to the Senate, there is an opportunity to further refine priorities and sharpen focus on high-impact investments. The level of division in the House suggests the path to final passage may be complex, with continued debate around sustainability, affordability, and spending levels.

In this environment, directing resources toward programs with demonstrated effectiveness and measurable return will be essential. For Vermont businesses, this budget reinforces a clear reality: long-term economic strength will depend on disciplined investment, a focus on growth, and alignment between spending decisions and the state’s economic capacity.

March 27, 2026

CONNECT WITH FISCAL POLICY EXPERT

RECENT NEWS

Workplace Temperature Mandate Fuels Frustration as Testimony Highlights Disconnect

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Workplace Temperature Mandate Fuels Frustration as Testimony Highlights Disconnect

March 27, 2026

Workplace Temperature Mandate Fuels Frustration as Testimony Highlights Disconnect

The House General and Housing Committee took testimony this week on proposed “extreme temperature” workplace provisions in S.230, drawing strong opposition from Vermont employers and underscoring a growing disconnect between the proposal and real-world workplace conditions.

The language under consideration originated as a standalone proposal that did not advance by crossover and is now being reviewed for inclusion in a Senate bill. As drafted, it would establish new regulatory requirements across a wide range of industries and work environments, significantly expanding employer obligations.

A coalition of 20 Vermont-based employer organizations submitted a joint letter outlining concerns with the scope and structure of the proposal. The letter emphasized the difficulty of applying a single, prescriptive framework across industries where work varies by location, season, and task.

Testimony from the Vermont Department of Labor provided important context. Data presented to the Committee showed that complaints related to temperature exposure are limited and, when they have been filed, have been investigated and addressed through existing workplace safety standards. In those cases, conditions were significantly more extreme than the thresholds outlined in the bill.

This distinction has become central to the discussion.

The proposal would trigger requirements at temperatures above 80 degrees and below 35 degrees, conditions that occur regularly in Vermont. As written, this would extend regulatory requirements into routine, day to day operations rather than focusing on more severe or hazardous conditions.

The structure of the proposal raises operational concerns. It requires continuous temperature monitoring at all worksites and in work vehicles, along with written, site-specific plans and new training and compliance obligations. For businesses that operate across multiple locations in a single day or rely on mobile crews, this would require constant updates, duplicative documentation, and additional administrative capacity to manage compliance in real time.

The bill’s treatment of vehicles and equipment is another point of concern. By defining vehicles as regulated workplaces and requiring temperature controls, including heating and, in some cases, air conditioning, the proposal extends requirements to equipment that is not designed to function as a climate-controlled environment. For many industries, compliance would require costly retrofits or replacement of equipment. In some cases, compliance may not be feasible.

Indoor businesses would face challenges as well. Requirements tied to temperature thresholds could affect restaurants, commercial kitchens, and other spaces that are not consistently climate-controlled or cannot maintain specific temperatures during peak operations.

The requirements would apply to state and municipal operations, extending the cost of compliance to taxpayers and public sector fleets across Vermont.

Employers pointed to existing workplace safety protections under the Vermont Occupational Safety and Health Administration and the federal Occupational Safety and Health Administration, noting that these frameworks already provide enforceable standards addressing workplace conditions, including environmental exposure.

The Committee’s focus on this proposal comes as Vermont continues to face significant economic challenges, including a well-documented housing shortage and workforce constraints, raising broader concerns among employers about legislative prioritization and the cumulative impact of new regulatory requirements on business operations.

March 27, 2026

CONNECT WITH OUR EMPLOYER MANDATES EXPERT

RECENT NEWS

This image shows a calculator, pen, and budget planning paper work.

House Budget Advances with Targeted Investments as Fiscal Pressures Grow

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H.933 Advances Balanced Approach While Late-Stage Tax Proposal Raises Business Concerns

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H.933 Advances Balanced Approach While Late-Stage Tax Proposal Raises Business Concerns

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H.933 Offered Balanced Approach While Failed Late-Stage Tax Proposal Raises Business Concerns

As previously reported, after months of work by the House Ways and Means Committee, the Tax Department, and the Vermont Chamber, H.933 is designed to expand opportunity for Vermont’s small businesses. The bill aligns Vermont with federal tax policy, strengthens tools like the R&D credit, and improves predictability for businesses looking to invest and grow.

A late-stage proposal, the the Priestley Cole amendment, introduced a tax structure with significant implications for employers before being withdrawn ahead of a vote. The amendment would establish a new minimum tax tied to federal adjusted gross income and increase top marginal tax rates. For many Vermont businesses, particularly pass-through entities, this would increase tax liability regardless of actual profitability and add complexity to long-term planning.

What it means for business:

Many small businesses in Vermont are structured as pass-through entities, meaning business income is reported on the owner’s personal tax return. In practice, that income often represents revenue used to cover payroll, inventory, equipment, and operating costs. By tying a minimum tax to adjusted gross income, the amendment creates a disconnect between tax burden and a business’s actual financial position.

Under the withdrawn proposal, taxpayers with federal adjusted gross income above $150,000 would pay the greater of their standard tax liability or 3% of that income. For businesses with narrow margins or fluctuating revenue, this establishes a floor on tax liability that may not reflect profitability.

The amendment also proposes increasing Vermont’s top marginal income tax rates to 11.75% on income between $500,000 and $1,000,000 and 13.75% on income over $1,000,000. Because these rates apply to pass-through income, they directly affect business owners and may influence decisions related to hiring, reinvestment, and expansion.

These changes come at a time when Vermont continues to face challenges with economic momentum, workforce availability, and affordability. Tax policy plays a direct role in shaping business confidence and the state’s ability to attract and retain employers and talent.

Vermont has already made a clear policy choice to maintain a progressive tax system. The question is how to balance that structure with policies that support economic growth and affordability. While the amendment includes adjustments at lower income levels, its primary mechanism is a combination of higher rates and a new minimum tax structure.

H.933 was developed to support growth, improve predictability, and better position Vermont businesses to compete. The Priestley Cole amendment introduces additional tax exposure and complexity that could limit reinvestment, slow growth, and reduce predictability for Vermont employers.

Although the amendment has been withdrawn and is expected to be taken up in Ways and Means, its implications remain important for Vermont’s business community.

The Vermont Chamber will continue to engage as this proposal is considered to ensure policymakers understand the real-world impact on businesses and working Vermonters, and to support policies that strengthen economic growth, workforce development, and long-term competitiveness.

March 27, 2026

CONNECT WITH OUR TAX EXPERT

RECENT NEWS

Issue Updates from the State House

Week of March 23, 2026

A weekly snapshot of key legislative activity impacting Vermont’s business community.

Property Taxes: The House advanced H.949 on a vote of 78-61-9, a bill that would use half of the state’s $104.9 one-time funds to uniformly buy down rate increases to an average property tax increase of 7 percent. The bill would also preemptively allocate the other half of the one-time money for the education fund for buy downs in future years. This falls short of the Governor’s proposal to use the full one-time funds this year, and legislators have yet to create the structural change needed to reign in education spending.
Education Spending: The Senate advanced S.220, a bill that would redefine excess education spending and lower the excess education threshold from 118% to 112%, an approach intended to slow education cost growth and reduce the number of districts triggering the excess spending penalty. The bill now moves to the House Ways and Means Committee.
Act 250: After lengthy and highly contentious floor debate, the Senate advanced S.325, a bill that would make amendments to 2024’s Act 181 including moving interim exemptions to 2030, delaying the road rule until 2030, and delaying the implementation of tier 3 until July 208 and given the land use review additional guidance to change the current trajectory of the underlying bills implementation. The bill now moves to the House.
Housing Availability: The Senate advanced S.328, a bill that would expand the authority of the Vermont Economic Development Association to finance certain housing projects and study legal measures needed to require common interest communities to allow long term rentals, operation of family child care homes, and the building of accessory dwelling units on a homeowner’s property. The bill now moves to the House.
Economic Development: The Senate advanced S.327, a bill that establishes two new task forces to pursue a new culinary institute and improve Vermont-New York economic relations, and that would repeal the VEGI sunset. The Vermont Chamber is named in both task forces remaining, and the bill now moves to the House Commerce and Economic Development Committee.
Primary Care: The Senate advanced S.197, a bill aimed at increasing the use of primary care to reduce strain on hospital systems. This step toward long-term healthcare cost containment now moves to the House Health Care Committee.
Vocational Rehabilitation: The House Commerce and Economic Development Committee continued review of S.173, a bill proposing modifications to Vermont’s vocations rehabilitation program and hearing testimony on the need for independent pre-screening processes. Continuing these processes, enacting more cost-effective and coordinated rehabilitation plans, and improving outcome tracking to ensure meaningful program improvements remains vital.
Data Brokers: The House advanced H.211 a bill that attempts to tighten oversight of data brokers through new registration, reporting, and consumer protection requirements, but in doing so introduces a complex and expanding regulatory framework that has caused serious concern from industry leaders. The bill now moves to the Senate.
International Trade: The House Commerce and Economic Development and Senate Economic Development, Housing, and General Affairs Committees welcomed representatives from Japan and Taiwan, reinforcing Vermont’s international economic partnerships. Strengthening global relationships remains key to building a diverse, resilient, and competitive state economy.
Cannabis: The Senate advanced S.278, a bill that would establish cannabis event permits modeled after alcohol event permits, allow retailers to sell higher quantities, and repeal integrated license provisions. A floor amendment offered by the Senate Economic Development, Housing, and General Affairs committee added a provision allowing for future joining of interstate commercial cannabis compacts, providing an additional venue of sale for Vermont Cannabis retailers. The bill now moves to the House.
Building Energy Code: The House advanced H.718, a bill that would create structural updates to Vermont’s residential building standards framework for residences with fewer than three dwelling units. The bill now moves to the Senate.
Event Ticketing: The Senate Economic Development, Housing, and General Affairs Committee continued work on H.512, legislation aimed at curbing excessive resale of event tickets and strengthening consumer protections for venues using online ticketing platforms. The committee raised concerns about how price caps could impact safety and transparency in the resale market and will continue refining the bill to ensure it achieves its intended outcomes.
Sister State: The Senate Economic Development, Housing, and General Affairs Committee reviewed H.674, a bill passed by that House that creates a process for establishing additional Vermont Sister States in order to strengthen Vermont’s international engagement. In its review, the committee focused on standardizing international relationships and dug into the bill’s stringent rules around spending.