Day: May 15, 2026

As the Legislature moves deeper into the final stretch of the session, attention is increasingly turning to conference committees, where House and Senate negotiators will attempt to resolve differences on several major bills before adjournment. While some of the remaining disputes center on policy mechanics and implementation, they also reflect broader philosophical divides around taxation, education spending, municipal revenue sharing, housing policy, and the future structure of state government programs.

H.933: Miscellaneous Tax Bill

H.933 serves as the Legislature’s annual miscellaneous tax bill and includes a wide range of technical and policy tax provisions. Most of the bill remains aligned between the House and Senate. Although several areas continue to reflect broader differences around tax policy, municipal finance, and Vermont’s participation in federal incentive programs. A conference committee met briefly Thursday and should continue negotiations early next week.

• Where Things Stand
  • Federal Tax Credit for Scholarship Granting Organizations (SGOs)
    • The Senate version allows Vermont’s participation in the federal tax credit program for contributions to scholarship granting organizations, while adding additional eligibility requirements, reporting standards, and safeguards tied to federal compliance.
    • The House version also allows participation, but requires future legislative action to identify qualifying organizations.
  • PILOT Special Fund and Local Option Tax Revenue Sharing
    • The Senate added language allowing collecting municipalities to receive a 5% greater share of Local Option Tax revenue in fiscal years following an $18 million surplus in the PILOT Special Fund. The House did not include this provision.
  • Additional Senate Tax Provisions
    • The Senate version also includes technical adjustments related to Vermont’s treatment of federal Section 174A research and development expensing changes and qualified small business stock treatment.
    • The bill includes differing timelines related to Vermont’s decoupling from the federal qualified small business stock exclusion.
  • Why It Matters
    • While these provisions represent relatively small portions of the overall bill, they highlight larger debates around state oversight, municipal revenue allocation, business taxation, and how Vermont structures participation in federal incentive programs.
  • What to Watch
    • The remaining disagreements appear manageable from a policy standpoint, but several issues touch broader political and philosophical divisions that could complicate final negotiations as the session enters its closing stretch.

H.949: Yield Bill

The annual yield bill sets the statewide average property tax rate and is one of the most consequential pieces of legislation each year because it directly impacts education property taxes for businesses and homeowners across Vermont.

• Where Things Stand
  • Average Property Tax Increase
    • The House passed a proposal resulting in an average increase of roughly 7%, paired with a one-time buy down and reserves intended to offset future pressure.
    • The Senate advanced a larger buy down that would reduce the average increase to approximately 3.8%.
  • Future Spending Controls
    • The House proposal maintains the excess spending threshold at 118% of the statewide average district per pupil education spending, adjusted for inflation.
    • The Senate version sets the threshold at 112%.
• Why It Matters
  • With the immediate focus largely on lowering next year’s property tax increase, the larger debate centers on how aggressively the state should constrain future education spending growth and whether stronger statewide spending controls are necessary to improve long-term affordability.
  • The debate also closely ties into broader education transformation discussions happening simultaneously in H.955.
• What to Watch
  • The House’s position on the size of the buy down may soften during negotiations, but the future spending threshold could prove more difficult to resolve because it reflects fundamentally different approaches to long-term education cost containment.

H.951: State Budget

H.951 is the state’s annual budget bill and determines how Vermont allocates funding across state government programs and services for the coming fiscal year.

• Where Things Stand
  • The conference committee has held an initial meeting and resolved several smaller issues. However, negotiators are still working through a document outlining roughly seven pages of differences between the House and Senate versions of the budget.
  • Many of the remaining differences involve funding priorities, program allocations, and broader fiscal decisions that intersect with ongoing debates around education finance, affordability, and tax policy.
• Why It Matters
  • While many of the remaining disagreements are narrower appropriations issues, the final budget negotiations will help determine how lawmakers balance affordability concerns, ongoing program investments, and fiscal pressures heading into the next fiscal year.
  • The budget often becomes the vehicle for resolving broader end of session policy negotiations.
• What to Watch:
  • Budget negotiations frequently accelerate late in session once other major policy bills begin to settle. For now, the sheer volume of unresolved differences suggests negotiators still have significant work ahead before reaching a final compromise.

S.325: Amendments to Act 181

S.325 contains revisions tied to the implementation of Act 181 and Vermont’s evolving land use framework. While not technically required for the operation of state government, there is broad political agreement that the bill is effectively a must pass measure this year.

• Where Things Stand
  • Areas Where Broad Agreement Appears Likely
    • Repeal of the road rule
    • Repeal of Tier 3 provisions
  • Areas Still Likely to Generate Debate
    • Composition of the proposed joint legislative oversight committee, where the House version allocates more seats to House members than the Senate version
    • Length of the extension for interim exemptions
    • Several additional technical but significant implementation details
• Why It Matters
  • The outcome of these negotiations will shape how predictable and workable Vermont’s land use transition framework is for communities, housing development, infrastructure investment, and economic growth over the next several years.
  • Much of the remaining debate is less about whether reforms are needed and more about how implementation authority, oversight, and transition timelines should be structured moving forward.
• What to Watch
  • While many observers expect agreement on the bill overall, some of the implementation details could become significant points of negotiation because they will directly shape how Act 181 functions in practice.

H.955: Education Transformation

H.955 is the Legislature’s major education transformation proposal and represents one of the broadest attempts in years to address education governance, affordability, and long-term system sustainability. While the bill still needs to fully clear the Senate, a conference committee already appears highly likely.

• Where Things Stand
  • Pace and Structure of Education Transformation
    • The House version emphasizes a more voluntary, locally led approach to district restructuring with greater flexibility and a longer transition timeline.
    • The Senate Finance proposal moves toward a more state directed framework with firmer timelines and stronger expectations around regional governance changes.
  • Education Finance and Governance Changes
    • The Senate version goes further on regional assessment districts, property tax structure changes, and long-term school construction planning.
    • The Senate proposal also gives Cooperative Educational Service Areas (CESAs) a larger operational role as part of a broader statewide restructuring strategy.
  • Underlying Philosophical Divide
    • The House approach prioritizes local flexibility and gradual transition.
    • The Senate is signaling greater urgency around affordability pressures, declining enrollment, and long-term fiscal sustainability.
• Why It Matters
  • Education costs and governance structure remain central drivers of Vermont’s broader affordability challenges, including pressure on property taxpayers, employers, and local communities.
  • The decisions made in H.955 could shape Vermont’s education system and fiscal structure for decades.
• What to Watch
  • These differences will likely require a conference committee to resolve. However, with Governor Phil Scott already signaling that even if the Senate version does not go far enough, a conference committee is unlikely to be the end of the education transformation debate this year.

While several other bills remain under active debate, the measures now moving through conference committees are among the most consequential remaining pieces of unfinished business this session. At this point, the pace of adjournment will largely depend on whether negotiators can bridge differences on education finance, the state budget, land use implementation, and several politically sensitive policy questions that remain unresolved between the two chambers.