Day: June 5, 2026

The 2026 legislative session was defined by big structural debates about education, land use, affordability, and Vermont’s long-term economic competitiveness. Lawmakers advanced major reforms in areas including education governance, tax conformity, data privacy, and economic development, while also relying on one-time funding to address mounting cost pressures.

Employers also faced proposals that would have increased taxes, expanded workplace mandates, and added new regulatory burdens. Many of those efforts were ultimately set aside, underscoring the continued importance of business engagement in the policymaking process.

Below is a snapshot of the major developments, decisions, and debates that employers should know about from the 2026 legislative session. 

✅ What Changed for Vermont Employers

💸 Property Tax Increases Temporarily Softened More than $100 million in one-time funds were used to hold average property tax increases to roughly 3.5%. The challenge now shifts to how those costs will be addressed in future years.

📈 State Spending Continues to Climb Vermont’s budget has grown by $3.5 billion over six years. While spending growth slowed this year, affordability remains a major concern for employers.

🔬 Research & Development Incentives Expanded Businesses investing in innovation will have access to significantly larger state R&D tax credits, strengthening Vermont’s competitiveness for growth and investment.

🏡 Second Home Tax Classification Approved A new tax classification for second homes was created while businesses and long-term rental housing remain grouped together under the new system.

🎓 Education Reform Took a Major Step Forward Lawmakers approved sweeping changes aimed at controlling long-term costs, modernizing governance, and improving educational outcomes.

📉 Pressure Added to School Spending Excess spending thresholds will gradually tighten, creating additional incentives to control education costs before broader reforms take effect.

🔧 Career & Technical Education Stays Front and Center CTE programs remain a key workforce priority, with new focus on student access, workforce alignment, and future governance discussions.

🏗️ Act 250 Barriers Rolled Back Several costly and restrictive Act 250 provisions were repealed, while key exemptions were extended through 2028 to keep housing and economic development projects moving.

🏘️ Housing Development Gets More Flexibility Communities will be required to allow additional housing options in more areas, helping remove barriers to new housing construction.

🏠 New Housing Construction Tools Created New financing programs and modular housing initiatives aim to increase housing production and improve affordability.

🏢 VEGI Is Here to Stay The sunset on Vermont’s primary job creation incentive program was removed, providing greater certainty for businesses considering expansion.

🌲 Rural Development Funding Expanded Additional funding and program improvements will help support business relocation and expansion projects across Vermont.

⚖️ Small Businesses Gain More Support Additional funding was approved for the Small Business   Center and Small Business Law Center, expanding access to expert guidance.

🏨 Hospitality Workforce Investments Continue A new apprenticeship pilot and hospitality education study aim to strengthen workforce pipelines for one of Vermont’s largest industries.

🔋 New C-PACE Financing Program Launches Businesses can now access long-term, low-cost financing for energy efficiency, renewable energy, and resilience projects.

🔒 Data Privacy Rules Reach the Finish Line Vermont adopted a new privacy framework that more closely aligns with neighboring states, creating a more workable compliance path for employers.

📡 Broadband Expansion Keeps Moving Streamlined permitting for telecommunications projects was extended, supporting continued broadband buildout throughout Vermont.

🍺 Brewers Gain New Flexibility Vermont brewers will have more options for self-distribution and product sales, creating new opportunities for growth and market access.

🪙 Cash Transactions Get Simpler Businesses may now round cash transactions to the nearest five cents, reducing the challenges associated with the declining use of pennies.

🚗 Road Funding Shifts for Electric Vehicles Beginning in 2027, electric vehicles will transition from a flat fee to a mileage-based system to help fund transportation infrastructure.

🛑 The Good and Bad of What Didn’t Make It Over the Finish Line

🚫 Major Income Tax Increases Rejected Proposals that would have increased taxes on investment income, business transitions, and pass-through entities did not advance.

🛑 New Employer Mandates Stalled Proposals affecting workplace temperature standards, flexible scheduling requirements, and non-compete agreements failed to advance.

🐀 Rodenticide Ban Stopped A proposed ban on rodenticides did not advance, preserving an important pest management tool for restaurants, food manufacturers, and other businesses responsible for maintaining safe facilities.

⚡ Major Energy Mandates Did Not Advance Proposals related to net metering and building energy requirements stalled, avoiding additional cost pressures on businesses and housing development.

🩺 Association Health Plan Expansion Stalled Efforts to expand affordable health coverage options for employers did not advance, leaving businesses with fewer tools to manage rising health care costs.

🌊 Wetland Reform Remains Unfinished No major changes were made to Vermont’s wetland permitting system, leaving ongoing concerns about project costs, timelines, and predictability.

♻️ Additional Plastics Restrictions Did Not Advance Legislation that could have imposed new restrictions on advanced recycling and manufacturing processes did not move forward.

💰 Businesses Avoided New Cost Pressures A number of proposals that would have increased costs for employers, from new workplace mandates to additional taxes and fees, ultimately failed to gain enough support to pass.