Since getting back to Montpelier in January, lawmakers have introduced numerous bills, including a handful of environmental proposals, and two pieces of legislation that would implement higher taxes on wealthy Vermonters.
A lot of attention is being spent on the state’s ongoing housing crisis, as well as the response to last summer’s historic flooding. On that front, the House and Senate have already passed a bill relieving municipalities with damages from last year’s floods from having to pay state property taxes on some of the impacted locations.
Lola Duffort, Vermont Public's education and youth reporter, Abagael Giles, Vermont Public's climate and environment reporter, and Calvin Cutler, WCAX political reporter, joined guest host Mitch Wertlieb to discuss the bills being considered. Here are a few key takeaways from that conversation.
What’s in the Budget Adjustment Act
The Budget Adjustment Act is the bill that lawmakers pass to adjust the current fiscal year's budget. Since the fiscal year is halfway through, it's now known that some expenses are higher and some are lower than projected. The bill, which adds $68 million to the previously passed budget, has already passed the House and is now in the Senate's hands.
This BAA includes an extension to the motel hotel program for unhoused Vermonters. People who were going to lose their motel housing this spring will have it until June. It also expands the pool of people who are going to be allowed to stay in.
The BAA also directs $36 million to help municipalities and the state draw down FEMA funds and match FEMA funds for flood relief. There’s also about $15 million to municipalities to use on flood relief items.
“That $15 million that lawmakers want to use and give to municipalities has been objected to by the governor, who is worried that the legislation is a little bit vague about exactly how municipalities are expected to spend this,” Duffort said. “The Senate is supposed to flesh out those details. They're also nervous about spending in general.”
Duffort added that there’s been a lot of disagreement between the two chambers in recent years, particularly on spending decisions.
Flood River Corridor Bill
This bill takes a look at how the state regulates development, flood hazard areas and river corridors in the state. A lot of that work had fallen on towns, a kind of patchwork approach. Lawmakers are proposing bringing the state into that regulation and making it more statewide.
July’s flooding showed the effects of watersheds in Vermont, where management decisions, river infrastructure, housing upstream can influence what happens during a flood event in a community downstream, Giles said.
“There's a lot of interest in thinking about when we build resilience as a state, how can we incentivize, support and coordinate this kind of watershed planning so that a community downstream, doesn't pay for, you know, a decision made upstream,” she said.
The bill also makes it a policy of Vermont to manage for a net gain of wetlands. That's really important because wetlands, as seen with Hurricane Irene and communities in Addison County, have an incredible capacity to sponge up or slow floodwaters.
There's also a component of the bill that takes a look at how the state manages private dams. It creates a new fund to do emergency restorations on dams that are deemed to be unsafe and high hazard in the state. It also creates staffing for the program and it gives Vermonters the power to petition the state to investigate dams if they think the dams might have been impacted by flooding downstream or if the structure might be unsafe. The Scott administration has had some back and forth with lawmakers over this bill regarding who should do that regulating.
Property taxes and schools
The Vermont Department of Taxes came out with a projection late last year that residents’ property tax rates would increase by more than 18% in 2025. Gov. Scott responded by asking lawmakers to rein in spending. Duffort said lawmakers are currently in fact-finding mode— trying to figure out how bad the problem is and what their options are.
“There's a conversation about how to mitigate what's coming down the pike in people's next tax bill, so there's a short-term conversation,” she said. “Then, there's also a longer-term conversation about education funding that I think this Town Meeting Day could definitely serve as an inflection point on.”
There are a lot of factors driving that increase. Schools are dealing with the same inflationary costs that all employers are dealing with. Health care is a huge factor with increases in premiums. There's also the retreat of federal pandemic-era aid, when schools got extra funding during COVID. That extra funding got rolled into the school budgets, and now communities are facing a fiscal cliff because that federal money is gone.
Duffort said there's another really important factor— the retooling of the education funding formula that was passed in 2022. “Education officials are very concerned that a kind of temporary tax break that was built into that law, is also encouraging at least some districts to spend even more,” she said. “This is all creating kind of a perfect storm.”
Duffort said what happens on Town Meeting Day— whether a handful of school budgets go down or it’s a large-scale massacre of budgets— could signal what that long-term conversation looks like, and whether or not lawmakers take that as a mandate to look more aggressively at reforms.
The House Ways and Means Committee, the tax writing committee in the House, is taking the lead on these conversations and they're starting to take a look at what offsetting revenues there are to at least partly buy down this increase in property taxes. But anything like a soda tax or a candy tax would only soften the blow, she said, not take care of it entirely.
Act 250
Last year, lawmakers made some minor tweaks to Act 250, Vermont’s land use and development law. But this is the year that lawmakers have agreed to really talk about Act 250 reform, Duffort said. Gov. Phil Scott really wanted to do more aggressive reform then but agreed to press pause, she said, waiting for some studies to come out.
Those studies are now out. The administration introduced in January a proposal which has gotten tripartisan support. This would make a bunch of amendments to the law, including the rule that requires a developer to go through a review if it’s building 10 units within five miles within five years, Duffort said. That threshold has long been a big topic of conversation. The governor wants to increase that to 30 units within certain designated areas. Gov. Scott also has ideas for tax breaks to certain types of development.
While the governor has some bipartisan support for his legislative proposal, we are seeing multiple kinds of competing bills come out on this topic, Duffort said, and they are very much still in development.
“However, it seems like the common thread is that everyone wants to look at a tiered system for Act 250, where a version of the status quo would be maintained more or less for most of the state," she said. "Some areas would be carved out for complete protection and then some areas would see a pullback in Act 250 review.” Where those lines will be drawn is where the debate is going to occur.
Broadcast at noon Monday, Feb. 6, 2024; rebroadcast at 7 p.m.
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