31 Ways Legislative Action or Inaction Could Impact Businesses After This Session
Record-high spending in recent years has been possible due to the influx of one-time federal funding for pandemic relief. However, legislators seem determined this session to maintain record levels of government spending with new revenue sources, even amid historical economic uncertainty. Despite a session underscored by new and increased taxes on both individuals and businesses, several crucial bills that will address business needs also made their way through the legislative process. A full recap of session highlights is available below.
Total cost increases for Vermonters will amount to $150 million. A far cry from the $1 billion in proposals by legislators at the start of the session, this is still an unsustainable figure with an expected economic downturn approaching.*
The first-ever state payroll tax was passed, adding to Vermont’s already high tax burden. Working Vermonters are set to pay $100 million annually.*
Fuel costs could increase by 70 cents a gallon with the creation of the Clean Heat Act, giving the Public Utility Commission two years to create a credit and trade market for renewable fuel sales.
Vermont’s only business incentive program is extended. The Vermont Employment Growth Incentive program was rerouted from legislation that was originally intended to effectively end the program.
Bars are back in business after an outdated state statute was amended which will allow businesses to obtain liquor liability insurance more easily.
Small businesses will not have to shoulder the added weight of subsidizing premiums for the individual healthcare market. The individual and small group markets will remain separated through 2025.
70% of Vermont jobs don’t require a college degree, but no legislative action was taken to address the needs of Vermont’s career and technical education system.
Military retiree pensions will remain largely taxable. The Legislature did not act to leverage a full exemption as a workforce solution.
Data on short-term rentals will have to wait another year. The statewide rental registry proposal was relegated to a study.
DMV fees are set to increase across the board by $20 million.*
Licensure and renewal fees through the Office of Professional Regulation will be increasing for many of Vermont’s regulated professions.
Property taxes are expected to increase by an additional $30 million with an increase in state funding for nutrition programming.*
Over 150 new positions were created within the State of Vermont, amid a severe workforce shortage. This will increase the competition with businesses looking for employees. *
Broadband buildout received $20 million to boost service with over $100 million in the NTIA Middle Mile Broadband Infrastructure Program to expand access to high-speed internet.*
Homeownership remains elusive for middle-income Vermonters, but $10 million of funding in the BAA for the Missing Middle-Income Homeownership Development Program will help.
Employer housing investment opportunities will be created through a revolving loan fund for middle-income renters.
Business infrastructure funding was allocated to local development corporations to the tune of $5 million for business relocation and expansion efforts, including the purchase, demolition, and renovation of property for industrial use.*
Rural infrastructure capacity funding of $3 million is slated to help underserved communities access and allocate federal ARPA funding for projects.
Child Care Financial Assistance Program (CCFAP) funds will be available to use regardless of provider STARS rating, increasing access to the subsidies.*
Expedited smart growth housing development will be possible due to an omnibus housing bill that reduces local zoning barriers and expands Act 250 exemptions.
A Trump-era tax on business was upheld, with the workaround derailed in the final days of the session. The State and Local Tax (SALT) cap deduction workaround was a fix that was estimated to bring $1.7 million in state revenue annually and would have saved Vermont businesses $20 million in federal taxes.*
Advanced manufacturing businesses will be able to send workers to Vermont State Colleges for a certificate in 3-D technology from a $1.5 million appropriation.*
Young professional recruitment efforts will get a bump with $1.5 million towards loan forgiveness for recent college graduates who commit to working in Vermont for two years following graduation. Each eligible student is set to receive up to $5,000.*
Refugee employment assistance earned $1 million of funds allocated to the State Refugee Office for the Employment Assistance Grant Program.*
Efforts to upskill workers received $1.5 million to educate Vermont residents seeking to transition to a new career or to enhance job skills through the University of Vermont’s Upskill Vermont Scholarship Program.*
Technical assistance funding of $1.25 million was provided to the Regional Development Corporations to provide small and mid-sized businesses with professional and technical assistance. *
Brownfield remediation projects will get another $8 million in funding for the assessment, remediation, and redevelopment of sites.*
Upward pressure on system costs is expected from increases in worker’s compensation and temporary partial disability benefits.
The Treasurer’s Office will create a state-run retirement program by 2025 for employees of Vermont businesses. The program will put 5% of an employee’s earnings into an IRA but includes an opt-out provision.
A 100% raise for legislators will see pay and benefits double for members of the House and Senate. This was done, in part, to entice more people to run for office. Any takers? *
* Legislation related to these topics remains in play and is pending final action from the Legislature. While the fate of most items can be anticipated, there is a caveat that these issues remain in flux until the veto session.
