Chair Kornheiser Unveils New Tax Package

Chair Kornheiser Unveils New Tax Package

House Ways and Means Committee Chair Rep. Emilie Kornheiser (D-Brattleboro) announced her new tax proposals shortly after the Governor’s budget address. These new taxes come into consideration as businesses and workers will soon feel the $100 million first-ever state payroll tax to be levied starting July 1. This tax proposal is also in tandem with statewide concern for double-digit property tax increases and the confusion around how school spending works.

New taxes that have been introduced include:

  • A wealth tax of 3% aimed at tax filers, filing single or jointly, earning over $500,000.
  • A new personal income tax on unrealized capital gains.
  • Moving to a worldwide combined reporting corporate tax.
  • A cloud tax containing tax on software as a service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).

Raising these taxes will not reduce the tax burden on middle-income Vermonters. To make meaningful progress on improving affordability for middle-income Vermonters we can instead address the root causes of what is making the state unaffordable. The Vermont Chamber will continue to raise concerns about these tax proposals and share with businesses with the potential impact they would have on the Vermont economy in the weeks ahead.

Governor Presents FY25 Budget Focused on Affordability for Vermonters

Governor Presents FY25 Budget Focused on Affordability for Vermonters

Governor Phil Scott delivered his eighth budget address to the General Assembly, presenting a $8.6 billion budget across all funds. The budget focuses on strategic investments, maintaining current services, and sustainable growth without imposing new taxes or fees on Vermonters. The Governor emphasized the need for disciplined budgeting, highlighting organic revenue increases as essential for lasting economic growth. Acknowledging affordability, public safety, and housing challenges, he proposed new initiatives to address each.

Despite unexpected obligations, such as FEMA match payments, the Governor stressed the importance of smart, strategic investments showcased during the post-pandemic period. The budget aligns with fiscal reality, prioritizing fundamentals, and includes ongoing workforce, economic, and community development investments. Governor Scott urged lawmakers to work collaboratively on a balanced approach, encouraging middle-ground solutions that address challenges without burdening Vermonters financially.

Bottle Bill Veto Upheld in Senate

Bottle Bill Veto Upheld in Senate

The Governor’s veto of a bill that would have rewritten the state’s recyclable beverage container redemption law was upheld in the Senate by a vote of 17 in favor to 13 against. A veto override would have required two-thirds to vote in favor. The vote to uphold the Governor’s veto comes despite a Democratic supermajority, signaling the possibility that more controversial policy decisions this session may not be split simply on party lines. The Governor appealed to this “middle majority” in his budget address hours following the vote, stating, “…this Legislature can help Vermont find the sweet spot, where we do the hard policy work and invest in the things that help people, without pushing them further behind, or making it too expensive for young workers to get started here, and without forcing our anchor employers out of state, or ‘Main Street’ mom and pops out of business.”

 

If passed into law, the Bottle Bill would have set a new trajectory for beverage container management and impacted manufacturers, distributors, and retailers alike. The bill had the potential to disrupt existing recycling infrastructure with an increase in handling fees and the required participation in producer responsibility organizations. The widened scope of the bill would have strained current systems, leading to inefficiencies and increased financial burdens on taxpayers.

Work on Crucial Housing Bill is Underway in Senate Committee

Work on Crucial Housing Bill is Underway in Senate Committee

While there seem to be more housing bills introduced this session than housing units being built in Vermont, the Senate Economic Development, Housing, and General Affairs Committee took testimony throughout the week from various stakeholders to inform ongoing work on the “BE Home” bill. Early drafts of this session’s omnibus housing bill include amendments to Act 250, such as the issuance of permits contingent on other approvals and the establishment of new tiers. The proposal also addresses taxation adjustments, introducing modifications like property tax exemptions and sunset clauses for specific tax exemptions. Committee work on the proposed legislation is expected to continue next week to meet the Chair’s expectation of having a bill by early February.

The Vermont Chamber is advocating for solutions that encourage more housing to be built in viable locations, without appropriating large sums of money. In particular, for policy that incentivizes new development in and around our community centers as outlined in the Vermont Natural Resources Board report on necessary updates to Act 250.