Amy Spear

The final bill to pass this session was the $8.3 billion budget, which provides the funding for general government spending and the major policy bills this session. It invested in broadband buildout, childcare providers, and water and wastewater infrastructure to provide communities with the resources they need to attract new workers and families. It provided $50 million for the Vermont Housing Conservation Board, a $20 million investment in the missing middle home ownership development program and manufactured housing, and $20 million for the Vermont Housing Improvement Program to update rental housing units. The budget also allocated a total of $137.8 million in community, workforce, and economic development programs, many of which the Vermont Chamber fought for this session. The budget also included $185 million in energy focused initiatives including weatherization, energy efficiency grants for towns and electrification initiatives. For more budget details, listen to this VPR report.

In the fading hours of the legislative session the omnibus housing bill was passed, a priority for the Vermont Chamber, legislators, and the Governor. Getting to this outcome included difficult negotiations and impassioned speeches to ensure that the meaningful housing provisions could pass without garnering a veto from the Governor, who continually stated his opposition to a change in Act 250 governance included in the House-passed version. That provision is included in S.234 which also passed, but it will undoubtedly be vetoed by the Governor.

Included in the final omnibus housing bill is $15 million for the Missing Middle Homeownership Development program which addresses workforce needs by increasing the supply of housing for middle income earners. There are also funds for manufactured homes, bylaw modernization grants, and an expansion of the priority housing project program. Another housing bill also passed this session and will provide funding to increase the supply of rental units through grants to property owners.

With a high approval rating and little concern for the campaign season ahead, Governor Phil Scott exercised his veto authority on six bills already in 2022, for a record 29 in his six year tenure. In February, he vetoed a contractor registry, a prohibition of firearms in hospitals, and amendments to the Charter of the Town of Brattleboro to allow 16 and 17-year-olds to vote. Just last week he doubled his vetoes, sending back the pension reform bill, amendments to the Charter of the City of Burlington, and the Clean Heat Standard.

The Legislature had the votes to override the veto of the pension reform , but Governor Scott continues to clearly state which of his priorities are non-negotiable. has signaled that if bills come to his desk with provisions he opposes, or lacking sufficient funding for his priorities, more vetoes will follow. As legislators adjourned, leadership chose not to set a date to return to consider further action on vetoes, giving the Governor the final say leading into election season.

The 2022 legislative session occurred amidst the stark reality that Vermont has 26,000 job openings and an unemployment rate of 2.7%. Even if every one of those nearly 9,000 Vermonters were hired today, we would still have just over 17,000 open jobs. Compounded by the fact that 25,500 less people are participating in the workforce than pre-pandemic, it was clear that the foundation for the Vermont Chamber’s advocacy this legislative session had to be addressing our workforce shortage and ensuring businesses weren’t burdened with new laws that would constrain their ability to emerge from the pandemic. The Vermont Chamber succeeded on most of our initial agenda items, including: 

• Retaining Vermont workers with investments in training for workers in the trades, nursing, and mental health fields
• Helping businesses emerge from the pandemic by providing forgivable loans, capital investments, and support for community revitalization and arts organizations
• Increasing workforce housing supply through the Vermont Rental Housing Investment Program and the Missing Middle Homeownership Development Program
• Providing increased tourism marketing to support the hospitality industry
• Expanding the exemption of manufacturing inputs from sales and use tax
• Providing continued savings on health care premiums for small business
• Recruiting new workers to Vermont with a continuation of relocation incentives and exempting military pensions to attract retirees re-entering the workforce
• Avoiding new costs like mandated wages, additional unemployment insurance burdens, and technology taxes

While Vermont businesses will continue to battle the ongoing impacts of the pandemic, including a constrained labor force, higher wages, reduced hours, 8.3% inflation, and endless supply chain problems, progress was made on many fronts due to the increased support of our members and our dedicated five-person Vermont Chamber advocacy team. House and Senate leaders on these issues will head into the campaign season with a strong record of supporting the Vermont Chamber agenda, and the Vermont business community. From our annual Vermont Economic Conference, to our State to Main policy podcast series, to supporting the Vermont Declaration of Inclusion initiative, the Vermont Chamber once again set the tone for making Vermont a better, more vibrant place to live, work, and play.

H.489 is on track to pass both the House and the Senate allowing $17.7 million in health insurance cost savings to be extended to small businesses and their workers for another year. Last year, the markets were separated because there were federal subsidies that protected individuals from rate hikes. The plan was that the federal government would continue those subsidies, but that has yet to happen. Even so, the Legislature approved the continuation of this direction, hoping Congress will act. Meanwhile, there will be a working group to develop state alternatives to continue the practice without harming either group. This effort is especially timely as provider rates are likely to increase for plan year 2023 as has been forecasted in a mid-year review of hospital budgets at the Green Mountain Care Board.

The House and Senate have each passed their own versions of the economic and workforce development bill. A conference committee must now reconcile differences as well as account for the Governor’s priorities that have been excluded. The Vermont Chamber has worked to improve the VEDA forgivable loan program. The House-passed version includes $19 million and more favorable program requirements for small businesses still struggling to recover from pandemic-related impacts, compared to the Senate’s $15 million for the program. In addition, the House-passed version contains $10.2 million for the Capital Investment Program while the Senate-passed version left this out entirely. The House-passed version failed to fund the relocating workers incentives and relocation network and marketing, which the Senate supported with $6 million for incentives for relocating workers and $4.2 million for a regional recruitment and support network. The Governor asked for these programs to attract new workers to move here and grow the workforce.

The Governor has indicated that if the Legislature passes this bill without appropriate support for workforce expansion, which he has repeatedly identified as one of his top priorities, he could veto the bill, sending it back for revision. With over $100 million in the House version and $95 million in the Senate version, there is still a lot in play, and the conference committee is under political pressure with a short timeline to resolve their differences.

The Vermont Chamber will keep fighting for the business priorities that will support recovery and workforce growth. Read more about the differences between the Senate and House versions of the bill in this comparison, prepared by Legislative Counsel, and in this rundown of the spending in the two bills, prepared by the Joint Fiscal Office.

The housing bill, S.226, was back in the House General, Housing, and Military Affairs Committee, as they considered an amendment creating a community partnership for a neighborhood development program. The Department of Housing and Community Development (DHCD) would operate the program and bring together local officials, nonprofit and for-profit developers, and employers, into a council to create a pilot neighborhood development project. The goal of the pilot is to understand and demonstrate how an inclusive partnership model to make targeted investments can support the development of housing in a smart growth area. The program would receive an initial funding of $1 million and, based on a competitive application, a pilot municipality would be chosen to work with DHCD and the council through 2026 to strategically invest funds to create a development-ready framework for new and infill neighborhood development and construction-ready building lots.

The Vermont Chamber has advocated for regulatory and programmatic changes that would incentivize the development of housing for middle income earners to address the workforce shortage impacting businesses. Just doing the status quo isn’t working. New partnerships and programs that involve the business community can generate innovative solutions to stimulate development.

With an eye on the Legislature’s May 6 target adjournment date, the House Commerce and Economic Development Committee combined the workforce development bill with pieces of the economic development bill into a new vehicle, with some notable changes. The VEDA forgivable loans received an additional allocation of $4 million, for a total of $19 million. Many of the technical changes that the Vermont Chamber advocated for will be added, including raising the cap on each loan to $500,000 or six months of operating expenses, eligibility based on a 20% reduction of net operating income, and the removal of language requiring at least 50% of the reduction of operating income to have occurred in 2021. In addition, the Capital Investment Grant Program has been restored, but at only $10.2 million, and $9 million has been allocated for the Creative Economy Grants. Notably from the bill is a minimum wage hike, as well as any relocating worker incentives and marketing funding.

The Vermont Chamber has long advocated for sustained efforts to grow the workforce by recruiting new people to move here to work and raise their families, because there are simply not enough people in the state to fill the jobs available. Unfortunately, the House has yet to realize that recruitment is important, while the Senate continues to support this direction. is still a chance that this important funding could be restored before the bill is finalized, so the Vermont Chamber advocacy team will work to secure this program. This problem cannot wait another year to be addressed, but with legislators intent on returning home to campaign by the end of next week, it seems that the House plan is to wait and hope the problem resolves itself. The demographic trends spell trouble for the workforce, and inaction will only lead to stagnation.