Amy Spear

The Senate Economic Development, Housing and General Affairs Committee took a deeper dive into the Omnibus Housing Bill, S.226, this week. The Vermont Chamber offered testimony in support of proposals that would increase housing stock for middle income Vermonters, with a focus on the Missing Middle Homeownership Development Program. This program is intended to address the value gap between the cost to build modest homes and the price that middle income families can afford. The program provides a subsidy to lower the price of a home, which would stay in the home in perpetuity with homeowners gaining any additional equity. To illustrate, a developer would spend $400,000 building a home, and the state would subsidize $50,000 so the home can be sold to a middle-income Vermonter for $350,000. The $50,000 subsidy would stay with the home so when the homeowner sold, the $50,000 would either reduce the price for the next buyer or be used to subsidize another home. Some committee members want the State to get back more than its initial investment and leave the middle-income homeowner with a smaller portion of the equity.  However, unlike the State’s shared equity program, the homeowner in this program will put in significantly more money than the State’s initial subsidy and the loss of the ability to build equity will negate the benefit this will have for families. Given the prevalence of ARPA dollars to fund this program, the Vermont Chamber is advocating for this funding as designed, to increase the middle-income housing in the state.

As committees hurried to tie up loose ends before recessing for Town Meeting Day, two major bills dealing with economic and workforce development continue to progress. The Senate Economic Development, Housing and General Affairs Committee devoted less than an hour to the omnibus economic development bill, S.263, focusing instead this week on housing. However, the bill, which contains several Vermont Chamber priorities such as the new relocating employee incentives, is still expected to be finalized before crossover, the legislative deadline for initial passage of a bill. The House Commerce and Economic Development Committee spent significantly more time working through the omnibus workforce development bill, H.703, which includes several Vermont Chamber priorities, such as investments in the CTE system. The Committee is also working to include funding for a program which would allow CTE schools to purchase formerly blighted properties to train their students in construction trades and convert these properties to affordable housing units. The Vermont Chamber is supportive of innovative solutions like this that will train young adults on in-demand skills while increasing the housing stock in the community.

• CTE Funding: H.483, which set out to fix the funding issues that have long plagued the CTE system, has been amended to task the Agency of Education with creating an implementation plan due in July of 2023. The Vermont Chamber is disappointed that that the Legislature, again, has delayed making this a priority. Other portions of the Governor’s agenda on CTE are being discussed as part of the workforce investment bill, H.703.
• Military Pension Tax Exemption for Workforce Recruitment: The Vermont Chamber testified in the Senate Finance Committee in support of fully exempting military pensions for workforce recruitment, retention, and diversity, and to make Vermont more attractive and competitive with other states. Vermont is facing a workforce labor shortage crisis, and the proposed $3.1 million dollar tax expenditure for a full exemption is a small, affordable, timely, and much-needed investment in building our future workforce.

After Governor Scott vetoed a paid family leave program in 2020, advocates regrouped and brought new proposals, which are now working their way through the committee process. The Senate Economic Development, Housing and General Affairs Committee has been working on a Paid Family and Medical Leave Insurance Program proposal in S.65, which would be administered by the State through a private insurance carrier and provide 12 weeks of paid leave per year for parental leave, caring for a family member, or medical leave. Other proposals include a COVID Worker Relief Fund, which is currently part of the omnibus economic development bill. As of now, there is still no bill language available for this section, no cost estimate, and no explanation of how it will be paid for. The Vermont Chamber believes that the best way to support workers getting back to work is to make critical investments in childcare, which is consistently reported as the top concern for parents and caregivers.

Senate Finance dismantled the Corporate Income Tax modernization proposal passed by the House last year, leaving only a $9 million increase in corporate income taxes. Testimony from an experienced tax attorney raised concerns about the Alternative Tax Minimum that led the Committee to remove that section. The Committee also removed the Single Sales Factor, which is the driving component of the bill. Without Single Sales Factor, the bill stands to raise over $9 million in corporate income tax on Vermont businesses, a proposal the Committee knows the Governor will not support. Committee members that help businesses instead of Single Sales Factor which would create a revenue neutral tax proposal.

The House Committee on Commerce and Economic Development took a deeper look at the Administration’s Regional Relocation Network Proposal. The $8.46 million, three-year scope is one of the tools being reviewed by the Legislature to address Vermont’s workforce shortages. The marketing program formalizes and funds existing work, leveraging the regional partnerships developed alongside the Stay-to-Stay Program, which launched in 2019 and dovetails with relocation incentives.

Marketing tactics executed by the Vermont Department of Tourism and Marketing will be geared towards filling the relocation pipeline with leads via broad awareness messaging and targeted efforts to recruit high-demand professions such as nursing, healthcare, and trades. Regions will be resourced to build capacity and nurture leads by creating systems, community storytelling assets, and connecting people with resources.

The Committee will continue examining the proposal and hear from regional organizations. Workforce recruitment and retention remains a priority for the Vermont Chamber, and many committees are working to solve Vermont’s labor shortage. If you have questions or comments on this proposal or Vermont’s workforce shortage, govaffairs@vtchamber.com.

Vermont’s housing crisis continues to be a focus of concern in communities, businesses, and the media. With crossover weeks away, the Senate Economic Housing and General Affairs Committee needs to take on this sense of urgency in review of their Omnibus Housing Bill. In the Committee’s sole morning of hearings on the 66-page S.226 this week, they reviewed a limited number of the proposals. The Vermont Chamber is supportive of provisions in this bill that have been included in the Governor’s budget that will expediate the increase the supply of affordable middle-income homes, such as the Homeownership Development Program.  The Governor’s $70 million housing budget includes this program as well as the Vermont Rental Housing Incentive Program which is part of the Senate-passed S.210, currently sitting idle in the House General, Housing & Military Affairs Committee.

The Senate Economic Housing and General Affairs Committee Chair is in conversation with the Chair of the Senate Natural Resources and Energy Committee, which has been working on a housing and Act 250 proposal, on what will happen between their two bills. Both include provisions originally proposed in H.511 to expand access to the Neighborhood Development Area Designation and the Act 250-exempt Priority Housing Project program. The bill under consideration in Senate Natural Resources and Energy Committee would also expand the jurisdiction of Act 250 with the creation of a new Road Rule. Administration officials stated again this week that the Governor won’t support the bill as is. The Chair does not seem ready to give up on this committee bill and is looking for a path forward.

Details on the formula and process for providing more grants to business are nearly complete with the total appropriation still in question. This program was approved last year to provide $30 million in grants to businesses impacted the most by the pandemic – lodging, restaurants, wedding venues and other places where people congregate. The formula and criteria for awarding these grants was problematic, leaving $26 million still available. The Vermont Chamber is supporting a new effort to deploy these funds which would provide a VEDA loan that could be converted to a grant quickly, allowing more businesses to access relief faster, without taking on more debt. The Vermont Chamber is fighting to transfer the remaining FY2022 appropriation of $26 million to this effort. These issues will be finalized over the next few weeks.