Amy Spear

The House Ways and Means Committee reviewed the findings and recommendations of the recently-released report from the Unemployment Insurance (UI) Study Committee. There is interest in increasing weekly benefits by raising the minimum and maximum amount a recipient can collect, which the Vermont Chamber is concerned could draw down funds from the UI Trust Fund at an unsustainable rate. There is also an effort to pay for extra benefits for recipients, administrative costs, or system modernization. The Vermont Chamber is concerned about increasing taxes and new fees for employers, especially now as many are still struggling with the ongoing impact of the pandemic. Also, of concern for businesses is increasing weekly UI taxable wage base as the labor shortage continues to negatively impact business recovery. The Department of Labor is also constrained by the 1970s-era mainframe computer system and its legacy programming language, which the slightest adjustment could crash entirely. After routinely crashing under the strain of unprecedented UI claims during the pandemic, it’s clear that IT modernization must be a priority before implementing any policy changes.

The Senate Finance Committee discussed S.53 which proposes changes to corporate income tax . Included is an increase to the minimum corporate income tax rates, making it significantly more progressive for all but the smallest C Corporations. Other provisions in the bill, including a move to a single sales factor, could lower tax liabilities for C Corporations. Without the inclusion of the alternative minimum tax proposal these changes are expected to be close to revenue neutral, largely benefiting C Corporations with a physical presence in Vermont that sell out of state.

This bill also includes an amendment to create a far-reaching cloud tax, a perennial issue that the House supports but has traditionally run into opposition in the Senate. Preliminary analysis suggests the Senate will not be favorable to this new tax again this year, especially since State revenues up and there are significant federal funds to fund programs. The Vermont Chamber has successfully opposed this tax each of the last five years.

The Senate Judiciary Committee reviewed S.180, which would address organized retail theft by making a string of larcenies or misdemeanor retail thefts within a 6-month period a new category of felony if committed in coordination with another person. With businesses short-staffed and struggling to hire loss prevention and security personnel, some retailers are asking the Legislature for relief. Several downtown Burlington business owners and loss prevention professionals described the same individuals and groups stealing from them repeatedly, sometimes multiple times per week, and a pattern of escalating aggression and violence toward employees over the past several months. Hesitation among some legislators hinged on whether elevating this crime to a felony would sufficiently deter theft for those with no expectation of being caught and charged with a crime. The Vermont Chamber supports retail businesses as this legislation is considered to address organized theft in Vermont’s downtowns. If you are a retail business experiencing rising theft, contact the Vermont Chamber lobbying team.

The Senate hosted a roundtable with industry leaders to discuss housing issues, specifically the importance of removing barriers that prevent production of housing units quickly. The Vermont Chamber’s suggestion to incentivize the conversion of unused commercial space into housing was emphasized in the conversation as a potential new solution. In the House, funding for housing for the missing middle-income development pilot program stalled with committees looking for more details on how this program would work. The Vermont Chamber has advocated for funding of this pilot program, the first to focus on the need for middle income housing and will support efforts for the Senate to put this program back into this bill.

After years of stalled attempts to modernize Act 250, the 50-year-old land use law, legislators and advocates seem hopeful that this could be the year, though the path toward modernization is unclear at this point. This week, two bills that emphasize housing development were reviewed. Both bills would change how Act 250 is applied in designated downtowns and Neighborhood Development Areas and reduce Act 250 responsibilities for developers, while creating additional work for municipalities beyond the designations that they have already received. The Vermont Chamber will continue to advocate for Act 250 modernization that will reduce redundancies for all parties and make permitting more predictable and less costly.

The Vermont Chamber testified in the Senate Economic Development Committee in support of creating a statewide short-term rental (STR) registry. The testimony referenced Vermont Futures Project research and noted that the STR market and Vermont’s housing shortage must be part of the same conversation. The Committee revisited S.79 and discussed a new bill, S.210, which seeks a path to compromise by addressing some of the concerns outlined in Governor Scott’s S.79 veto message. Both bills address rental housing health and safety and contain provisions to create a short-term rental registry. A registry would serve as an important step to ensure a safe rental environment by providing an avenue for communication and data collection. Read the Vermont Chamber’s testimony here.

Congressman Peter Welch joined Vermont Chamber members for a conversation about how Vermont can leverage federal funding to build the economy of the future. The Congressman discussed the impacts COVID-19 has had on businesses and empathized with what employers have gone through. The discussion turned to the workforce shortage, with a need for housing, childcare, and infrastructure to attract more people to live and work in Vermont. Julia Birnn Fields of Birnn Chocolates spoke of her business’s success in hiring New Americans, and Sarah Morris of Basin Harbor talked about her challenges in hiring enough seasonal workers without a steady supply of foreign workers. Congressman Welch spoke about the recent increase in the H2B visa program and the Afghan refugees being resettled in Rutland. He will continue to support efforts to bring more workers to Vermont, through visa programs and refugee resettlement. Ruth Ann Pattee of Northern Stage Theater Company asked what provisions for housing may come from federal funds. Congressman Welch discussed the increase in housing prices, the impact from short term rentals on the housing market, and his support of the Build Back Better bill’s funding of tax credits and construction of new housing units. He also affirmed his support for replenishing the Restaurant Relief Funds, which could provide much-needed aid to the at least 581 Vermont restaurants with unmet need. Catch up on this conversation by viewing the recording of the event here.

In his State of the State address, the Governor foreshadowed support for childcare programs in his upcoming budget, specifically referencing changes to the Childcare Financial Assistance program to increase access to quality care and learning. That is one component of helping families with children. Other areas up for discussion this session include emergency compensation and recruitment tools for early childhood educators and funding a Child Care Financing Study. The Governor will also propose a tax relief package focused on retirees, middle-income families and young workers which may create room for discussion on a state-level Child Tax Credit, similar to the federal tax credit that recently expired. The initial proposal would be a $1,200 annual refundable tax credit for children under six with an estimated cost of $58.7 million. How this would be funded in the short-term or long-term has yet to be discussed but the House Committee on Ways and Means appeared poised to pursue this proposal.