Amy Spear

With broad recognition that no legislative solution can fix the current workforce crisis, the House Commerce Committee reviewed the efficacy of existing government training programs. The Vermont Chamber voiced support for continued funding for the relocation and new worker grants, skills building efforts like the Vermont Training Program and support for second-chance hiring programs.

The testimony also cautioned the Committee that the real problem is the lack of people to fill education and training slots, proposing that Vermont needs a robust and sustained marketing effort to recruit more workers. Creating a message that promotes Vermont as a welcoming place can be demonstrated by the adoption of the Declaration of Inclusion, a statement that 25 towns in Vermont have adopted, the continued support for refugee resettlement initiatives and the passage of removing the tax on military retirement pay.

Vermont does many things well and while housing and childcare issues still need attention, recruiting more people cannot wait.

Governor Scott echoed many of the Vermont Chamber’s priorities in addressing the workforce shortage while presenting his FY23 budget proposal to the Legislature. His approach to increase affordability, attract diverse workers, and address the housing and childcare crises aligns with the Vermont Chamber’s advocacy work. Growing the workforce will require strategic investments in housing, particularly in increasing the available stock for middle-income homeowners, as well as investments in childcare for working parents. His budget funds and expands existing worker relocation programs to include more in-demand occupations and includes the exemption of military pensions from income tax to attract this diverse population to work and live here. The budget proposal also included a $50 million tax cut to improve affordability. You can read the Vermont Chamber’s statement in response to the budget address here.

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.