VCC_er2021

With two weeks to go before the target May 6 adjournment, the betting pool is in full swing. Those placing bets in favor of meeting the deadline point to the early budget action by the Senate, which sends the $8 billion appropriations bill to conference committee to resolve the differences between the House and Senate versions. Others have guessed a week later because no one likes working on the Saturday before Mother’s Day and college graduation weekend. Then there are the realists, putting their money down on late May due to Governor Scott’s growing list of disagreements with legislative proposals.

In the last few weeks, the Governor has outlined his disagreements with several legislative proposals, including pension reform, economic development investment, tax relief packages, new program spending, a contractor registry, and housing rental registries. He reportedly made an off-camera comment last week that “someone needs to be the adult in the room” referring to his willingness to veto a budget with spending that goes beyond what he believes is fiscally prudent.

This is typical end-of-the-session posturing, much of which will be negotiated to a compromise before the Legislature delivers these bills to the Governor’s desk. For many policy makers already looking ahead to the November election, the summer campaign season provides additional motivation to reach consensus quickly. In previous years, conventional wisdom might indicate that the Governor has this same motivation, but no opponent has yet announced.

If you’re placing bets in the adjournment pool, make sure you understand the difference between adjournment to a date certain and adjournment sine die, the former allowing for the Legislature to return to consider a veto override and the latter being final adjournment. Either way, you can count on the Vermont Chamber’s five-person lobbying team to be working for you in Montpelier right down to the end.

Two proposals have brought the prospect of a cloud tax as a new source of revenue back into legislative conversation. The Child Tax Credit, which would reduce revenue by $48 million, and Universal School Meals, which would need at least an $8 million appropriation from the general fund have both lead to the House and Senate considering a cloud tax. The cloud tax proposal approved by the House last year as part of S.53 would remove a tax exemption on software as a service and would create additional taxes on platform and infrastructure as a service.

If passed into law, consumers and nearly all of Vermont’s businesses that use cloud-based services would see considerable cost increases. This additional financial burden becomes particularly daunting for many businesses still struggling to recover from the pandemic while navigating labor force shortages and supply chain disruptions.

The House Commerce and Economic Development Committee hit the road this week to learn more about the programs they will take up in the Senate’s economic development bill, which is expected to make its way to the Committee late next week. The first stop was the City of St. Albans, where the Committee saw progress in the downtown revitalization projects made possible through tax increment financing (TIF). St. Albans City has utilized TIF to intentionally invest in sustainable development, increase workforce housing, improve public spaces, and attract Main Street businesses to previously vacant storefronts, resulting in a renewed vibrancy in the downtown.

The next stop was the former Energizer plant in St. Albans Town, which Beta Technologies may acquire as a battery testing facility. Beta was approved for a Vermont Employment Growth Incentive (VEGI) to create at least 60 jobs, but likely hundreds, over five years, giving the St. Albans site an edge over competing locations such as Plattsburgh. Later, the Committee stopped by the Northwest Career and Technical Center to get an up-close look at the benefits of career and technical education (CTE). The CTE system has been struggling for decades as the education system pits traditional high schools against technical centers for tuition dollars. Despite repeated legislative study committees and reports over the years, the Legislature has yet to attempt a fix that would allow for growth in the training programs preparing the next generation of workers for the jobs of the future.

Finally, the Committee visited Black Flannel Brewing & Distilling in Essex, a Vermont Chamber member business that opened during the pandemic and, despite all odds, is growing. Founder Chris Kesler testified last week before the Senate Economic Development, Housing, and General Affairs Committee in support of a VEDA forgivable loan program with enough flexibility to accommodate businesses like Black Flannel, which have taken on enormous debt to stay afloat and need support to thrive.

Meanwhile, the Senate Economic Development, Housing, and General Affairs Committee began work on the House’s workforce development bill, H.703. There is a lot to cover in very little time, as legislators anticipate adjournment in May.