Halfway Point: Taking Stock of the Legislative Session and Vermont’s Affordability Challenges

March 21, 2025

Halfway Point: Taking Stock of the Legislative Session and Vermont’s Affordability Challenges

With crossover complete, the Vermont Chamber advocacy team provides a comprehensive status update on Vermont’s most pressing affordability issues—education and property taxes, housing, healthcare, and business cost and regulation. Early measures in education and property taxes show promise in easing financial pressures, while proposed reforms in housing and healthcare remain under review amid evolving priorities. Key issues are summarized below.

Education Finance and Delivery

Following an average property tax increase of 14% last year, Vermont’s education finance and delivery system has reached a critical inflection point. With a clear focus on progressivity, transparency, and local control, the Legislature is examining the Administration’s proposals, which aim to address nearly every aspect of the current education finance framework—from how property tax credits are calculated to new measures designed to reduce disparities among school districts. However, significant questions remain regarding the potential for cost containment and the methodologies that will be employed to achieve it.

Yield Bill Passes Ways and Means: Curbing Property Tax Hikes: The House Ways and Means Committee passed the yield bill (9-2-0), proposing a uniform change to both non-homestead and homestead property tax rates for the upcoming fiscal year. The bill uses the one-time $77.2 million general fund transfer proposed by the Administration to buy down the property tax rate to an average increase of 1.1% versus the 5.9% increase that would have been realized without the transfer.
Education Reform Gets More Time: Due to the complexity of education reform—covering proposed changes to district sizes, funding, governance of Centers for Technical Education (CTE), prekindergarten, and a potential shift to a foundation formula—lawmakers are expected to take additional time beyond the standard crossover deadline. These decisions will ultimately determine whether cost containment can be achieved this session.

Housing

The continued lack of affordable housing is making living in Vermont more challenging for workers and families. Thoughtful reforms—such as streamlining permitting, encouraging higher-density and mixed-use developments, and revising financing mechanisms—are needed to help stabilize prices, support community resilience, and increase housing output.

Housing-Focused Infrastructure Financing Gains Momentum: Public infrastructure remains a major barrier to housing development. A housing-focused version of the long-proposed project-based Tax Increment Financing (TIF) program has gained momentum in the Senate, alongside a bond bank program designed to extend and enhance water and sewer service capacity for housing in municipalities.
Middle Income Programs Get Policy Approval; Budget Approval Pending: Programs designed to bridge the financing gap for housing developers or homebuyers have received support in policy committees, although the final budget for these initiatives has yet to be determined.
Act 250 Appeals Study Expedited: The timeline for a study on Act 250 appeals was expedited to allow the Legislature to develop policy proposals in time for the next session.

Healthcare

Commercial healthcare premiums have increased by double digits over the past three years while healthcare providers continue to face staffing and funding challenges in delivering the access to care communities need; 45% of respondents to the Vermont Chamber’s Business Climate Survey have adjusted their benefits in response to rising costs—with smaller businesses feeling the impact the most.

Reference-Based Pricing: Reforms Under Consideration to Curb Costs: In efforts to control costs, the Senate is moving forward with a proposal to implement reference-based pricing (RBP) before phasing in global hospital budgets.
New Law Unmerges Markets, Double-Digit Premium Increases Likely: In a swift legislative move, Vermont’s Legislature permanently unmerged the individual and group healthcare markets—a measure signed into law by Governor Scott—to shield small businesses from the higher costs of the individual market. However, the path to addressing the underlying cost drivers remains unclear and another year of double-digit increases may be unavoidable.
Workforce and Demographic Challenges: Further Action Needed: While current programs remain essential, little progress has been made in developing solutions to address the growing staffing shortages and demographic shifts impacting the healthcare system. Additional proactive measures are needed to ensure long-term workforce sustainability and maintain access to quality care.

Vermont’s Business Climate

The Vermont Chamber’s Business Climate Survey revealed a stark reality: respondents consistently voiced frustration with Vermont’s business environment, citing rising operational costs, regulatory hurdles, and a lack of workforce availability. The Vermont Chamber’s focus remains aligned with what Vermonters expressed at the polls in November—addressing affordability, spurring economic growth, and tackling Vermont’s toughest challenges head-on.

Military Retiree Pension Exemption Ignored: Despite strong bipartisan support in the House and Senate, legislation that would exempt the pensions of military retirees and survivor benefits from taxation has not been taken off the wall, leaving Vermont as the second least desirable state for military retirees. Vermont’s veteran population is declining at a rate of 2.7% annually, compared to a national decrease of 1.6%.
Balanced Comprehensive Data Privacy Gains Traction: A Comprehensive data privacy bill has received unanimous committee approval as it moves through the Senate. While compliance with this law will carry costs, the bill aligns with data privacy standards in other New England states and avoids exposing businesses to costly legal fees by excluding a private right of action.
Electricity Rate Increases: Two Senate committees have advanced a bill that is raising serious concerns due to its potential to increase electric costs for ratepayers.
New Business Taxes and Fees Off the Table for Now: While new and increased taxes were front of mind last year, tax increases targeting Vermont businesses have been off the table thus far.

Looking Ahead: What’s Next for Affordability Policy?

As the Legislature moves into the second half of the session, many of these affordability proposals will face significant hurdles in securing final approval and funding, and things can change dramatically as bills move from one chamber to the other. Proposals that seemed settled in one committee may be completely rewritten or stalled as they face new scrutiny and ideology. Several efforts to deliver some form of affordability remain in play, but competing priorities and budget constraints will shape what ultimately moves forward. Adding to the uncertainty, federal funding fluctuations could impact healthcare, infrastructure, and workforce programs, forcing lawmakers to make difficult trade-offs. The Vermont Chamber will remain engaged at every step, ensuring that affordability remains at the forefront as these critical policies take shape.

March 21, 2025

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Building Vermont’s Tomorrow: Tackling Affordability, Housing, and Economic Challenges

March 10, 2025March 7, 2025

Building Vermont’s Tomorrow: Tackling Affordability, Housing, and Economic Challenges

As Town Meeting break concludes and the Legislature prepares to return to Montpelier next week, the stakes have never been higher. Vermont’s economic and legislative landscape is at a critical juncture, and this special edition of State to Main highlights the progress, challenges, and opportunities that lie ahead for our state’s economy. The Vermont Chamber’s focus remains aligned with what Vermonters expressed at the polls in November—addressing affordability, spurring economic growth, and tackling Vermont’s toughest challenges head-on. In a time when rising costs in critical areas like education finance, housing, and healthcare are straining families and businesses, our commitment to thoughtful, data-informed progress is more essential than ever.

The Stakes: Navigating Demographic Realities

Vermont’s unique character is our greatest asset, yet our demographic trends demand urgent attention. Since 2000, our population has remained relatively stagnant while shifting dramatically toward an older demographic. More than one-fifth of Vermonters are 65 or older, and over 35 percent are already past 54—the age when many exit the workforce. With the state recording the lowest fertility rate in the nation and retaining only about 43% of its college graduates, we have experienced negative net migration from 2010 to 2020. Our high dependency ratio further underscores the mounting burden on an increasingly dwindling economically active population. Compounding these challenges is Vermont’s fiscal environment—ranking as the third-highest state in the nation for tax collections per capita. With property and individual income taxes as our largest revenue sources, families and businesses are increasingly strained by limited housing options and rising costs. To reverse these trends, Vermont must add an average of 13,500 workers annually over the next 10 to 15 years. The Vermont Economic Action Plan sets a bold, necessary target: expand our population to 802,000 by 2035. This growth isn’t for its own sake; it is essential to revitalizing our communities, strengthening our tax base, and ensuring every Vermonter benefits from a vibrant economy.

Housing: The Cornerstone of Prosperity

Our housing market paints an equally urgent picture. Vermont once built housing at a brisk pace, but in recent decades, production has slowed dramatically. According to a statewide needs assessment, we require 36,000 new housing units by 2029—translating to about 7,200 new homes annually over the next five years—to adequately meet demand. Yet, last year, only 2,500 units were permitted, highlighting a critical shortfall. Without significant intervention, our housing shortage will continue to drive up prices, placing a severe financial burden on families and stifling community resilience. Addressing these barriers—by streamlining permitting processes, incentivizing higher-density and mixed-use developments, and revising financing mechanisms—is essential if we are to triple our housing output over the next decade. Relying on quick fixes will only mask the problem; real, sustainable change demands that we tackle outdated housing production models and systemic fiscal pressures at their core.

A Call to Action: Embrace Abundance

Vermont’s future is a choice between two distinct paths. One path leads to rising costs, diminished public services, and a stagnating economy—a future defined by scarcity. The alternative is a future of abundance, where strategic growth cultivates a thriving business climate, robust public services, and affordable living for all Vermonters. While quick fixes may seem appealing, they fall short of creating sustainable change. Real progress requires us to confront the root causes of our challenges—demographic shifts, outdated housing production models, and systemic fiscal pressures—through honest conversations, shared commitment, and a willingness to embrace compromise. Only by addressing these underlying issues can we create lasting solutions that secure Vermont’s economic future.

Now, more than ever, our collective future depends on embracing a growth mindset—one that moves beyond partisan divides to unite us in pursuit of a more affordable and sustainable Vermont. The data is unequivocal: Vermonters overwhelmingly support policies that promote growth and opportunity. The road ahead may be challenging, but with bold action, informed strategy, and a unified vision, our future is abundant. Let’s work together to ensure that Vermont remains a place where businesses thrive, communities prosper, and every individual has the opportunity to succeed.

Member-Driven, Data-Informed: Shaping Vermont’s Future

Our work is both member-driven and data-informed. Thoughtful, evidence-based policies are key to reducing costs, growing our economy, and creating opportunities for all Vermonters. The data visualizations below highlight critical trends—from housing shortages and demographic shifts to escalating healthcare costs—that underscore the challenges we face. At the Vermont Chamber of Commerce, we know that these issues do not rest on the shoulders of any one party, organization, or community alone. By collaborating and using data as our guide, we can advocate for solutions that make a real difference for every Vermonter.

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Healthcare Reform Takes Shape

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Healthcare Reform Takes Shape

The Senate Health and Welfare Committee is considering significant healthcare reforms aimed at increasing access and affordability. The legislation calls for a statewide healthcare delivery plan, directing the Green Mountain Care Board (GMCB) and the Agency of Human Services (AHS) to identify ways to expand access, reduce administrative burdens, and address service gaps. Business groups and insurers support this effort, provided it builds on existing planning structures and remains practical, cost-conscious, and transparent.

Strategies to create a centralized clinical and claims data system to improve efficiency and collaboration are also part of this plan. However, ensuring comprehensive Medicare data integration, quality, continuity, and cost-effectiveness before implementation remains vital.

The committee is also considering hospital budget oversight and payment reform, directing the GMCB to explore reference-based pricing (RBP), a model that ties commercial hospital rates to a percentage of Medicare prices. Stakeholders have expressed concerns over this transition, highlighting the need for both hospital and payer input, phased-in implementation, and safeguards against unintended consequences.

The inclusion of total cost of care targets and global hospital budgets has prompted calls for alignment with existing models and additional resources to maintain access and quality. Concerns remain about implementation without a federal agreement on Medicare payments and ensuring rural hospitals remain financially stable.

The bill also expands the GMCB’s regulatory authority and staffing, allocating new funding to the board rather than reallocating existing resources. Some stakeholders warn that the proposal could lead to rigid mandates, tying hospital service reductions directly to lower health insurance premiums.

While insurance rates are not the primary focus of this bill, lawmakers hope these system reforms will ultimately help control costs and increase efficiency in the healthcare system. The Vermont Chamber continues to advocate for solutions that promote affordability, sustainability, and limit regulatory burden for Vermont employers and employees.

February 28, 2025

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Healthcare Rises to Top, but the Roadmap to Solutions Remains Unclear

January 31, 2025

Healthcare Rises to the Top, but the Roadmap to Solutions Remains Unclear

Last year’s staggering 19% increase in commercial health insurance rates remains top of mind for businesses as affordability priorities are debated in Montpelier. These rising costs have compounded challenges for employers already struggling to absorb double-digit increases in property taxes, the payroll tax, and a variety of new regulations from the past year.

Following Governor Scott’s budget address, Speaker Jill Krowinski emphasized healthcare as a critical factor in the affordability conversation that requires action this year. This week, a new coalition, VHC911, emerged, calling on the legislature and administration to address healthcare reform. At a press conference, the group highlighted Vermont’s commercial insurance costs compared to neighboring states but did not propose specific policy solutions. If the current state of housing and education finance has made anything clear, it’s that inaction on growing issues can lead to dire consequences.

As the House Health Care Committee and Senate Health and Welfare Committee explore solutions, several opportunities for progress remain. Legislators, administration officials, and healthcare leaders must collaborate to develop a balanced reform plan. Additionally, bold and innovative workforce solutions are needed to address the demographic and labor shortages affecting not only healthcare but all industries in Vermont.

As discussions continue, the Vermont Chamber will advocate for solutions that balance affordability, access, and sustainability in Vermont’s healthcare system.

January 31, 2025

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Small Group and Individual Health Care Markets to Remain Unmerged

January 24, 2025January 24, 2025

Small Group and Individual Health Care Markets to Remain Unmerged

The House Health Care Committee has taken a critical step to protect small businesses from absorbing the higher costs associated with the individual health insurance market by ensuring the small group and individual markets remain permanently unmerged.

This issue has been a focus of the Vermont Chamber for several years. In prior sessions, the Vermont Chamber helped advocate for the markets to remain unmerged, as long as enhanced federal subsidies were available to stabilize the individual market. With those subsidies set to expire in 2025, the markets were scheduled to merge this year, which would have resulted in even higher premium increases for small businesses.

Testimony from the Department of Vermont Health Access, health care organizations, and the Vermont Chamber emphasized the importance of maintaining this separation. Keeping the markets separate helps protect small businesses from potential rate increases caused by the individual market, providing an upside in an otherwise difficult year for health insurance premiums.

The committee unanimously supported H. 35, which codifies the unmerged markets. Their swift action demonstrates a strong commitment to protecting Vermont’s small businesses and their ability to offer quality health insurance.

The Chamber will continue monitoring the progress of H. 35 through the House and into the Senate, advocating for solutions that support Vermont’s business community. Though this is an important step, a considerable amount of work remains to be done do if health care costs are to be addressed this year.

January 24, 2025

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Op-Ed: The Vermont Chamber’s 2025 Legislative Priorities

January 2, 2025January 2, 2025

Common Ground: Working Together to Address Vermont’s Affordability Crisis

Each year, the Vermont Chamber of Commerce outlines our legislative priorities with one focus in mind: creating the conditions to advance the Vermont economy. This year, our goals align closely with those voiced by Vermonters at the polls: addressing affordability, fostering economic growth, and doing the hard work to solve Vermont’s toughest challenges.

Affordability is at the forefront of these challenges. Vermonters are grappling with rising costs, driven by demographic pressures and systemic issues in areas such as education finance spending, housing, and healthcare. Based on data compiled by the Vermont Futures Project, our state must add an average of 13,500 people to its workforce annually through 2035 to keep the economy thriving in the face of demographic shifts. Meanwhile, meeting current housing demand will require tripling Vermont’s housing output to produce 36,000 new units by 2029.

Addressing this level of need is even more pressing given Vermont’s ranking as the third-highest state in the nation for tax collections per capita, according to the U.S. Census Bureau. Property and individual income taxes remain Vermont’s largest sources of revenue—placing additional stress on families and businesses already struggling with limited housing options and rising costs. While band-aid solutions might feel appealing, real progress requires honest conversations, a shared commitment, and a willingness to embrace compromise. We need solutions that tackle the root causes, not just the symptoms.

Last year’s success in modernizing Act 250 demonstrated how stakeholders with historically opposing sides commit to working together, and in doing so, real progress can be made—even when the process is challenging and compromises are required. By remaining fully engaged and working through disagreements, participants honored diverse perspectives and paved the way for continued collaboration, providing a blueprint for how to accomplish meaningful change. This model of purposeful engagement—where people listen to different viewpoints, set aside rhetoric, and remain focused on shared goals—must be a cornerstone of how we move forward in Montpelier and beyond. As we look ahead, whether in the State House, the boardroom, or around the kitchen table, we must prioritize this spirit of cooperation to address our affordability crisis and build a stronger future for businesses and communities across the state.

The Vermont Chamber is committed to playing an active role in this process. We will advocate for thoughtful, data-driven policies that reduce costs, grow our economy, and create opportunities for all Vermonters. Vermont’s challenges, from housing shortages to healthcare costs, do not rest on the shoulders of any one party, organization, or community. Making meaningful reforms will require all stakeholders—legislators, administration officials, advocates, businesses, and individuals—to engage in difficult conversations and embrace compromise. Only through a shared sense of responsibility—and shared accountability for the outcomes—can we create the conditions for inclusive and forward-thinking problem-solving. Blame and partisanship must give way to open-minded discussion and creative ideas that improve Vermonters’ lives.

As we begin the new legislative session, the Vermont Chamber calls on our leaders to remain engaged in discussions, continue the dialogue, and keep conversations focused on results. It’s time to move beyond rhetoric and engage in the real work of making Vermont more affordable and sustainable for all. By doing so, we can ensure our state’s economy remains vibrant, our communities remain livable, and our future remains bright.

January 2, 2025

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Vermont’s Regulatory Environment and Aging Demographics Add to Growing Cumulative Impacts Facing Vermont Businesses

Health insurance providers have submitted commercial rate increase proposals to the Green Mountain Care Board for 2025. Blue Cross Blue Shield of Vermont is requesting a 24% increase, while MVP is seeking a 9% increase. These proposals follow two consecutive years of double-digit rate hikes, creating an unsustainable financial burden for Vermont’s businesses and their employees.

For businesses already struggling with numerous financial challenges, including supply chain disruptions, a new payroll tax, significant property tax increases, inflation, and labor shortages, these additional health care cost pressures are part of a bigger cumulative impact pushing some companies to a breaking point.

The rising cost of healthcare and insurance in Vermont is driven by several factors, including increased utilization, higher prescription drug costs, staffing challenges, and other economic pressures. The 65+ demographic uses healthcare services at a much higher rate, and with 100,000 Vermonters expected to join this age group in the next decade, costs will continue to rise.

Addressing Vermonters’ healthcare needs affordably is a complex challenge without easy solutions. Regulators will need to carefully review hospital budgets and insurance rates while considering the burdens businesses are facing. If implemented, these proposed insurance increases would exacerbate existing hardships and harm the economic health of our state. Health care coverage is a crucial component of the wage and benefit packages employers offer. As insurance premiums rise, employers face the tough decision of trying to absorb these additional costs or passing them on to employees; neither option is desirable.

The Green Mountain Care Board is accepting public comment on these rate increases. We encourage you to submit your feedback here.

July 26, 2024

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Businesses Face Double-Digit Health Insurance Rate Hikes

Following a public comment period, the Green Mountain Care Board has approved reduced rate increases for health insurance plans. BlueCross BlueShield group rates will rise by 13% while MVP will rise by 11.5%. This cost increase will weigh heavily on the cost burden of small businesses. A review of hospital budget proposals is expected from regulators in the coming weeks.

Looking ahead, the Vermont Chamber is already anticipating 2025 when the issue of re-merging the small group and individual markets will be back on the table in the legislature. Stakeholders will have to fully understand what re-merging the market would mean financially to small businesses that represent only 6% of the health insurance landscape.

August 18, 2023

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Tax Hikes to Fund Childcare and Paid Family and Medical Leave Include Corporate Income, Personal Income, and Payroll

April 21, 2023

Tax Hikes to Fund Childcare and Paid Family and Medical Leave Include Corporate Income, Personal Income, and Payroll

The House Ways and Means Committee unveiled a plan for doubling state funding for the childcare system by increasing the top corporate income tax bracket rate to 10% and increasing all personal income tax brackets by 0.5%. Testimony from the Joint Fiscal Office detailed how the corporate and personal income tax hikes would fund the $100 million expected annual cost. These increases would be in addition to the 0.55% payroll tax that the committee passed to pay for an expansive paid family and medical leave program.

If passed, the legislation would establish Vermont as having the highest corporate tax in the nation and would apply to the 2,000 Vermont businesses with a net income of over $25,000. This comes only a year after the legislature made changes to the corporate tax system that benefits corporations that have a Vermont-based workforce. This proposal would wipe out those benefits with a higher corporate tax rate. Changes to corporate income structure multiple times in a short period would further exacerbate what is already an unpredictable business climate.

The House Human Services Committee previously passed the bill out of committee by a vote of 10-1. Notably, the parental leave provision passed by the Senate was removed from the bill.

April 21, 2023

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A Rare “Win-Win” For Small Businesses, State, and Vermonters

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A Rare “Win-Win” For Small Businesses, State, and Vermonters

The Vermont Chamber continued its testimony in support of healthcare legislation that would keep the small group market separated from the individual market throughout 2025. S.54 would ensure small businesses benefit from not shouldering the added weight of subsidizing premiums for the individual market, the state wins by accessing more federal funds, and individuals benefit from additional subsidies. The bill was voted out of the House Health Care Committee and is expected to be on the House floor next week. While S.54 is considered a win-win, the Vermont Chamber reminded legislators that this bill does not address the root problem.

The problem of cost-shifting will remain in the years ahead and stakeholders will have to return to the table later to fully understand what re-merging the market would mean financially to small businesses that represent only 6% of the health insurance landscape. The Vermont Chamber will remain engaged to ensure policymakers work towards a plan that ensures small businesses do not get burdened with the full cost of holding the individual market harmless in 2025.

March 31, 2023

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