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Advocacy Update – Week 16 – 2025

Lake Champlain Chamber News and Press Advocacy Update Legislative Updates Advocacy Update – Week 16 – 2025

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May 2, 2025

The first of May usually brings a sense of optimism for those working in the State House, as the end of the session is just around the corner; however, this year, it seems to have brought a sense of dread, as everyone gears up for what will be four more weeks of legislating. 

In this odd year, the budget isn’t going to dictate the adjournment timeline, and instead, it will be the education transformation bill. 

  • We’ll have more on the education bill next week, as the Senate Education Committee will be working late into the afternoon today to finalize their portion of the bill and send it over to Senate Finance. 
  • The Senate version looks to be a dramatic rewrite of the legislation sent to them by the House. 

In this week’s update: 

We strive to make these concise and easy to read. Feedback is not just welcomed, it’s encouraged – [email protected] 

Senate Advances FY26 Budget, Understanding Funding Will Be Cut Back in Final Negotiations 

The Vermont Senate passed its $9.01 billion budget for FY2026 on Thursday. The bill includes more base spending than either the House or the Governor proposed; however, Senate leaders know reductions are coming as they head into the final negotiating phase with the House and the Governor. 

  • Committee of Conference members has already been appointed to hammer out the final version. 

Early budget / Late session: Usually, when the budget is done, so is the session; however, that won’t be the case this year. 

  • With Democrats no longer holding a veto-proof majority, Democratic leaders seek to finalize the budget early to avoid a budget showdown amid an already-contentious education transformation bill showdown at the end of the session.

Zoom in:

  • Spending delta: The Senate’s plan includes ~$50 million more in base spending than the Governor’s proposal and $20 million more than the House.
    Child care split: The Senate budget maintains $19M in General Fund support for child care subsidies, resisting the Governor’s proposal to scale back now that a payroll tax is yielding more revenue. It also creates a $5M reserve and boosts funding for infants and toddlers.
  • Federal cliff prep: new contingency plan language empowers the Secretary of Administration and the Joint Fiscal Committee to manage moderate federal funding losses, including limits on cuts, transfers, and temporary use of reserves. 
    • The House sent the Senate similar language previously (LINK) 
  • Buying down property tax: this budget includes sending general fund dollars to the education fund for a $77 million buy down of property taxes from a 5.8% to 0.8% increase, as was done in the yield bill sent to the Senate and concurred with by the Senate Finance Committee this week. 

Get Granular: The Senate Budget, 

  • Ties Vermont’s nonprofit tax-exempt status to federal law as of April 1, 2025, regardless of future federal changes.
  • Fences off revenue for a military pension tax exemption, though enabling legislation hasn’t passed.
  • There is no miscellaneous tax bill this year, and the Budget Adjustment Act (BAA) was vetoed multiple times this year, so the Big Bill includes several tax policy adjustments that would often be in a miscellaneous tax and carryovers from the mid-year Budget Adjustment Act. 
  • The Senate also restores partial funding to operate the International Business Development Office in Montreal, which was cut by the House. 
  • In perhaps one of the few public safety asks crossing the finish line this year, State’s Attorneys are getting some of the temporary positions given to them last year converted to permanent positions. 

What’s next: A House-Senate conference committee is expected to begin work Friday. Lawmakers anticipate trimming positions and spending to land a compromise budget that can win Governor Scott’s approval and avoid a veto.

See more budget highlights here

Federal Backdrop and Waiting for the Other Shoe to Drop…

  • Congressional Republicans have a new deadline for the budget they will pass using the budget reconciliation process, they are calling the “one big beautiful bill.” 
  • Something else big happens just four days after that deadline, the end of the 90-day pause on reciprocal tariffs. 
  • Deadlines are often deadlines to make new deadlines; however, with tariffs and the debt ceiling looming, the GOP will need to make this deadline.
  • Today, the President is rolling out his budget, and a better view of how that works should be clearer from the US House Ways and Means Committee by May 8th, to get something through the House in the next three weeks. 
  • That said, cracks are forming in the ranks, with about a dozen GOP lawmakers pushing preemptively back on cuts to Medicaid, clawbacks to the Inflation Reduction Act clean energy tax credits, and pushing to lift the SALT cap to $25,000. 
    • All of these are blue state priorities, too; however, as we covered earlier in the session, the GOP “majority makers” from traditionally Democratic  districts feel they need these things to be safe in the midterm elections.

Budget Almost Becomes a Battleground for Climate Policy Debate 

As the Senate passed its version of the FY2026 state budget, it also became the stage for a high-profile, and ultimately unsuccessful, push to unwind key climate policies.

What happened: Senate Minority Leader Scott Beck proposed three amendments to the “Big Bill” aimed at scaling back Vermont’s climate commitments:

  1. Repeal the Clean Heat Standard,
  2. Repeal the provision of the Global Warming Solutions Act (GWSA) that allows the state to be sued for failing to meet mandated emissions reductions, and
  3. Delay the implementation of California’s electric vehicle rules, which require increased EV sales starting in 2026.

Neither amendment got a full vote. Lt. Gov. John Rodgers ruled them “not germane” to the budget bill, echoing concerns from Senate leadership about proper process.

  • Beck tried to suspend the rules to force consideration, but both efforts were defeated on party-line roll calls.

Meanwhile in Washington: Congress is weighing repeal of the federal EPA waivers that allow states like Vermont to adopt California’s clean vehicle rules.

  • Congress passed measures to revoke rules on clean trucks, clean cars, and other emission standards, which will need to be voted on in the US Senate. 
  • Even if the legislation goes into effect, legal questions remain about whether these waivers can be overturned under the Congressional Review Act.

Back in Vermont:  The Advanced Clean Trucks rule is still scheduled to take effect next year, requiring 10% of new medium- and heavy-duty vehicles to be zero-emission by 2026, scaling to 50% by 2030.

  • But Vermont only has 32 such trucks today, and they are often 2.5x more expensive and not suited for key uses like plowing or logging.

Why It Matters:  Medium- and heavy-duty trucks, from farms to fire departments, are vital to Vermont’s economy. Critics warn the rule may choke access to diesel vehicles before electric alternatives are viable, costing Vermont millions in registration revenue to neighboring states.

  • Without action in Vermont to relax the rules or legislation from Congress, followed by a definitive legal ruling, which could take years, auto dealers and manufacturers will need to start complying soon. 

Chipping Away at the Final CHIP Version and More Housing   

The House and Senate continue their trajectory to a committee of conference for their respective housing bills, with the crucial cruxes being infrastructure financing and appeals. 

Poison pill? Before we get into the meat of the bill, it is worth highlighting a potential anchor on the bill in the form of language that prohibits landlords from requesting Social Security numbers during the rental application process. This language will make the bill more controversial and could hold back other elements. 

Community Housing and Infrastructure Program 

The House Committee on Commerce and Economic Development, Committee on Environment, and Committee on General and Housing all have spent the week refining and walking through CHIP, preparing it for its last and most highly anticipated stop, the House Committee on Ways and Means. 

  • Ways and Means spent the week reviewing the TIF program to get a better sense of tax increment financing to date in the state, to be ready for the CHIP discussion next week. 

Primary residency provision: language in the bill that would limit the program to primary residents became a point of controversy this week, as the language amounted to a restrictive covenant that could limit the resale value of a property and restrict financing options. 

  • While the intent was agreed to by all, the enforcement and details around things as simple as apartment sublets created concern around unintended impacts. 
  • The House Committee on Commerce eventually agreed that homes must be offered exclusively as primary residences until project-related debt is retired. The phrase “life of the housing development site” was replaced for clarity.

Here are the changes from the Commerce Committee and the Committee on General and Housing. 

  • 60% housing threshold retained: Projects must dedicate at least 60% of floor area to housing to qualify automatically; projects below that must go to the CHIP Board for review.
  • Two-tiered vs. flat increment:  The position of the Commerce Committee was to eventually provide a 70% flat increment for all projects, removing the affordability incentives. 
    • The House General Committee brought back the 80% increment for affordable projects. 
  • CHIP Board exception process affirmed: The CHIP Board can approve projects that don’t meet the 60% threshold if they “meaningfully address the community’s housing needs.”
  • Basements and garages: The Committee agreed to let VEPC determine, on a case-by-case basis, whether underground parking or basements count toward residential square footage.
  • Public notice requirement: Municipalities must provide public notice of infrastructure agreements and project terms.
  • Program oversight and reporting: The bill includes 5-year and 10-year reporting requirements, with data on housing types, affordability, and use (e.g., second homes, short-term rentals).

The House Committee on General and Housing will vote by the end of the day on changes contained in this memo to legislative counsel outlining drafting instructions. 

How does CHIP stack up? AARP Vermont partnered with Smart Growth America (SGA), through AARP’s Livable Communities Technical Assistance Program (LC-TAP), to study the proposed CHIP program and its potential impact on housing development. Give the report a read here. 

A Higher Bar on Appeals 

There is disagreement between the House and Senate over how to best change who can get in the door for municipal appeals. 

  • The House wants to address appeals this year and change how under current law, persons interested in appeals have a two-part test:  proximity and physical or environmental impact. This legislation would transition to a “person aggrieved” standard that allows appeals by anyone alleging injury to a “particularized interest,” while also eliminating the need for 20 persons for an appeal. 
  • The Senate didn’t include appeals language in their housing bill and have concerns that the language proposed by the House might unintentionally expand those eligible to appeal, rather than restrict it. Some favor waiting for the Land Use Review Board to complete its study on appeals, which is mainly about Act 250 appeals. 

 

Our Healthcare System is on the Brink 

A common theme in any affordability conversation is the increasing cost of healthcare and housing eating into budgets and inflating the costs of essential services.  

  • Our system is at a breaking point, as our commercial insurance is shouldering much of the cost burden for operating our healthcare systems statewide.
  • Without intervention, insurance premiums could spike by 20% yet again. 
  • The potential loss of the advanced premium tax credits later this year could push costs to beyond unsustainable levels, as was highlighted this week by the chair of House Healthcare, explaining a 2025 Silver family health plan costs ~$3,900/month without premium tax credits. If they expire, that could mean a family earning ~$129,000 could spend ~$47,000–$58,000 annually on premiums alone. 

The House and Senate continue the work of reviewing and amending the bills they’ve sent to each other. 

  • The Senate continues work on H.482, which would grant the Green Mountain Care Board (GMCB) emergency authority to reduce hospital reimbursement rates in imminent insurer insolvency and appoint independent hospital observers in material budget noncompliance. 
  • The House continues work on S.63 and S.126, focusing on affordability, system transformation, and regulatory oversight. The bill leans heavily on implementing reference-based pricing and changing reporting for hospitals to the GMCB. 

The Laundry List

Hundreds of hours of committee discussion each week culminate into our advocacy update, so not everything makes it into the overall update; however, we often cover what is left on the cutting-room floor here for our most dedicated readers. 

  • Governor Phil Scott and The Hartford announced the launch of the third and final phase of the Vermont Family and Medical Leave Insurance (FMLI) program, making it available to self-employed workers and individuals who do not have access to coverage through their employer. Enrollment began May 1 and runs through May 31, with benefits beginning January 1, 2026. 

The House Committee on General and Housing began a discussion around extreme workplace temperature regulations this week, voting to turn a short-form bill into a longform bill with language forthcoming.

Hey! You read the whole update. You probably have some thoughts on the content or how we delivered it. Feel free to reach out to us at [email protected]. 

Category: Advocacy Update