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February 21, 2025
Informal polling of anyone who has spent substantial time in the Vermont legislature will tell you this is the slowest session, with the least done, that’s been experienced in decades.
Catch up quick: As we’ve previously covered, this has been an incredibly slow start to the legislative session due to the erosion of supermajorities in the House and Senate, electoral mandates shifting focus, staffing challenges, turnover, and a quirk in the calendar, which had the legislature meet later.
This shouldn’t necessarily be taken as criticism – the issues before them are daunting, and the number of times you hear “education reform is sucking the oxygen out of the room” in State House discussions is a clear indicator.
Despite this, the regularly scheduled dates still approach rapidly;
- February 28th, the Legislature will leave for a week’s recess
- March 4th is Town Meeting Day, and Legislators will be going home with less to share with their constituents than they have in past years
- March 11th, they return, and it will be a mad dash to finalize bills before crossover
- March 14th is crossover and is the date a bill must be voted out of a policy committee
- March 21st is the crossover for money bills
- All of these dates are so that they can constrain the flow of work to finalize all work to ensure a session that is about 18 weeks.
- May 17th would be close to the typical adjournment if this was a typical year, however, this may not be a typical year for all the reasons we’ve stated, and some legislators are predicting they go into June…
Zoom Out: One of those dates is also an essential date at the national legislative level – March 14th is the deadline for a government shutdown, and at that time, we will get a first glance at the political potential for proposed massive cuts in national spending.
- We covered last week that Vermont is very dependent on federal funding, with more than one-third of our state budget coming from the federal government and an unaccounted amount of municipal, non-profit, and university funding coming from them.
Bottom line: Legislators might feel as if they have the luxury of time, however, they might regret not making more progress on issues they can control now when they need to react to issues out of their control later.
In this week’s update,
- Education reform overview
- An essential piece of the Governor’s education overhaul puzzle proposed
- House Omnibus Housing Bill released
- Controversial labor bills contemplated in Senate Committee
- The Laundry List
We strive to make these concise and easy to read. Feedback is not just welcomed, it’s encouraged – [email protected]
Education Reform Overview
3-4 minute read
Town meeting day is right around the corner, which is when voters make big decisions about their school budgets.
Rewind: last year’s Town Meeting Day was historic, as a third of school budgets failed on Town Meeting Day in a series of events that resulted in a voter backlash in November that eroded the Democratic supermajorities in the legislature.
Fast forward: This year, costs have been contained to about a 6% average increase as districts try to keep costs low.
- How are budgets so low this year? Staff salaries and benefits make up about 80% of budgets, and many school districts are letting go of many staff to contain costs this year.
- Changes from the last session are in effect, as there are excess spending penalties and changes to ballot language made last year mean residents will see how much spending per student has increased or decreased, a key metric in determining tax rates.
Take Action: be sure to know your local budget and make a plan to get out and vote!
Back in Montpelier: The Scott Administration intends to cut $183.6 million from Vermont’s $2.3 billion education budget through a sweeping overhaul that encompasses consolidation of school governance, moving to a foundation formula, and expanding school choice over a short timeframe.
- We got a view of essential pieces of the puzzle this week (read the section below) however, there are still missing pieces regarding Career Technical Education and PreK.
- This proposed overhaul is incredibly complex, requiring work in multiple committees with jurisdictions overlapping education, government operations, and money committees.
Tired of Waiting: Democrats are becoming impatient with the slow roll-out of the Governor’s education plan and this week started rolling out a plan of their own.
Final Big Pieces of the Foundation Formula Puzzle
3-4 minute read
The Governor is proposing that excess spending be paid for from the districts’ grand list, equalized by a “State Guarantee” and capped at an amount that is yet to be determined.
- These are essential pieces to the foundation formula conversation that has been happening, and having these elements answers some big questions with massive implications.
Funding overhaul: Under this proposed foundation formula, the following changes would be made:
- Block Grant: The foundation formula would set a per-student block grant, with a base grant of $13,200 per student that is increased with weights to accommodate student needs.
- Excess spending: Spending beyond that block grant, called excess spending, is paid for from the district’s grand list, or the total value of all the property in that district. It is capped at an amount yet to be determined.
- State Guarantee: This is effectively a state match to the district’s excess spending. It kicks in if a district below the median wealth per student spends above the state’s block grant to ensure that those districts can raise the same revenue at the same tax rate.
- One tax rate: under this proposal, there is a uniform statewide tax rate for both homestead and non-homestead properties that will go into the education fund and pay for the block grants and state guarantee.
- Income sensitivity: A homestead exemption would be tiered by income to replace Vermont’s income-based property tax credit.
Why the details matter: Vermont’s education system needs to operate within the confines of the state’s constitutional guarantee for equality of educational opportunity, which was laid out in the state’s landmark legal case Brigham v. State.
How is this Brigham compliant? The “State Guarantee” is doing most of the heavy lifting here, as it compensates for different property tax bases between school districts if they choose to raise funds beyond what the state provides through the foundation formula. See below for an example.
House Committee Reviews Draft Housing Omnibus Bill
3-4 minute read
The House Committee on General and Housing initially reviewed a draft housing bill DR 25-0838.
- It is a work in progress with many placeholders, however, it is great to have legislative text finally.
- The bill has incorporated some aspects of the Governor’s PATH plan, including appeals language and rental housing improvement funding.
Appeals reforms are perhaps the most impactful portion of the bill. The bill,
- Prioritizes housing appeals at the Environmental Division of the Superior Court, requiring cases to be heard within 60 days and resolved within 90 days.
- Raises the municipal zoning threshold for who can appeal housing projects
- Instead of allowing 20 individuals to file an appeal, the new standard would require 20% of a municipality’s residents to participate.
- Appeals must demonstrate a clear and substantial departure from land use laws that directly affect the appellant’s property.
- Introduces financial penalties for unsuccessful appeals:
- If the court rules in favor of a developer, the appellant could be required to pay up to $50,000 in legal fees and costs, though the court could waive penalties if the appellant proves undue hardship.
Infrastructure is a focus of the bill;
- The bill envisions a Vermont Infrastructure Sustainability Fund, a revolving loan fund administered by the Vermont Bond Bank, to help municipalities finance water, sewer, and public infrastructure projects that support housing with low-interest loans (not grants), with repayment replenishing the fund over time.
- Conspicuously absent is any form of infrastructure financing, such as the SPARC and HIT programs that have been proposed. Members seem assured that the House Committee on Commerce and Economic Development will proceed with one of those proposals.
It also includes over $45 million in proposed appropriations for rental housing rehabilitation, homeownership assistance, and infrastructure projects to support new housing development, though it is unclear what revenue would support that.
In a potentially controversial move, the bill includes a rental housing registry, which received bipartisan condemnations and failed multiple times in previous bienniums and might be a veto target.
Senate Committee Contemplates Contentious Labor Bills
2-Minute read – Action Item – Send this Section to your HR Team
The Senate Committee on Economic Development, Housing, and General Affairs is contemplating some controversial legislation that would potentially make business more difficult for Vermont employers who are already struggling in our state’s business climate.
Labor Wishlist Bill: A proposed bill, dr req 25-0653, would make three extreme changes to Vermont employment law.
- Eliminate at-will employment: This would make Vermont an extreme outlier, as all but one state has at-will employment. At-will employment means that the employer and employee can terminate their employment agreement without cause. The proposed language does not change the employee’s ability to terminate employment.
- Ban Non-Competes: The Federal Trade Commission has already promulgated rules on noncompete agreements, however, labor advocates have suggested that the Trump administration could reverse them and have asked for a Vermont legislative backstop.
- Create a “Right to Sit:” This proposal envisions an employee having the ability to assert a right to sit in their workplace if standing is not required for the performance of the job. This seems simple on its face; however, it could set employers up for conflict when employees and employers disagree.
Unemployment Insurance Changes – S.37
This bill proposes that wages earned for work that would not qualify an individual to receive unemployment insurance benefits shall not be counted when determining an individual’s weekly unemployment insurance benefit amount.
- This could have a substantial impact on the health of the unemployment trust fund and has major implications.
The bill also seeks to make individuals who work for an educational institution in any capacity other than an instructional, research, or principal administrative capacity eligible for unemployment insurance between academic terms.
- This provision would not have an impact on the Unemployment Trust Fund, however, it would increase costs to the education fund, as schools pay out unemployment benefits dollar-for-dollar, and could increase property taxes by about 1% statewide.
Constitutional Amendment: Also in play is Prop 3, a proposed constitutional amendment granting workers the right to collectively bargain.
- A Senate vote is expected soon, after which the proposal will move to the House for further consideration.
- This proposed amendment was passed last year, and if passed, this biennium would then go to voters for a statewide vote in 2027.
- There are still looming questions about the full impacts of such a proposal and if this would tie the hands of future legislatures.
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.
- Read previous updates: Week 1, Week 2, Week 3, Week 4, and Week 5.
- This week, the Administration announced the departure of Commissioner Joan Goldstein from the Department of Economic Development, where she had served since 2017 when she was appointed by Governor Peter Shumlin, before being re-appointed by Governor Phil Scott. Joan will go on to be the new CEO of the Vermont Economic Development Authority.
- Governor Phil Scott signed into law H.35, which makes permanent the separation between the small group and individual health insurance plan markets in Vermont Health Connect.
- The Legislature is considering major changes to Green Mountain Transit service that would involve bifurcating the rural and urban operations, a move that has upset organized labor. Read more via VTDigger.
- The House Ways and Means Committee spent time this week discussing a land value tax, which seems to not have legs in the legislature, at least this session.
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].