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DRM Advocacy Update – Week 12 – 2026

Lake Champlain Chamber News and Press Chamber News DRM Advocacy Update – Week 12 – 2026

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April 3, 2026

The theme of the week is punting. That’s not something of note to a typical observer of politics, and not entirely a value statement, just a fact; however, it is notable in the context of how pressing the problems are and how much of the debate seems to be about not if we should punt, but rather how far we should punt. 

  • On budgeting: The Governor expressed concern this week that the House’s budget only allocates surplus revenue to buy down property tax rates over two years, rather than a lump sum this year. 
  • On education: the House Education Committee has voted out a bill that punts consolidation decisions to new committees and delays the adoption of Act 73 policies.  
  • On housing: while representing good work, the Senate has voted a bill that prudently punts on dates to establish stricter Act 250 criteria that many are asking them to repeal. No amount of time, however, can do what is needed post-Act 181, building back trust. 
  • Higher income taxes? The House Democratic leadership last week punted on an attempt to create the highest marginal tax rate in the country, delaying a fight with their far left flank that could cannibalize our tax base.  

We unpack all this in this week’s update, as well as how to deal with the decline of the humble penny. We also unpack new legislative appointments, budget battles, and more in The Laundry List.

If you have any questions and want to go deeper on any of these issues, please reach out to us.

Education Transformation Bill Passes House Education Committee

After weeks of consideration, a bill has passed out of the House Education Committee that represents what the House will serve up as its best attempt at education transformation. 

What’s in the bill? The legislation represents a rebranded work product of the School Redistricting Task Force, heavily falling back on a new layer of school governance, Cooperative Education Service Areas (CESAs), to move the responsibility of consolidation from the legislature to  schools; 

  1. Adding a New Layer of Governance: Renaming and repurposing existing boards of cooperative education services (BOCES) to cooperative educational services areas (CESAs); 
    1. Core Mandates: Each CESA must provide at least three specific services to its members: Special education (including high-cost, low-incidence services), Business and administrative services, Consultation and facilitation for creating union school districts.
  2. Mandatory, Not Voluntary, Assignment: Unlike the previous voluntary model, the bill explicitly assigns every supervisory union in Vermont to one of seven specific CESAs.
  3. Consolidation Consideration: Requires all school districts to participate in working with their CESA and a hired moderator to study the advisability of forming a unified union school district; 
  4. Punting on the Foundation Formula: The bill delays implementation until 2030 and ties it to new contingencies, including completion of district consolidation votes and additional analytical work by the Joint Fiscal Office.
  5. Study Pre-K Incorporation: Require JFO to hire a contractor to make recommendations regarding how to account for the provision of prekindergarten education within Vermont’s education finance system.

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What’s Ahead? This bill has a long road to an eventual Committee of Conference, where seven people ultimately hammer out an agreement to bring back to the House and Senate, a process that went until the absolute last possible moment of the last legislative session. 

  • Money Committees: The bill still needs additions from the House Ways and Means Committee and Appropriations Committee. The Ways and Means Committee has been exploring tax instruments to incentivize mergers.
  • Construction as a Catalyst: Expect a push to link school construction funding and debt to the merger process, as the Ways and Means Committee believes that this is a better incentive than what they consider opaque tax policy. 
  • Party lines: The bill was voted out of Committee on a party-line vote and has already drawn consternation from the Governor.  
    • Behind the lines: The House Republicans were dealt some setbacks in this Committee, losing the Vice-Chair, who was on the Committee of Conference for Act 73, as well as the Assistant Minority leader, both to early retirements. 
  • On a Veto Trajectory: Governor Scott has signaled this is a non-starter, hinting at a potential budget veto. His administration argues the voluntary CESA model lacks the economies of scale necessary to actually lower the 40% tax trajectory.
  • Senate mapping: Once the bill passes the House, it will need to contend with the Senate, which has stayed on a trajectory of drawing new districts. 

Disconnected pieces: Act 73 put us on a trajectory to establish and implement multiple policy changes only after district maps were approved. 

  • The 2028 Cliff: Legislative Counsel has warned that the entire Act 73 tax reform package is contingent on districts being operational by 2028. If the CESA studies stall, the tax relief Vermont homeowners are expecting might never “turn on.”
  • Foundation Funding Formula: Scheduled for July 2028, this shifts budget-setting authority from local districts to the state, providing a base per-pupil payment adjusted for student needs.
  • New Revenue Sources: The Act includes a proposed tax on second homes and short-term rentals to fund a new homestead exemption intended to lower property taxes for many residents.

Uncertainty Clouds CTE: Efforts to reform Career Technical Education are underway; however, looming over them is the funding reform of the broader education system. 

  • Because CESAs are now mandated to handle “Business and administrative services,” the future of CTE governance is now tethered to the success of these new CESAs, adding another layer of uncertainty.

Reminder – Fiscal Pressures and the “Alligator Mouth” Problem: Lawmakers are under immense pressure to act as education property taxes have risen by more than 40% over the last five years.

  • Structural Gap: Officials describe an “alligator mouth” problem, in which education costs grow at approximately 6% annually while the non-property-tax revenues supporting the fund grow at only 3%, meaning close to a half a billion will be needed to buy down rates over the next three years.
  • Cost Containment from S.220: As a temporary “tourniquet” or bridge until the foundation formula begins, the Senate is advancing S.220. This bill aims to disincentivize high spending by lowering the excess spending threshold, which double-taxes spending above a certain limit, from 118% to 112%.

Act 250/Act 181 Discussion No Longer About Buying Time; It’s About Building Back Trust 

Last week, the Senate passed S.325 and sent it to the House, where the work only gets harder, as pushback from outside the State House intensifies. 

Catch up quick: Act 181, passed in 2024 after a veto from the Governor, fundamentally changed Act 250 from project-sized to place-based jurisdiction. While intended to simplify development, the transition has supercharged the existing feeling of an urban-rural divide in Vermont.

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The Friction: The “road rule” triggering Act 250 for any driveway/road over 800 ft and “Tier 3,” which creates high regulations for sensitive land, is seen by many as a “rural gentrification measure.” 

False dichotomy: The mantra of the environmentalist has been one of, “if you are going to make it easier to build in the urban areas, we need to make it harder to build in the rural areas.” The Lake Champlain Chamber, representing urban areas predominantly, has rejected that mantra, as it is woefully ignorant of basic facts.

Course Correction: S.325 is meant to address the aggressive original timelines that outpaced the state’s technical capacity by delaying Tier 3 mapping and the “road rule” implementation to July 1, 2030.

The Goal: Buying time to fix “clunky” methodology and a lack of public engagement that has left many communities feeling blindsided.

The Crux: The challenge for the House is no longer just about sequence or dates; it’s about rebuilding trust.

  • The Disconnect: Public testimony shows a widening gap between Montpelier’s policy design and the reality of changing what people can do with their private land. 

The Bottom Line: S.325 provides the breathing room, but substantive changes to mapping and public engagement are required to bridge the rural-urban divide.

Eat the Rich? Well, or the Closest Thing We Have… So, Cannibalization? 

The Big Picture: On Wednesday and Thursday in Montpelier, the legislative session devolved into chaos as a contingent of rank-and-file House Democrats revolted against their own leadership. At issue: a series of floor amendments to the miscellaneous tax and yield bills that would create two new, aggressive income tax brackets.

The Brakes and the Bargain: By mid-afternoon Thursday, the House hit a standstill. The House Majority Leader expressed frustration to the Democratic caucus, noting a prior agreement with the Senate to let them take the lead on higher income taxes.

  • The Deal: In exchange for withdrawing the floor amendments, Leadership agreed that the House Ways and Means Committee will draft a standalone committee bill including these tax hikes and hold a formal vote later this session.

The “Rich” in Vermont: When people say “eat the rich,” they usually aren’t talking about the local pediatrician, unless they live in Vermont.

Zoom out: Vermont currently has one of the most progressive tax structures in the U.S..

  • #49 out of 51: According to ITEP (where a higher rank means more progressive), Vermont is nearly at the top for tax equity.
  • The Top 1%:  Starts at ~$588,500 Vermont, far below the national average for that threshold, and the roughly 3,500 filers already pay 30-35% of all state income tax revenue.
  • The Net Receivers: Due to the fully refundable Child Tax Credit (CTC) and EITC, more Vermonters now receive more money back from the state than they actually pay in total income tax liability.
  • The Competitiveness Gap: The taxpayers this democratic contingent seeks to squeeze are mobile, which could set up an out-migration trap. 
    • Vermont currently ranks #42 on the State Tax Competitiveness Index; becoming #1 for the highest marginal rate would likely push that ranking to an even worse place.

What to Watch: The spotlight now shifts back to House Ways and Means, which, under the bargain, will give the issue a hearing and a vote. 

The Veto Cloud: Governor Scott remains a hard no, citing the risk to Vermont’s narrow tax base.

Soon Penniless, House Committee Looks to Standardize Transactions 

Lawmakers are considering a bill, H.837, to give retailers legal cover and a standardized way to handle cash transactions without risking “deceptive practice” lawsuits when we inevitably run out of pennies. 

Why It Matters: As the U.S. Mint scales back penny production, businesses face a logistical headache. Without a formal rule, rounding up or down is a legal gray area that invites consumer complaints or litigation.

How it works:

  • Round Down: If the final digit of the total (after taxes and fees) is 1, 2, 6, or 7, the merchant rounds down to the nearest multiple of five.
  • Round Up: If the final digit is 3, 4, 8, or 9, the merchant rounds up. 

Dive deeper: The House Committee on Commerce and Economic Development is vetting the following framework:

  • Cash Only: This does not apply to credit cards or digital payments.
  • Tax Neutrality: Taxes must be calculated on the pre-rounded total to prevent revenue skimming.
  • Transparency: Businesses must clearly notify customers if they use a rounding system.

The Friction: While the intent is broadly supported, two sticking points remain:

  • Mandatory vs. Optional: Stakeholders agree rounding should be a choice, but if a business opts in, they must follow the state-mandated symmetrical formula.
  • Consumer Impact: Advocates note that even “fair” rounding can slightly favor businesses over millions of transactions, leading to calls for stricter disclosure rules.

What’s Next? The committee is weighing additional safeguards to ensure consumers aren’t left in the dark. Expect further debate on exactly how “conspicuous” a business’s rounding notice needs to be before the bill advances.

Penny for your thoughts? We’re looking for member feedback on H.837.

The Laundry List: 

  • Budget Battles: Last week, we covered the distinct differences between the Governor’s proposed budget and the House-passed budget. This week, the Governor used his press conference to respond to the budget passed by the House and laid out his issues with the bill in a letter to the Senate Appropriations Committee. 
  • Chittenden County State’s Attorney Race is On: Bram Kranichfeld announced his candidacy on Monday, in a contest with Sarah George, the two-term incumbent. Kranichfeld is an ordained Episcopal priest, former Burlington City Councilor, former deputy in the Chittenden County State’s Attorney’s Office, and, most recently, served as the top prosecutor in Franklin County since 2023 after a resignation from that office. His notable first endorsement comes from the VT Attorney General, Charity Clark. Read more about this contest via SevenDays. 
  • Workforce Temperature Regulation Frozen? Last week, we reported (link)on a strong backlash to a preposterous proposed “extreme” temperature workplace standard. The House General and Housing committee continued testimony this week; however, it’s looking likely they will not pursue the language. 
  • Newcomers: As we’ve recently covered, what has to be a record nine mid-biennium appointments have been made to fill early retirements. The two most recent are; 
    • Governor Scott announced Monday his appointment of Kumulia Long of Milton to fill the vacant Chittenden-Franklin seat in the House of Representatives formerly held by Chris Taylor. Long is a real estate broker, combat veteran, and former Chair of the Milton School Board. 
    • The Governor also appointed Jack Brigham, St. Albans Town, to fill the vacancy in House district Franklin-8, replacing Casey Toof, who resigned last month. Brigham is a lifelong dairy farmer on the multi-generational Holyoke Farm, where they also produce organic maple syrup, raise beef, and sell hay. Brigham is also a member of the St. Albans Town selectboard, serves on the Act 250 district 6 commission, and has served on other local boards, including the town planning commission, development review board, and local school board.
    • The House seat left vacant by Rep. Bob Hooper of Burlington has yet to be filled. 
  • RTO is a no go: In a statement on Tuesday, Governor Scott’s Office did not mince words in response to the Vermont Labor Relations Board Decision on the State’s Hybrid Work Standard, saying, “today’s decision from the Vermont Labor Relations Board makes it clear the Labor Relations Board is broken, and a fair, unbiased process is impossible with the present Board makeup.” Read more via VTDigger. 
  • That’s one way to increase school enrollment… Check out recent VPR coverage outlines how the CVU school district is looking at building 600 units of housing on the school’s own property.
  • College Co-op model comes to Vermont: NBC5 recently covered how the Lake Champlain Chamber has launched a Co-op with St. Michael’s College to provide students with job placements as part of their studies. 
  • Cannabis Cash: The Vermont House Committee on Appropriations recently reviewed the state’s cannabis market, finding it has transitioned from a rapid startup phase into a stable, predictable revenue source generating approximately $160 million in annual sales. Read more via the Vermont Cannabis Market Supply and Demand Analysis and Joint Fiscal, this Cannabis Taxes and Allocations Overview
  • Weekend LISTEN: You might want to give Senator Thomas Chittenden’s interview on the Morning Drive a listen if you haven’t as he gives a moderate and measured take Act 250/Act 181 changes as well as the property tax buy-down and future cost containment.
Category: Chamber News