DRM Advocacy Update – Week 16 – 2023

The Gaps Yet to Be Closed Between the Governor, Senate, and House

How the year ends and how soon legislators leave will depend on a few bills that we’ll dive into in this part of the update; the budget, paid leave, childcare, and housing bills. We’re going to try our hand at “smart brevity” here to simplify this. 

The Budget – the Senate voted out the budget by a vote of 24 to 5 this week. Usually, when the budget is done, the session is done, however, this year, the budget committees will likely be waiting on their peers in other committees to finalize other pieces of legislation that need to be funded by the budget. 

• The House sent the budget to the Senate with a significant gap between the House and Senate’s visions and far out of step with the Governor. Their budget also included $120 million in funding for paid family and medical leave, which was dead on arrival in the Senate.
• The Governor has been adamant that the budget should hold in reserve funding to match federal funds from the IIJA, and he has lambasted the House for not doing so. He’s also criticized the growth of 13% in the general fund in the budget. 

• The Senate closed the gap between them and the House, however, there are still some differences that need to be worked out in a Committee of Conference. The Senate had a relatively more conservative outlook on the economy and tax revenue as it begins to lag. 

• The Gap is relatively small between the House and Senate. When they come to an agreement, they will still likely be about $140 million above the Governor’s recommended budget. The Senate paid heed to the Governor’s recommendation, however, they did so by levying about $20 million in increases in DMV fees; the Governor would have hoped to see that come from surplus funds. 

Paid Leave – the bill sits on the wall in the Senate Committee on Economic Development, Housing, and General Affairs with no indication that it will move. Will the House go gracefully, or will they muddy up the adjournment process to attempt to pass this long-standing priority?

• The Governor is already in the process of a three-part rollout of enrollment in a voluntary paid leave program that would be managed by a private, third-party administrator. 
• The House sent to the Senate H.66 back in early March, which would have created one of the most generous paid family medical leave programs in the country at a cost of about $120 million. 
• The Senate has not taken action on the bill, with the Committee of Jurisdiction not holding any hearings. Instead, the Senate folded in a much more narrow paid leave provision that would only include only parental leave, at a smaller cost of $15 million, as part of the childcare bill they sent to the House. 
• The Gap between the two chambers couldn’t be any bigger as the Governor moves ahead with his own plan, the Senate shows no interest in passing any such bill this year, and the House continues to build their final expectations around H.66. 

Childcare – the bill (S.56) has been deliberated by multiple House Committees this week and will not make it to the House floor until mid-week next week at the earliest. 

• The Senate sent a bill to the House, which it was readily apparent would be changed in the House.
• The House is adamant that they would not accept the Senate’s use of reappropriating the funding for the VT Child Tax Credit to pay for the package, and early scuttlebutt indicated that the House would hope to use a corporate tax. We cover in the section below the massive tax increases that the House is considering. 
• The Governor has been adamant that he doesn’t want to see new taxes and identified about $50 million in base funding in his budget to double the size of childcare subsidies this year. 
• The Gap between the House and Senate is relatively large, and it might take some time to close. This bill will likely be the one that presents the largest obstacle to adjournment. No matter what, it is safe to say the legislature will be seeking to spend at least an additional $120 million on childcare subsidies that are paid for by a combination of taxes on employees and employers, and It’s still unclear how the Governor will handle such a bill. 

Housing – this legislation might be the least difficult to move over the next two weeks, however, land use bills have a tendency to be catalysts for surprise skirmishes. This is the number one issue for voters, and leadership must deliver on this. 

• The Senate Committee on Economic Development, Housing, and General Affairs produced a fantastic bill that has subsequently been watered down by the process in more conservative committees that follow. 
• The Governor has bemoaned the bill’s loss of meaningful action on Act 250 and pushed the legislature to do more every step of the way. 
• The House saw a chance to make some changes in the House Committee on General and Housing, instead, disgruntled members learned their housing charge doesn’t include land use laws or regulations. The Rural Caucus stepped up to make asks for a more permissive bill to meet the needed 40,000 units that must be built in the state. Soon after this update is published, the House Committee on Environment and Energy will pass a bill including some of the Rural Caucuses’ asks.
• The Gap is less pronounced on this legislation as minimal invasive changes have been made to this legislation. As we said above, the legislation has taken a path of becoming more conservative since it was first introduced and thus has become less controversial.  Differences still need to be remedied between the two bodies related to housing in budgets. 

There are still a number of unpassed bills that are unfinished and are not “must-pass” bills ahead of adjournment, however, are priorities to various chairs, caucuses, or influential members, such as some problematic labor bills, SALT cap workaround), and others.