The state’s economists met with the legislative fiscal leaders this week to review a revised economic and revenue forecast. The report can be found at http://bit.ly/wzsOXy. The economists found that while Vermont is outperforming many other states, minor revenue downgrades are needed from the July 2011 projections. Reasons cited included the European debt crisis, oil prices, domestic political gridlock and a slow start to our winter tourism season.
The House Appropriations Committee chaired by Rep. Martha Heath (D-Essex/Westford) did not make significant changes to the Governor’s Budget Adjustment proposal. However, it did include language that requires the request for 26 positions in human services to be transferred and converted from existing positions in state government so there will be no growth in the permanent work force. The 21 new transportation positions will be limited service positions that last for only two years.
Several bills receiving some attention would significantly reorganize the way land use, environmental enforcement, and permit appeals are handled. H.513 (sponsored by Rep. Deen (D-Windham) would replace the Natural Resources Board with an environmental review board that would hear the appeals and enforcement cases related to state environmental permits currently heard by the Environmental Court. Rulemaking for the water resources panel would transfer from the Natural Resources Board to the Agency of Natural Resources. Sen.Ginny Lyons also has a bill (S.28) that would consolidate environmental permitting into a Department of Environmental Quality with a three person environmental council. While our organizations do not support replacing the Environmental Court with a professional lay board, we believe that additional hearing officers would improve the process; we support folding the water resources panel under the umbrella of the Agency; and also support on the record review by District Environmental Commissions. These three changes would go a long way in addressing our concerns with delays that the business community has encountered with appeals at the Environmental Court level. If you are interested in these issues, please contact email@example.com
In the aftermath of Hurricane Irene, a significant number of bills pertaining to river corridor management, floodplains and water quality have been introduced and are being reviewed by the House Fish and Wildlife Committee. Several Chittenden County representatives with Rep. Webb (D-Shelburne) as a lead sponsor, have proposed a water resources preservation program (H.529), which establishes a fee for all development and farmsteads in proportion to the property’s area of impervious surface. This fee would be used to provide financial assistance and support to projects that improve water quality.
It appears that there may not be any action on the Blue Ribbon Tax Structure Commission’s recommendations this year. Rep. Ancel (D-Calais) and Sen. Cummings (D-Washington) recognize the need for educating policy makers and the public alike on the impacts of major decisions such as migrating to an adjusted gross impact base, eliminating deductions or taxing more services. The major change in tax policy may be that the state will collect all education property taxes rather than municipalities. There is concern among some legislators about the Governor’s proposal for another reduction in General Fund support for the Education Fund. Which in turn, will have an impact on local property taxes. The Governor has also asked local boards and voters to hold the line on education spending again. Senators Snelling, Illuzzi and Miller have offered a bill in support of our recommended changes for capital gains, bonus depreciation, the estate tax and corporate income taxes.
Our organizations continue to work with the Administration on reaching a solution to the recent Tax Department’s interpretation of statute as it relates to taxing cloud computing and software as a service. We coordinated a meeting involving many of our technology based companies with Administration officials to explain the need to continue supporting this important sector by having a competitive tax environment. Governor Shumlin and Lawrence Miller, Secretary of Commerce and Community Development have remarked on several occasions that the Governor does not support taxing the cloud. At this point, we are unsure if there will be an administrative or legislative remedy forthcoming to clarify the present situation and the legislative intent of a 2006 law. We will continue to work with the Administration as they seek to find a solution.
Last year, the fee bill recommended $400,000 in new fee revenues, this year it will be up to $10 million if adopted. Most of the increases are in Transportation and Agency of Natural Resources related fees. Fees for vehicle registrations, commercial drivers licenses and permits are proposed to increase by anywhere from 5% to 50%, while natural resources permits involving water and air quality and wastewater increase by 11% to 150%. The Administration cites dwindling federal funding and increasing costs as driving the need for increased fees. Department of Environmental Conservation Commissioner Mears, made the case that the Agency of Natural Resources staff has been cut by 17% over the last five years which directly impacts the ability to process applications.
The Administration is recommending extension of the Vermont Employment Growth Incentive (VEGI) Program for another five years as well as more flexibility with the wage thresholds. Secretary Lawrence Miller also mentioned a need to increase the cap on VEGI allocations.
Bills Can Be Found On-line
All of the bills mentioned in this report can be found at http://www.leg.state.vt.us/ResearchMain.cfm
Please note that these bills may change, but your feed back on the overall purpose and elements of the bills are welcome. If you are interested in testifying or providing comments on these issues, contact firstname.lastname@example.org