This week’s Legislative Update is sponsored by:
January 24, 2020
This week kicked off with the Governor’s annual budget address and saw the final compromise on two major legislative priorities; Paid Family and Medical Leave and Minimum Wage.
In this week’s update:
- The Governor presents his budget
- Deal struck on Paid Family and Medical Leave
- Two-year deal struck on minimum wage
- 13 Senators look to raise income tax for Green New Deal
- Housing conversation continues, Treasurer advises against bonding
- Global Warming Solutions Act
- Online Service Tax
- Fines proposed to drive compliance with bathroom bill
Legislative Breakfast Series
Our first Legislative Breakfast of 2020 will be Monday, January 27 from 7:30 – 9:00 am at Delta Hotels Marriott Burlington (formerly Trader Duke’s Hotel).
Registration is closed; however, there will be room for walk-ins on Monday! We’ve worked hard this year to arrange more time for networking between membes and their legislators. Don’t miss this time to hear from the Governor and connect with your House and Senate members . You can use our Weekly Legislative Reports to prepare for Monday’s discussions.
Our second breakfast will be Monday, March 16 from 7:30 – 9:00 am at Costco in Colchester.
Thank you to New England Federal Credit Union for sponsoring our Legislative Breakfast Series!
Governor’s Budget Address
On Tuesday Governor Phil Scott gave his sixth budget address since taking office and proposed a 2.8% increase in the state budget, which he believes is in line with expected growth. The budget did not raise taxes; however, it did look to legalizing sports betting and to expand the lottery in an attempt to bring an additional $4 million into state coffers. The Governor also used this opportunity to speak to the mandatory paid family and medical leave bill the House was scheduled to vote on two-days later; stating that his budget included the components needed to start a voluntary program in the state. A comprehensive overview of the administration’s proposals can be seen here.
Paid Family and Medical Leave
Last Friday, shortly after our newsletter went out, the Senate voted 20-9-1 to pass the compromise version of H.107. Yesterday, the House followed with a vote of 89-58. The bill will need to be voted on once more before going to the Governor who has indicated he will veto it. The Administration is working to establish a voluntary version of the program.
The bill would provide 12 weeks of parental bonding leave to each parent of a new child and 8 weeks of leave to care for a family member. This benefit is paid for by 0.2% payroll tax assessed on the employee; the employer has the option of covering some, or all of, the cost. The bill also provides the opportunity for Vermonters to receive voluntary, opt-in coverage for their own illness or temporary disability for an additional 0.38% payroll assessment.
Employees on leave would be paid 90 percent of the average weekly wage that is less than or equal to 55 percent of Vermont’s average weekly wage. The portion of the employee’s average weekly wage that is greater than 55 percent of Vermont’s average weekly wage will be replaced at a 55 percent rate.
This version is different from the one that originally came before the legislature in some major ways:
- The mandatory payroll tax of 0.2% is assessed on employees, not employers, with the option for an employer to cover some or all of the tax if they so choose.
- The program would be administered by a private insurance carrier
- The expensive disability component of the program, at a payroll tax of 0.38%, is voluntary
- This program will cost taxpayers $28 million dollars as opposed to the over $80 million the program was originally slated to cost
The House and Senate settled on a minimum wage increase on Wednesday of $11.75 by 2021 and $12.55 by 2022, a $1.59 increase over the next two years. This two-year incremental change comes following last year’s House proposal that increased the wage based on a formula that involved the Consumer Price Index (CPI), a floor, a ceiling, and a pause button to take a possible economic downturn into account. This proposal did not sit well with the Senate, so a two-year bill offered some avoidance of a downturn without a formula. The House will vote on the bill today.
Global Warming Solutions Act
H.688 took the majority of committee time in House Energy and Technology this week. This bill would create the ability for a citizen to file suit against the Vermont Agency of Natural Resources under an amended Rule 75 if they feel the Agency did not adopt rules to address climate change quickly enough or if the State misses greenhouse gas emission goals at years 2025, 2030, and 2050. It is still unclear how broad the rulemaking authority would be for the Agency in the event a court rules against them. Click here for a presentation legislative counsel gave to the committee to explain the bill.
Almost half of the Senate looks to raise income tax for Green New Deal
A bill sponsored by 13 Senators would create a Green New Deal for Vermont by raising $30 million in income tax by raising the tax on Vermonters earning between $200,000 and $500,000 by 1.6% and those making above $500,000 by 0.15%. The bill would have the tax sunset in 5-years.
Housing Conversation Continues, Treasurer Advises Against Bonding
On Friday, State Treasurer Beth Pearce walked through her report on Housing Funding and Finance for the best way to finance another 1,000 more units of housing within five years, which was requested by the legislation. The Treasurer advised legislators to instead of bonding, fully fund the Vermont Housing and Conservation Board with the levels originally set in statute from the property transfer tax.
Online Service Tax
The House Committee on Ways and Means heard testimony on a bill from Representative Mike Yantachka (H.756) which repeals the exemption on cloud-based services. The committee heard this testimony was around the issues related to the federal Permanent Internet Tax Freedom Act (PITFA). The committee, as well as most who take part in these conversations, is having trouble delineating Software as a Service, Infrastructure as a Service, and Platform as a Service which has a great deal of grey-area between them. If you are concerned about the taxation of online products your business uses, please contact your legislator and the LCRCC advocacy team.
The Laundry List
- Fine for Not Complying with Bathroom Bill Proposed; A bill introduced by Representatives. Mari Cordes and John Killacky would allow the Vermont Human Rights Commission to impose a civil penalty of up to $250 per violation for failure to comply with Vermont bathroom law passed in 2018 requiring gender-free restrooms in public buildings and places of public accommodation.
- Wage and Hours Law Modernization; The House Committee on General, Housing, and Military Affairs is working on a committee bill proposing technical changes to Vermont’s wage and hour laws in order to modernize the statutory language and to repeal or amend obsolete provisions.
- The House Committee on Commerce and Economic Development heard testimony on the ongoing process to build a Business Portal, a one-stop-shop for all permits and interactions small businesses might have with the state. The Governor allocated an additional $1 million to this effort in his budget.
Sponsor Legislative Updates
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Concerned or need to learn more about anything in this newsletter? Email our team at [email protected].
We look forward to working with you this session.
The Lake Champlain Regional Chamber of Commerce Advocacy Team