WLR Mar 29: FY25 Budget Bill, Act 250 Reform, Cannabis, Tax Sales, and more

The House passed H.687 on a vote of 89-51. The Act 250 bill, as the sponsor describes it,  “while not a housing bill per se,” had been held up by House leadership under criticism for not doing enough about Vermonters’ number one issue leading into this session, housing. The bill now heads to the Senate, where all will need to be mindful that it does not have the votes to override a likely impending veto unless it changes dramatically. 

For more on H.687 and Act 250 see VLCT's Housing and Land use topic page. 

There are a number of other issues related to housing circulating the Legislature this year; 

• S.311 is consistently framed in juxtaposition with H.687 for its starting paradigm as a housing bill, not just a biodiversity protection bill, which aims to make changes to Act 250 to promote housing. 
• S.213 is a bill aimed at development in river corridors. It has been the subject of some concern as it further limits where development can happen. While there is an understanding of its need, the overlapping context of legislation saying where not to develop is adding up fast. 
• H.829 passed the House and includes various appropriations to housing programs in fiscal year 2025 and in fiscal year 2026 as part of a stated General Assembly intent for more housing investments between fiscal year 2026 and 2034.
• H.639 is a bill that is focused on flood protection, however, it incorporates accountability 

The business community and others have taken a stand on this issue, arguing that no matter what is done in this legislative session, Vermont will rank nationally as having the highest property taxes to fund the highest per-pupil education spending for below-average educational outcomes and Vermont has a responsibility under statute to provide a high-quality system at a cost Vermonters can afford. Many believe we are failing on both counts. 

Vermont’s education funding is a run-away train because local tax payers are not closely tied to the decisions they make, given our statewide funding model that is driven by local control. With seven weeks left in the session, there is a discussion in the House Ways and Means Committee about changing the model. 

• The Chair of the House Ways and Means Committee will advocate for adopting a “foundation model” for funding. This model, which is common in other states, ensures a minimum amount of state aid per student.  
• Another member of this Committee is proposing to build on this while maintaining a connection between local spending decisions and taxes. This would involve two funding pots: 
  • one from non-property tax revenue that would fund the foundation 
  • one from homestead property taxes, with additional spending funded exclusively by homestead property taxes, tying local spending decisions more closely to local taxes.

While this idea has promise and is welcomed for its potential ability to curb the issues plaguing the system, it is worth noting that our education funding system is incredibly complex. This year’s crisis is partly the result of “unintended consequences” of changes that came after years of study.

The House Education and the House Ways and Means Committees had a joint hearing on the state of our education system with the Chair of Ways and Means putting forward two main questions to the Committees, “what problem are we trying to solve?” and “what tools do we have to solve this problem?” 

• The conversation honed in on the dichotomy of having local control of the expenditure of statewide funds along with the creation of many unfunded mandates on schools over the past decade as the Legislature has looked to schools to fix societal problems. 
• The Committees got an overview of the available budgets from schools that now allow fiscal analysts to project an education funding gap of about $197 million. 
• In conversation, it came to light that 2025 and 2026 are going to be very difficult as the collective bargaining agreements, which are about 80% of our education system’s cost,  that districts that negotiated kick in with increases of upwards of 12%. 

This week saw the passage of H.880 in the House and S.58 in the Senate. There was also testimony in Senate Health and Welfare on H.72, which would create two overdose prevention sites, with one in Burlington. 

H.880: INVESTMENTS IN THE JUDICIAL SYSTEM

As we’ve discussed in updates before, the speed at which individuals get through the judicial system and the surety that there will be consequences for their actions are significant factors in whether they will re-offend. The House passed H.880 this week, which seeks to invest in the state’s court system to clear the case backlog in the next four years. 

• H.880 would spend about $7.51 million on various judicial positions in the state’s state’s court system to clear the backlog in the next four years.
• The Governor pushed back on whether these positions are necessary in his press conference and noted that most of the issue is the time and resources wasted on people not showing up for court dates. 
• H.880 funds these actions by using the same revenue as H.721, two changes to corporate income taxes, and increasing securities registration fees. 

S.58: TOOLS TO CURB DRUG TRAFFICKING ACTIVITY 

The Senate passed S.58 this week with only four no votes. The bill would do a few major things to mitigate the current drug crisis in Vermont. 

• The bill contains stricter penalties for the trafficking of fentanyl and xylazine and makes distributing of these drugs with death resulting a crime. 
• The bill would temporarily roll back some of the “raise the age” provisions that the Governor and some legislators have since indicated were a mistake. 
• The bill adds to the list of “big 12 crimes” in which a juvenile can be tried as an adult for crimes committed with a firearm. 
• Finally, the bill makes it easier to address properties where drugs are being distributed. 

S.72: establishing a safe injection facility 

The Senate Committee on Health and Welfare heard testimony this week from various witnesses. 

• From a clinical perspective, the Committee heard pushback from the executive director of Journey to Recovery Community Center in Newport, Vermont, who expressed concerns about overdose prevention centers (OPCs), stating that they are a misuse of resources and may not alleviate the substance use crisis effectively. She also highlighted challenges such as the potential for harm within OPCs, the need for boundaries between harm reduction and recovery, and the lack of support for recovery coaches within OPCs.
• The Committee also heard from a recovery coach from the AIDS Project of Southern Vermont about what he saw as the need for a place to use narcotics where they are not alone and are sanitary. 
• The Committee began to mark up the bill and will very likely vote on the legislation next week. 

If you have not taken a look at the privacy bill that has passed the House, you may want to, as it makes Vermont an extreme outlier. Of the 14 states that have passed comprehensive privacy legislation, there are two basic models. 

• The California framework: covers only them, however, they are the fifth largest economy in the world, with much of the tech sector based there and over 40 million consumers.
• The Connecticut framework: 13 states have adopted this, bringing its reach to 100 million consumers. 

Neither of these two frameworks, together covering nearly half of American consumers, contains a private right of action. The privacy bill just passed by the Vermont House would only be applied to Vermont’s 645,000 residents. The inclusion of such a provision would make Vermont an extreme outlier. 

• Advocates are concerned about the Private Right of Action as it could lead to a flurry of frivolous sue-to-settle activity among Vermont businesses. 
• The provisions might also make it harder to use services or work with vendors because they would be unlikely to change products for such a small market. 

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 updates from Week 1, Week 2, Week 3, Week 4, Week 5, Week 6, Week 7, Week 8, Week 9, Week 10, Week 11, and the last session’s recap.
• On Saturday, before leaving for a two-week recess, Congress finally agreed on a budget for the fiscal year that began six months ago in a package of six spending bills. Read more about our Congressional Delegation’s activity on the package here.
  • As a reminder, applications for Congressionally Directed Spending are still live. 
• The Ways and Means Committee passed a property transfer tax last week, precipitating unity among legislators from the greater Burlington area as they pushed back because the new top bracket of $600,000 represents many modest homes within their districts. As a result of the pushback, the committee chair bumped that up to properties in excess of $750,000.00 in value and moved the rate up to 3.65% to bring in the same revenue.