Lawmakers endured a marathon legislative session that stretched well past midnight on Friday as they sought compromise on controversial bills to set property taxes, protect people’s data and modernize Act 250 while speeding housing construction.
Last-minute disagreements between the House and Senate over several bills pushed exhausted lawmakers and staff to the brink. The Senate adjourned around 1:20 a.m., the House after 2 a.m., with each chamber agreeing to return on June 17 to address the expected vetoes from Gov. Phil Scott.
“This has been a hard session,” Sen. Alison Clarkson (D-Windsor) told colleagues. “This has been perhaps the hardest session of my 20 years in the Statehouse.”
Immediately before the Senate adjourned, Scott, who spent several hours eating pizza and watching hockey in his Statehouse office as he waited for lawmakers to wrap up, gave customary remarks thanking lawmakers for their hard work.
He said they all shared a vision of a Vermont with families breathing life back into communities, healthy children filling classrooms and a thriving economy.
“We just have a different vision on how to get there, and after this session, it’s clear we have a little more work to do,” Scott said.
The most closely watched bill taken up late on Friday was legislation that sets property tax rates, known as the yield bill. The bill, H.887, was the subject of vigorous back and forth between the House and Senate. Lawmakers debated how to best shield property owners from increases that just a few months ago were predicted to exceed an average of 18 percent, depending on the size of school budgets and other factors.
Senators drafted a bill that wrestled that average increase down to 12.5 percent. They did so by plowing an additional $25 million in general fund dollars into the State Education Fund to “buy down” the amount that would have to be raised by property taxes.
They also proposed raising other taxes to buy down the property tax burden further. A sales tax on the use of online software would raise $14.7 million. And a 3 percent tax on short-term rentals was expected to raise $12 million.
The House worried that lower-income residents who rely on a property tax credit program would get hit hardest by the increase. So they proposed rejiggering the formula to increase those credits by $20 million.
“This is going to help the most financially vulnerable,” Sen. Ann Cummings (D-Washington) said.
That move, however, increased the total average property tax hike to 13.8 percent. The Senate reluctantly agreed to the House’s change.
Republican lawmakers, taking a cue from Scott, blasted the tax hike as unacceptable, noting that the bill contained no immediate changes to rein in costs.
“I cannot support a bill that has zero structural changes in it,” Rep. Pattie McCoy (R-Poultney).
The bill calls for the creation of a Commission on the Future of Public Education charged with reforming the structure and financing of education.
But Sen. Mark MacDonald (D-Orange) said he expected the commission would end up confirming what everyone already knows.
“Small rural schools spread about in hilly and mountainous areas are more expensive to operate than schools in other places,” he said. “Vermont is a poster child for a place that’s expensive to educate children.”
Scott has argued that lawmakers haven’t done enough to reduce the property tax increase. But Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) said lawmakers had done as much as they responsibly could under the circumstances.
Scott’s only ideas for reducing that burden further involve borrowing money from reserves in a way that could negatively affect the state’s bond rating, Baruth said.
“He has relinquished his title as the fiscal adult in the room,” Baruth said of Scott, who is expected to veto the bill.
Another high-profile bill that went down to the wire under intense pressure to hammer out a compromise was the Act 250 reform bill. H.687 proposed overhauling Vermont’s 54-year-old land-use law while also streamlining housing production.
The controversial bill has come under withering criticism from Gov. Scott, who supported the elements designed to make it easier to build housing near town and village centers but not those provisions meant to set the stage for additional protection of sensitive habitat such as forests, wetlands and river corridors.
The bill got hung up near the finish line on a somewhat tangential issue — how to raise money from property sales to fund new housing construction.
The House proposed an increase in the property transfer tax on all properties over $750,000, but the Senate felt that was too blunt an instrument. Senators favored a more complex series of changes to property transfer aimed at raising $15.7 million, primarily from the sale of second homes.
The House, due in part to the clock running out, agreed to the Senate’s changes.
Other bills that made it over the finish line include ones addressing data privacy, cannabis regulations and ethics code for municipal officials.
The data privacy bill was one of the more contentious of the session. H.121 sought to protect both people’s online data and children using social media.
The bill proposed a series of regulations on the collection, sharing or sale of people’s online data, a rule that would apply not only to Big Tech but to small businesses such as the Vermont Country Store.
A debate erupted over whether people should be allowed to sue companies that violate the new regulations, known as a private right of action. That right, after a study, would go into effect on January 1, 2027.
“I’m really proud of where we landed,” said Sen. Kesha Ram Hinsdale (D/P-Chittenden-Southeast), who chairs the Senate Committee on Economic Development, Housing and General Affairs.
In his parting remarks to Senators, Scott thanked retiring senators for their service, including Sen. Dick McCormack (D-Windsor) and Sen. Bobby Starr (D-Orleans). He reserved special praise for Dick Mazza, the Democratic Grand Isle district senator who stepped down earlier this session as he battles cancer. Despite their different party affiliations, Scott and Mazza have been close for decades.
“In all honesty, it has been very difficult for me, and I know for many of you, to be here without him,” Scott said.
This article appears in May 8-14, 2024.
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