On Tuesday, C.J. Spirito, Head of School at Rock Point School in Burlington joined the Senate Education Committee to talk about H.483.

Rock Point is a small independent school with students ranging from “high-flying, college-bound students to kids in the hospital because they can't function or are not getting to school.” They are not competing with public schools or larger schools for students, he noted.

He was there to raise concerns about some of the major provisions in the bill and how they would impact his specialty school. He noted that if they “took any kid without an admissions process,” they would not be able to “protect the space for the kids that are here now” and continue to successfully serve them. The bill would put the school in a difficult place because they would have to deny publicly-tuitioned students that they could help, in order to protect the current students.

Dear Senate Appropriations Committee,

While we may differ on whether or not the Clean Heat Standard is the best path forward at this time, it is clear that this is the intention of the legislature. We would like to offer some constructive feedback on aspects of the bill that we believe are problematic to the stated goals of accountability, affordability, and carbon-reduction.

Before we dive into this week's update we need to get something unfortunate out of the way. Last week we had reported that the House had gutted the "check-back" provision in S.5 that requires the Public Utility Commission (PUC) to bring the Clean Heat Standard rules back to the legislature for a vote. This was in fact incorrect. The provision in question had been added in the Senate, not by the House Environment & Energy Committee as we had indicated. Our reporter on the bill didn't catch that provision until the walk-through in that Committee and didn't realize it was in the underlying bill, not the amendment being offered by the Committee. Our apologies for this mistake.

That being said, the provision in question is still concerning because it could potentially allow the PUC to skirt the "check-back" provision in the bill. The House did offer an amendment on the floor in an attempt to address this, but we will encourage legislators to strengthen the check-back provision and limit workarounds.

The bill creating the Clean Heat Standard (S.5) passed the House this week 98-46, two votes shy of a veto override. The bill now moves back to the Senate to see if they will agree with the (relatively minor) House changes or if a Committee of Conference will be called for. The Senate was one vote short of being able to sustain an override when they voted on the bill back in March.

The bill creating a carbon-pricing scheme, known as the Clean Heat Standard (CHS), reached the House floor on Thursday. Representative Sibilia presented the bill on behalf of the Environment & Energy Committee.

She described the bill as having the Public Utility Commission (PUC) develop the marketplace and rules for implementing the CHS. They will provide the 2025 legislature and Governor with the rules to implement the CHS. That is “all we are voting on today,” she claimed. She continued that “a yes vote today will not increase the cost of Vermonter’s fuel or protect the cost. We are not voting on those things today. We are voting on those things in 2025.”

On Tuesday, Representative Sibilia gave the Committee the history leading up to the S.5.

• In 2016, Governor Scott joined other states in committing Vermont to meeting goals of the Paris Climate Accords.
• In 2020, Vermont passed Global Warming Solutions Act (GWSA). The GWSA sets the mandates for greenhouse gas reductions, established the Climate Council to come up with the Climate Action Plan (CAP). The Clean Heat Standard (CHS) is the primary thermal sector solution for the CAP.

Sibilia claimed that Vermonters wanted them to act on climate, citing a poll that says 76% support climate action.

On Tuesday, the Joint Fiscal Office (JFO) gave the Senate Finance Committee an overview of the IT Modernization Fund, which has historically been supported by an internal service charge (a fee charged to each agency of department based on their overall budget). The Governor’s budget this year recommended that it be its own line item in the budgets for each fund (General Fund, Education Fund, Transportation Fund, etc.) in order to be more transparent.

On Friday, Oliver Olsen (Former Chair, State Board of Education) joined the Senate Education Committee to speak on H.483 as a parent, former legislator, and community member from Southern Vermont. During his tenure, he oversaw the “significant effort” of updating the rules governing the approval of independent schools.

On Thursday, the Senate Education Committee heard from Heather Bouchey (Interim Secretary, Agency of Education) and Chris Kane (Interim State Director of Special Education, Agency of Education) on H.483. Bouchey stressed the nature of public process and 2200 rulemaking stakeholder engagement. She believed this needed to be “implemented and experienced” as independent schools engage with that newly developed process.

Chairman Campion welcomed Jay Badams (Superintendent, Norwich/Hanover Interstate School District ) to the Senate Education Committee on Wednesday, saying they wanted to know about the “whether there is ever any admissions process in our public schools.” He described H.483 as asking for “a kind of open enrollment where public dollars follow kids to whatever school they want.” He added that he thinks that is happening now in a lot of schools.

Two more major bills moved this week. In the House, the bill creating a carbon-pricing credit system advanced out of the Environment & Energy Committee with some relatively minor changes. However, it does provide some additional flexibility to the Public Utilities Commission to pause the credit program due to market conditions such as workforce shortages or supply chain issues. Additionally, the penalties on fuel dealers were reduced from 4x the credit amount to 2x.

The second major move was a bill passed by the Senate that would double legislative pay and create a new benefits package for legislators that includes health insurance and child care services. The goal is to make the legislature more attractive and accessible for working-class Vermonters, but it is still a historic increase in compensation for the State's citizen legislature.

Wednesday

The Committee began marking up S.5 on Wednesday. Chairwoman Sheldon asked if cooking was included in the definition of thermal sector and therefore covered under the bill. Legislative Counsel confirmed that it was included and transitioning from gas to thermal induction stoves in restaurants qualifies for credits.

The compensation and benefits bill for legislators, S.39, hit the Senate floor on Thursday. Senator White presented the bill on behalf of the Government Operations Committee and was followed by Senator Baruth for the Appropriations Committee.

The House Corrections and Institutions Committee took up water quality on Wednesday, hearing from Eric Blatt (Director of Engineering, Water Investment Division). Chairwoman Emmons noted that Appropriations usually includes 1:5 matching funds for the revolving loan fund as well as a state match for clean water and drinking water grants.

On Tuesday, the Senate Finance Committee took up H.492, which sets the property tax yield amounts that determine local property tax rates. Representative Kornheiser and Representative Beck from House Ways & Means joined the Committee to explain the bill.

Wednesday

On Wednesday, Chairman Campion asked Legislative Counsel to share, with the Senate Education Committee, background on Act 49 and Act 173 and how they relate to independent schools. Act 49 was passed in 2017 and created a task force on independent schools. The task force was split and could not find a consensus; instead of offering a comprehensive report, each member issued their own recommendations around enrollment policy, if schools should be required to deliver special education and which categories should be required, and special education required reporting. The legislation also paused rulemaking until the legislature could act on these issues.

The House Environment & Energy Committee returned to discussion of the Clean Heat Standard (CHS) in S.5 on Friday after taking testimony during the week largely from environmental advocates.

Legislative Counsel walked through H.492 on Thursday with the Senate Finance Committee, noting the modest (3.84%) increase in expected tax bills on Vermonters. There was a debate about what the purpose the December letter from the Tax Commissioner was (this is a letter that estimates the state yield amount that is sent to the legislature and school districts at the end of each year). Chairwoman Cummings clarified that it was meant to be a tool for school boards and voters to understand the tax rate impacts of their school budgets. A new thing this year is that $22M was set aside in a reserve fund in case a property tax buy-down is needed next year.

The Senate Government Operations Committee took up H.429 on Friday. Harlan Smith was the first to speak. He has many family members in the military, including his son. He has also experienced that “certain members” of our community will, if they see you have not voted recently, push to have you deleted from the voter rolls.

On Tuesday, Chairwoman Kornheiser asked Legislative Counsel to walk the House Ways & Means Committee through the draft language making changes to the two tax credit programs.

Legislative Counsel explained that the draft language which would amend the EITC and Child Tax Credit has lots of moving parts; part-time and full-time residents would both eligible. The Child Tax Credit was described as a “refundable credit” against Vermont income tax liability. Taxpayers receive $1000 per qualifying child five years old or younger. The payments will change, under this bill, from a lump sum payment (at filing) to a quarterly payment system that the tax department will create. This is similar to how the tax credits for individual health insurance plans work today.