Legislative Update - May 10, 2021

We are getting close to the end of the legislative session. Many major bills have now been passed by both chambers. Some of which we are excited about, some of which could be better. Pension reform and student weighting factors are headed for summer study committees. Economic development and broadband were stripped of key components that would generate both short and long-term success. The Ethics Commission will get the additional staff it needs, but a comprehensive code of ethics will wait until next year. It's a mixed bag.

Economic Development

The Senate Economic Development Committee finalized language this week that would provide $150k in funding for BIPOC owned businesses along with a follow up interview process to learn more about what types of businesses are accessing the funds and how the Agency of Commerce and Community Development can better support them.


House Ways and Means, after torpedoing project-based TIFs last week, shifted focus to the existing TIF program. The new rules would limit the number of TIF districts a municipality can have; Bennington and Montpelier are limited to one for example. Municipal advocates argued that the ARPA funding is a large pot of money, but not nearly enough to pay for what is needed.


Senate Finance voted out the broadband bill this week. Two significant differences from the House version are that the Senate wants internet service providers (ISPs) to be able to access grant funding without going through the local Communication Union District (CUD) and the Senate version allows the Department of Public Service to get a head start on funding projects while the new broadband authority is set up. Unfortunately, the Senate punted on addressing affordability concerns around accessing and maintaining service and also chose not to pursue intermediate solutions to fiber cable. This effectively tells Vermonters without access to broadband they are out of luck until new construction reaches them.



The House Ways and Means Committee spent two days last week on student weighting factors. These are the adjustments that are used for calculating property tax rates at the local level. The main issue is that there are concerns (likely well-founded) that rural schools are being underfunded due to the current weighting factors. A study commissioned by the Legislature two years ago identified a new set of weights to address this issue. The current bill would create a task force to make recommendations for implementing the new weighting factors. There is also some concern about the disparity between the spending per student across school districts. Representative Beck argued that this was the largest disparity in the country and that part of the goal should be to compress the variance in spending.

The new weights would use a similar formula - taking into consideration things like english language learners, poverty, and grade level - but would increase the weighted value of those factors and a new one for population density. These weighting factors are meant to compensate for students that are more expensive to educate by artificially increasing the student count in the district for the purposes of the education tax rate calculation. A larger weighting factor would allow a district to spend more on their school(s) without increasing their tax rate.


Fiscal Responsibility

The Senate suspended rules to give final approval to the pension bill, H.449, on Friday. During the floor debate, Senators seemed to point the finger at the previous Vermont Pension Investment Committee administration for our current situation. We think there is plenty of blame to spread around. There were few questions about the bill but there are some differences in the governance changes between the House and Senate as well as some changes to the scope of work for the summer task force. Notably, health care benefits are not included under the purview of the task force.


Government Accountability

After brief testimony, the Senate Finance Committee passed H.135 on Friday which would maintain funding for the Vermont Ethics Commission and add a part time administrative staff person to support its operations. There was discussion of identifying a long-term funding source so they don't have to keep renewing it every year. The Committee is likely to take that issue up next year. We are also hoping that the government operation committees will adopt the draft code of ethics the Commission put together last Fall.


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