March 25, 2025

Hello Friends,

It is a very bust time in the statehouse with all the bills that made it out of committee coming to the floor. Plus, there was a showdown with the Governor on the Budget Adjustment Act you might have heard about. Here are the substantive actions to be aware of:

Property taxes –

The Ways and Means Committee decided to use all of the unspent surplus from last year to buy down next year’s property taxes. This was an understandable political decision after the hue and cry over property taxes during the last election cycle (and the absolute drumming the Democrats took in the election). Due to the absolute chaos the federal administration is causing, and the potential debilitating impacts of further cuts to programs which direct federal money to Vermont, I am in favor of a more prudent approach.

Using all our surplus to buy down the property tax rate this year will result in a just over 1% increase ON AVERAGE (each town will vary). However, it sets us up for a huge increase next year under normal fiscal circumstances, and we are potentially going into a budget abyss and an economic recession. We limit our flexibility by using all this money in one year.  I think Vermonters would be better served by a more conservative approach that looks out beyond a single year.

My feelings on this are also influenced by the discussion of education reform, which is the main driver of property tax increases. It is clear that the reform process will take a couple of years to figure out and 4-5 years to fully implement. The education system is too important and too complicated to reform quickly. Therefore, any potential savings will take a few years to manifest.

Given this reality, the next few years could be very rough if we have 1) no state surplus, 2) severe federal cuts to the Vermont budget (36% of the VT budget is Federal money), 3) a recession and 4) limited education spending relief. Let’s hope these conditions don’t all coincide! My advice is to save as much money as you can now and be ready for volatility.

For a good Vermont Public summary piece on this issue click here.

Housing -

Last week the housing committee passed, H.479. The bill supports many housing programs, provides new investment in infrastructure, calls for several housing related legislative studies and seeks to reduce municipal permit appeals for housing projects. This bill partially addresses this strong need in Vermont to increase the supply of affordable housing.

Health Care -

The Health Care Committee has been busy, passing out four bills. These four bills will greatly strengthen oversight and accountability of our hospital budgeting process (H.80), bring Vermont improved access to psychologists (H.237), create safer workplaces for hospital workers (H.257), and put in place financial guardrails for our insurance providers by allowing regulatory intervention to stabilize them in a fiscal emergency (H.482).  This last bill is a response to Blue Cross being on the verge of insolvency. These are building blocks for stabilizing a system in crisis.

Two articles that review many of the legislature’s recent activities...

·         https://www.vtchamber.com/vermont-legislative-session-affordability-update/

·         https://www.vermontpublic.org/local-news/2025-03-19/5-policy-bills-through-vermont-legislature-crossover-deadline

Here are the dates to weigh in on the updated Climate Action Plan.

Please keep in touch,

Chris Morrow

cmorrow@leg.state.vt.us