The Money Bills... - 3/29/26

Greetings!

It was quite a week in the statehouse! Instead of being in our committees, we were in the main chamber debating and voting on the dozens of bills that had passed out of the various committees in the previous weeks. We tackled the big bills – the budget, the yield bill (which sets the property tax rate) and the Transportation bill – along with many other important bills.

Most bills passed with little contention but others got diverted into long tangential discussions of minor elements of the bill. But the drama and disconnect came on the two money bills – the $9.3 Billion budget (up only 1.9% over last year, but way up from 5 years ago) and the yield bill which gets into education policy because it sets the property tax rate and plays with “surplus” funds.

In a display of poor fiscal policy the legislature has been “buying down” the property tax rate the last few years. While this gives much needed immediate relief, it creates a big bump in the following year’s rate. For instance, school budgets alone will raise property taxes, on average, about 4.9% in fiscal year 2027, but, because of last year’s buy down, property taxes are slated to go up 11.9%. The Governor, and therefore House Republicans, wanted to use the maximum amount of “surplus” (just over $100 million) to reduce this year’s property taxes, whereas the Ways and Means Committee and most House Democrats wanted to spread the buydown over two years to give significant relief this year (down to a 7% increase) but save half for next year, reducing the potential extreme rate increase. The context of this is that the state’s economic outlook is declining and there is no guarantee of any significant surplus to buy down the property taxes next year (which would result in a roughly 15% increase).

On the yield bill, Republicans gave very heartfelt, compelling and accurate accounts of how Vermonters are hurting and why they need all the tax relief this year. The Dems were the hard-hearted fiscal conservatives, opting to think ahead to next year as well and to factor in the weakening economy.

The very next day, when discussing the budget, the roles were reversed. The Republicans voted against the budget because there was a slight increase and some allocation of one-time funds, accusing the Dems of being fiscally irresponsible. The budget, which was voted out of the Appropriates Committee unanimously (with Republican votes), doesn’t keep pace with inflation and it supports the very Vermonters the Republicans were correctly pointing out the day before are hurting and need our support. Politics is a strange planet.

There is no right answer. Many Vermonters are hurting badly, having to make gut wrenching decisions about what bill to pay next or whether they can even afford to stay here. How does the State best support them? Your legislature is wrestling with these issues in a very real way.

In addition to the money bills, we passed a tight transportation budget, an important bill revamping how homelessness is dealt with in VT (H938), a bill to make it easier for homeless youth without guardians to get services, a bill protecting Vermonters from any future siting of data centers in the state (so our rates won’t go up due to them), a potentially important reform to tenant-landlord law (I will revisit this one), a bill enabling a prescription drug discount program with other states (with big potential to lower prices), an upgrade and expansion of emergency management response capacity, and many, many other bills. Keep in mind, all these bills go to the Senate now so they are not final and not law.

On Education – the House Education Committee seems to be coalescing around creating mandatory shared services districts across the state with a framework and incentives for consolidation where locally appropriate. I think this is a reasonable middle path, although the details will matter greatly on this! The Agency of Education and the Governor don’t like it. And it is different than the Senate’s path, so there is a way to go before this plane lands…

What is not being talked about publicly is the role of the Agency of Education in the education reform process. The AOE is a shell of its former self. Over the last decade, there has been disinvestment in personnel and management capability. Both the special education reform attempt (Act 173 of 2018) and the previous consolidation attempt (Act 46 of 2015) were poorly managed, and the AOE did not implement the intent if the legislation. So, whatever comes out of this year’s effort, we need to find a way to either bypass AOE (not good policy) or hold them accountable to properly implement the new law. This is a very difficult conundrum given the level of staffing there now, the massive loss of institutional memory and the combative nature of leadership. At this point it is hard to even get accurate data from AOE, let alone charge them with massive educational reform.

Your legislature has been working long hours on the many challenges facing Vermont but there is a long way to go. We are scheduled to be done by mid-May, so it will be a busy 6 weeks!