Week 5: January 31st to February 3rd

Any time along the way a member can stand up and be recognized by the speaker. She does so by say "The member from Lowell." or wherever the member is from, The member than can ask to interrogate the member who presented. "Madame speaker I would like to interrogate the presenter of the bill."  And the bill presenter stands up. "The member from Vergennes is interrogated." says the Speaker and a question can be asked.

All debating is done through the speaker. The person asking questions faces the speaker and asks directly,  "Madame Speaker, did the committee take testimony from the Department of Finance?" There are a number of debating rules that are designed to keep personalities out of debate. Members are not referred to by name but rather as "The Representative from ??." The debaters do not look at each other. It's all very orderly.

Last week the BAA was debated twice: the first time was Thursday when the bill came up for second reading. After second reading it sits for a day. When it came up for third and final reading on Friday it was also debated. You can watch the debate on this video about 1 hour and fifty minutes in. 

The BAA (Budget Adjustment Act)

The big accomplishment last week was passing the BAA out of the House. The Senate will now take it up.  Here's a summary of what it does. The BAA included considerable funding for affordable housing initiatives. As was made apparent during the debate continuing programs to house the homeless in hotels has caused local problems. Members argued that the impact on public safety has been significant. To help with this the BAA included about $2 million for "wrap around services" for those being housed in hotels. Those services will help reduce the need for police and EMT services at the hotels. The BAA also requests (again) that the Administration provide a plan for the long term solution to the State's housing crisis. There were several places in the BAA where the funding of a program is reserved until after a plan for its use is developed and approved by the legislature.

My Committee

House Ways and Means continued to hear testimony on the subjects we will be working on for most of the session. We begin with high level descriptions and work down to the details. The topics include:

• Current Use - Vermonters can receive significant state tax savings by enrolling their property in the Current Use program. If the property qualifies it is assessed for education property tax purposes at its agricultural or conservation value rather than its highest use, which is often development.  Summary.

• Pass Through Entities - Legislation has been proposed (H.61) that will enable S-corporations and other entities to pass their tax liability through to the partners of the corporation. 

• Required Town-wide Re-appraisals -It is important to the proper collection of education and municipal taxes that town Grand Lists reflect the true value of the property within the town. The State tracks how far out of wack a town's grand list is. When that value is too far from accurate a town-wide re-assessment is required. Due to the recent spike in real estate values in Vermont many towns require re-assessment. There is a shortage of assessors. House Ways and Means is working on a solution that may involve a state-run property assessing system that assures all property values, over time,  will be accurately reflected in grand lists.

• Taxing Social Security Benefits - H.32 is a bill that will exempt social security benefits from state taxes. We're hearing testimony on the bill.

• Streamline Tax Association - The dramatic increase in online sales across state borders has prompted several problems and solutions. One problem is that companies such as Amazon that sell products to many states must charge state sales tax on what is sold. Different states have different tax structures. A product might get taxed in Vermont differently from how it is taxed in Texas. For instance, there are legislators who would like to tax candy in Vermont. But what is "candy?" If two states tax candy, how does Amazon know each state's definition of candy? The partial solution is the Streamline Tax Association. States that belong to the association agree on definitions so there is one definition of candy. The association lets Amazon know that Vermont and Texas both tax the same agreed upon product. The amount of the tax can be different. It's the product definitions that are streamlined. Vermont belongs to the Streamline Tax Association.

• Child Tax Credit - The federal child tax credit was expanded during the pandemic. That expansion has ended. However, Vermont continued the program during 2022 and may well make permanent changes. 

• Home Health Provider Tax - This is a tax on hospitals, nursing homes, home health, intermediate care facilities, pharmacies, and ambulances. The proceeds from the tax are deposited in the State's General fund and are used to pull down federal matching Medicaid dollars. Home Health providers testified that they are losing money and are unable to pay the tax.

• The Fee Bill - Since 2019 the Governor has not submitted a Fee Bill for consideration by the General Assembly. The fee bill was used to review what the State charges in fees and see if, after inflation, they still provide enough revenue to support the service provided. Though prices have increased, fees have not. This session the House is not waiting for a bill from the Governor. Some fees will need to be increased.

• The Cloud Tax - No, we haven't figured a way to tax the clouds. This is a tax on software that is downloaded from the "cloud" or is paid for with a subscription to a cloud service. Vermont does not have such a tax, but with the increased use of such software there may be one.

Coming Up

Next week's agenda for the Committee on Ways and Means brings us back to the details of the issues mentioned above and a couple new ones as well: school construction,  tax incentives, the unemployment insurance trust fund and transportation fees. Should be exciting !