Statehouse Journal: April 15th to April 19th

Ed Funding Bill out of Committee

The "Yield Bill" (H.887) which sets the numbers used in calculating Education Property Taxes throughout the state, came out of House Ways & Means last Wednesday on a party line vote.  The next day it was introduced on the House floor and routed to the Committee on Appropriations. That committee proposes small changes and voted along similar lines to send it to the House floor this coming Tuesday. 

The Governor held a press conference to voice his disapproval. House leadership held a press conference to demonstrate the support of several education related associations: superintendents, principals, office managers, and others. That's the photo.

Education Funding - The Yield Bill

A Twisted Path for Education Funding

We had hoped to get the Yield Bill (H.887) out of committee last week but there was strong opposition from "The V's." That's the several organizations that represent the education professions of Vermont. Most of them begin with a "V" as in Vermont School Boards Association (VSBA). As a result, Ways & Means met by Zoom on Monday and made changes on Tuesday. The best summary is part of the fiscal note prepared by the Joint Fiscal Office. Here it is a portion:

This bill sets the property dollar and income dollar equivalent yields for the purpose of setting homestead tax rates. It also sets the nonhomestead property tax rate. The bill expands revenues to the Education Fund by repealing the sales tax exemption for prewritten software accessed remotely. It also imposes a 1.5% surcharge on short-term rentals, with all revenues dedicated to the Education Fund. The bill establishes several working groups and commissions, including the “Commission on the Future of Public Education in Vermont,” the “Educational Opportunity Payment Task Force,” and the “Education Fund Advisory Committee.”

"Expanding Revenue" means taxes: the "Cloud" tax and the surcharge on Short Term Rentals.

The Cloud Tax

In the "old days" when you wanted to buy some software you went to Best Buy or some such store and purchased it on a CD. When you handed over the cash, you paid a sales tax. Now software is downloaded from the Internet (the Cloud), but since 2015 there has been a sales tax exemption in place for such transactions. The Yield Bill repeals that exemption, resulting in a projected $22 million of additional revenue to the Education Fund which will reduce the amount needed from Property Taxes.

The Short Term Rental (STR) Surcharge

H.887 also imposes a 1.5% surcharge on rentals of Short Term Rentals. This is in addition to the 9% Meals and Rooms tax they already pay. There is a very specific definition of a Short Term Rental in Vermont law. It is:

“short-term rental” means a furnished house, condominium, or other dwelling room or self-contained dwelling unit rented to the transient, traveling, or vacationing public for a period of fewer than 30 consecutive days and for more than 14 days per calendar year. As used in this subchapter, “short-term rental” does not mean an occupancy in a lodging establishment licensed under 18 V.S.A. chapter 85.

These are primarily AirBnBs and such and not hotels. The surcharge will bring in an additional $7 million to the Ed Fund each year. Some people are disappointed that the surcharge is only 1.5%. It started at 3%. Those are the people that don't like out-of-state investors buying big houses and using them as STRs. Those business reduce housing for Vermonters and add pressure to the rental market. Other didn't like the surcharge at all because it provides some income to Vermonters wanting to make a little extra income so they can remain in a high-cost state.

Cost Containment

Nearly everyone wants "Cost Containment." Instead of continually adding new revenue (taxes) to provide more money to the schools, we should enable (or force) the schools to reduce their costs: cut staff, cut teachers, increase class size, and/or close small schools. But there is always the caveat: "and maintain high-quality education opportunities for all Vermont students." 

H.887 repeals the pause of the "Excess Spending Threshold" that was imposed during COVID. When school boards put together their budgets this coming fall for the 2025-26 school year they will have to consider the additional tax rate that will be applied if they are 20% above the statewide average Per Pupil Spending of the previous year. 

The Common Level of Appraisal (CLA)

The bill changes the methodology used when the CLA is applied to the calculation of tax rates. It's really no change in tax rates but smooths things out a bit, and (unfortunately) makes the CLA a more complicated to understand.

Long-Term? Two work groups.

There has been a lot of pressure to make big changes in the way public education is funded in Vermont. Many want it done immediately while others urge the Legislature to go slow and not screw it up.

The result is that H.887 has two work groups: one from the House Committee on Education and the other from Ways & Means.

The Education Fund Advisory Committee

Ways & Means proposes the creation of an Education Advisory Committee. The 12-member committee will monitor Vermont’s education financing system, conduct analyses, and perform various duties including:

The Commission on the Future of Public Education

The House Education Committee proposes the creation of a Commission on the Future of Public Education. 

The Commission shall study the provision of education in Vermont and make recommendations for a statewide vision for Vermont’s public education system to ensure that all students are afforded substantially equal educational opportunities in an efficient, sustainable, and stable education system. The Commission shall also make recommendations for the strategic policy changes necessary to make Vermont’s educational vision a reality for all Vermont students.

There are roughly 25 commission members from education related entities. The commission will: 

The Yield Bill will come to the House floor for debate on Tuesday of this coming week. Rumors are that there are MANY proposed amendments. After that, if it passes the House, it will be sent off to the Senate.

Guns and Elections

S.209 came over from the Senate in mid-March and was sent to the House Committee on the Judiciary. They voted it out last week and it came to the floor for extensive debate. The bill has two main parts: Ghost Guns and Guns at Polling Places.

Ghost Guns

Ghost guns are guns that are usually created through the use of a 3D printer. The parts are "printed" and assembled. They do not have serial numbers, so cannot be traced after the commission of a crime. The bill proposes that any such guns must be "serialized." The owner must take the gun to a firearms dealer and have a serial number imprinted on it. The serial number contains a federal firearms license number. This will enable law enforcement to trace the origin of a ghost gun used to commit a crime.

Weapons at Polling Places

The bill came over from the Senate with the portion on ghost guns. House Judiciary amended it by adding a portion on guns at polling places. Basically the amendment prohibits guns at polling places during elections.

The votes

When the bill came up for a vote the "question was divided." One member of the House requested that the bill's two portions be separated and votes be taken on each section separately. The portion on guns in polling places was a roll-call vote. I voted yes. Here's how everyone else voted. It passed with a vote of 110 to 31.

The portion on ghost guns passed with a voice vote. Further action on the bill was postponed until Tuesday of this coming week.

Wildlife Managment

Another bill that came over to us from the Senate was S.258. It is now in the House committee on Environment and Energy, but should be  coming to the floor this coming week.

The bill adds two members to the Fish and Wildlife Board. The new members would be appointed by the Legislature. The idea of the bill, and the reason it is controversial, is because it is trying to get away from the State's wildlife policies being slanted toward "consumptive" purposes. Consumptive purposes are hunting and fishing. The bill also outlaws the use of bait and dogs when hunting coyotes

Next week: Debating Ed Funding

Tuesday of this coming week should be interesting. That's when the Yield Bill (H.887) and all the proposed amendments come up for debate and votes.

Over in the Senate, the State Budget has come out of Senate Appropriations and should be coming back to the House soon. The Senate has made changes and, no doubt, a committee of conference will be set up to work through the differences.

The target end of the session in May 10th, so there is not much time left.