Updates
June 29, 2018

Vermont Legislative Update 6-29-18

A special update from DRM's Government & Public Affairs Team

Lawmakers Adjourn: Session Finally Over

The Vermont General Assembly adjourned its 2018 Special Session on Friday, putting an end to a protracted battle with Gov. Phil Scott over raising taxes. The House took the final action, sine die, on Friday afternoon.

The Special Session began on May 23 and was expected to last for three days. Over the ensuing five weeks, Scott vetoed two versions of budget and tax bills and threatened to veto the third. The intensity grew as the state faced the prospect of a government shutdown with no approved budget on July 1.

The quiet ending on Friday contrasted sharply with high drama and rancorous debate in the week leading to adjournment. Shortly after the House returned to the Statehouse on June 22 to deal with a budget proposal from the Senate, rumors of a deal circulated. Scott and House Republicans insist that the administration and House Democrats had two deals over the course of the evening. House Speaker Mitzi Johnson claims there was no deal.

Eventually, the two proposed budget compromises were abandoned after opposition from Senate President Pro Tem Tim Ashe, P/D-Chittenden. On Monday, the House passed the budget with minor changes over the objections of House Republicans. The Senate concurred, and Scott let the budget become law without his signature.

The resulting budget and tax bills will hold the statewide residential property tax rate steady at this year’s rate, but will allow the non-residential statewide property tax rate to increase by 4.5 cents per $100 of valuation, from $1.535 to $1.58. To avoid a government shutdown, Scott gave in on his vow to veto any tax increase. Democrats gave in on their insistence to avoid using “one-time money” for ongoing expenses. The one-time tax revenue comes largely from companies changing the way they operate due to federal tax law changes and is not expected to reoccur in the next budget year.

The tax and budget bills contain some of the governor’s priorities, including a break on taxation of social security benefits for low and middle income Vermonters, changes to the state personal income tax system to offset increases cause by federal law changes and tuition forgiveness for members of the National Guard. Scott and the Vermont Chapter of the National Education Association have agreed to negotiate a statewide contract to provide teacher’s health care benefits in the coming year.

Over the course of the special session, lawmakers also passed ten bills that had gained final agreement between the House and Senate when the regular session ended on May 13, but which had failed to make it through the final stages of passage. Those include a bill that would set minimum insurance requirements for ride-sharing transportation companies such as Uber and Lyft, H.10; a bill that will merge the departments of liquor and lottery, H.7; and a bill that will study whether to require some manufacturers to share repair guidance with unaffiliated repair shops, H.9. The last bill passed by the legislature during the session would require people who provide short-term lodging to the general public to meet certain standards, including that they obtain a tax identification number, S.6. Airbnb has asked the governor to veto the bill.

Legislators and statewide office holders now look to a primary election on Aug. 14 and a general election on Nov. 6. All House and Senate seats are up for election to new two-year terms beginning in 2019, along with the governor, lieutenant governor and other state Constitutional offices. Vermont U.S. Senator Bernie Sanders, an independent, faces re-election for a six-year term and Congressman Peter Welch is running for reelection to a two-year term.

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