Opinion: Baser offers views on session

I write just before we head into a special legislative session. Here are my thoughts on this year’s legislative session’s most noteworthy actions. They include: Paid Family Leave, Minimum Wage, Special Education Reform, a revision to Vermont’s income tax code, gun legislation, and a Clean Water debate.
Gov. Scott has been consistent in his policy of no new or increases to fees or taxes during this legislative biennium. Last year we kept property taxes level using a combination of one-time money and other accounting moves. This year we entered the final weeks with a $58 million gap in the Education Fund, so we either raise the education property tax or allocate money from the General Fund to balance the education budget. Democratic leadership is suggesting a combination of one-time money and an increase in the Homestead property tax of 2.5 cents and an increase in the non-homestead property tax of 5.5 cents. The governor says no to that proposal. He points out that the state has enjoyed an injection of approximately $150 million in extra revenue this year. The governor feels this should allow us to hold the line on taxes and so, there will be a special session to sort this out. I believe there is a way to keep the education portion of people’s property taxes level and satisfy the Democratic leadership.
I helped draft the Paid Family Leave Bill. It is a good measure for employees, families and business. Childbirth accounts for almost 80 percent of the utilization of paid family leave according to other states’ records. Studies have also shown women who take leave for childbirth return to their old job at much higher rates than women who do not have this benefit. There is also a positive benefit to employee morale, a good thing for business. Plus this benefit will distinguish us from most other states making it a good recruitment tool. Employees will pay for this via a 0.13 percent payroll tax. That equates to $1.30 a week for someone earning $52,000 a year.
The Minimum Wage bill almost did not make it to the House floor due to lack of support in the House Appropriations Committee. Deal making and arm-twisting forced the bill out of committee late in the session and, by a small margin, it passed. I am not a big fan of the way this bill emerged. It is almost certain to put a great deal of stress on our small businesses, with particular hardship being felt by those businesses in Vermont’s rural areas.
Special education legislation aims to re-shape how we fund this program and how we teach those students that qualify for special education. A key take away is that the state will develop a special education funding formula based on census data rather than on the current payment for service method. School district demographics, poverty levels, total school enrollment will all go into determining how much a school district will receive for special education. Who teaches qualifying students will also change. The hope is we can obtain better outcomes and save money.
Filing your state income taxes next April will be different. Some of the key changes include an exemption on taxable Social Security benefits from state income taxes for single filers with less than $45,000 in adjusted gross income (AGI) and married filers with less than $60,000 in AGI. It then phases out the exemption over the next $10,000 in income. We increased the earned income tax credit to 36 percent of the federal benefit for low-income Vermonters.
A controversial section was limiting charitable contribution deduction to a 5 percent credit on the first $20,000 of gifting. This will not impact most people, but large donors will find their benefit curtailed. We also decreased everyone’s tax rate. It is not because we don’t need the money, it’s because the change to the federal tax code this year meant Vermonters would have paid an extra $30 million in state taxes. We wanted to be sure this didn’t happen.
Public safety in the form of a gun bill, red flag law, and improvements to school infrastructure dominated a few weeks mid-session. The most meaningful of these bills were those that provide $6 million for school safety, and allowed law enforcement to remove weapons from a household when a situation is deemed dangerous to occupants. We also moved to allow the confiscation of firearms from people who make threatening gestures to public safety.
There were a host of bills focusing on water clean up. Some passed, others did not. Those efforts that fell short often had provisions that would have been onerous to our farming community, which is spending millions to improve their management of the land. Providing future funding for clean water was also controversial. While we have full funding through fiscal year 2021, there is no funding strategy for the approximate $7 million shortfall anticipated in 2022 and beyond. A funding battle ensued. Hopefully this will be dealt with in the next biennium.
For more details on this biennium’s bills go online to Legislature.vermont.gov.

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