January 14, 2022
The Vermont Chamber testified in the Senate Economic Development Committee urging changes to the $30 million Bridge Grant program to make the application process easier so businesses can access these funds. With only $3.6 million allocated in 2021, the Committee appears willing to make changes. The Vermont Chamber aims to protect this funding from being reallocated and supports providing the Agency of Commerce greater discretion to determine need beyond just a net loss year over year. Priority should be given to applicants in the restaurant and lodging sectors, which have been impacted most. The Vermont Chamber also urged the Committee to make this change in the first month of the legislative session to expedite the grant relief to businesses who are now faced with further impacts due to the fast-spreading Omicron variant.
The Vermont Chamber testified in the Senate Economic Development Committee in support of creating a statewide short-term rental (STR) registry. The testimony referenced Vermont Futures Project research and noted that the STR market and Vermont’s housing shortage must be part of the same conversation. The Committee revisited S.79 and discussed a new bill, S.210, which seeks a path to compromise by addressing some of the concerns outlined in Governor Scott’s S.79 veto message. Both bills address rental housing health and safety and contain provisions to create a short-term rental registry. A registry would serve as an important step to ensure a safe rental environment by providing an avenue for communication and data collection.
After years of stalled attempts to modernize Act 250, legislators and advocates seem hopeful that this could be the year, though the path toward modernization is unclear. This week, two bills that emphasize housing development were reviewed. Both bills would change how Act 250 is applied in designated downtowns and Neighborhood Development Areas and reduce Act 250 responsibilities for developers, while creating additional work for municipalities beyond the designations that they have already received. The Vermont Chamber will continue to advocate for Act 250 modernization that will reduce redundancies for all parties and make permitting more predictable and less costly.
The Senate hosted a roundtable with industry leaders to discuss housing issues, specifically the importance of removing barriers that prevent production of housing units quickly. The Vermont Chamber’s suggestion to incentivize the conversion of unused commercial space into housing was emphasized in the conversation as a potential new solution. In the House, funding for housing for the missing middle-income development pilot program stalled with committees looking for more details on how this program would work. The Vermont Chamber has advocated for funding of this pilot program, the first to focus on the need for middle income housing and will support efforts for the Senate to put this program back into this bill.
The Senate Judiciary Committee reviewed S.180, which would address organized retail theft by making a string of petty larcenies or misdemeanor retail thefts within a 6-month period a new category of felony if committed in coordination with another person. With businesses short-staffed and struggling to hire loss prevention and security personnel, some retailers are asking the Legislature for relief. Hesitation among some legislators hinged on whether elevating this crime to a felony would sufficiently deter theft for those with no expectation of being caught and charged with a crime. The Vermont Chamber supports retail businesses as this legislation is considered to address organized theft in Vermont’s downtowns.
The House Ways and Means Committee reviewed the findings and recommendations of the report from the Unemployment Insurance (UI) Study Committee. There is interest in increasing weekly benefits by raising the minimum and maximum amount a recipient can collect, which the Vermont Chamber is concerned could draw down funds from the UI Trust Fund at an unsustainable rate. There is also an effort to institute a surcharge for a separate fund to pay for extra benefits for recipients, administrative costs, or system modernization. The Vermont Chamber is concerned about increasing taxes and new fees for employers, especially now as many are still struggling with the ongoing impact of the pandemic. Also, of concern for businesses is increasing weekly UI taxable wage base as the labor shortage continues to negatively impact business recovery. The Department of Labor is also constrained by the 1970s-era mainframe computer system. IT modernization must be a priority before implementing any policy changes.
The Senate Finance Committee discussed S.53 which proposes changes to corporate income tax structure. Included is an increase to the minimum corporate income tax rates, making it significantly more progressive for all, but the smallest C Corporations. Other provisions in the bill, including a move to a single sales factor, could lower tax liabilities for C Corporations. Without the inclusion of the alternative minimum tax proposal, these changes are expected to be close to revenue neutral, largely benefiting C Corporations with a physical presence in Vermont that sell out of state. This bill also includes an amendment to create a far-reaching cloud tax, a perennial issue that the House supports but has traditionally run into opposition in the Senate. Preliminary analysis suggests the Senate will not be favorable to this new tax again this year, especially since State revenues are up and there are significant federal funds to fund programs. The Vermont Chamber has successfully opposed this tax each of the last five years. 
Join the Vermont Chamber on January 25 and 26 to explore national and state economic trends facing Vermont businesses in the coming year. Hear how Vermont can become an economic leader by welcoming all, supporting and growing our diverse communities, and leaning into our state's strengths. Learn about our speakers and view the full agenda. Register for this two-day virtual conference.
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