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A weekly briefing on legislative, regulatory, and policy developments in Vermont and beyond.

The Update from Montpelier May 20, 2025

As the 2025 Vermont legislative session stretches beyond its usual adjournment date, the state finds itself confronting multiple, intersecting crises—each magnified by economic uncertainty, federal funding questions, and ongoing litigation. While lawmakers have reached a tentative agreement on a record-setting $9 billion budget for Fiscal Year 2026, several key policy reforms remain unfinished, delayed, or under threat.

Vermont’s health care system is under extraordinary financial strain. Blue Cross Blue Shield of Vermont and MVP Health Care—the only two insurers offering plans on the state’s health insurance exchange—have filed for significant rate increases for 2026. Blue Cross is seeking a 23.3% average hike for individual plans and 13.7% for small group plans. MVP’s requests, though lower, are still notable at 6.2% and 7.5%, respectively. These filings come as the Green Mountain Care Board (GMCB) warns that containing premium increases to around 5% would require $200 million in spending cuts across the system.

The state’s housing shortage presents another urgent threat to long-term economic stability. With an estimated 41,000 new housing units needed by 2030—and current production meeting just a quarter of that—demand continues to vastly outpace supply. A legislative package intended to expand infrastructure investment and reform permitting barriers, including project-based tax increment financing and streamlined wetlands appeals, may not survive the session. Central to the effort is the Community and Housing Infrastructure Program (CHIP), designed to finance housing-supportive infrastructure using incremental tax revenue. However, late-stage amendments from the House Ways and Means Committee have added fiscal constraints and regulatory complexity that risk undermining the program’s intended impact.

Following last year’s steep property tax increases, lawmakers have also launched a sweeping attempt to overhaul Vermont’s education finance system. H.454—the so-called “education transformation” bill—proposes new funding formulas and district consolidations. Yet as the bill advances, it has raised questions about equity, local control, and how to reconcile district-level debt and staffing disparities across the state. With key elements still in flux, its future may hinge on negotiations during the upcoming veto session.

At the same time, Vermont’s transportation policy is evolving quickly in response to infrastructure demands, revenue challenges, and the accelerating shift toward electric vehicles. The state’s long-planned Mileage-Based User Fee (MBUF) for battery electric vehicles is set to begin in 2027, replacing lost fuel tax revenue with a per-mile charge. PHEVs will continue to pay the existing Electric Vehicle Infrastructure Fee, while policymakers consider adding a surcharge on electricity used by out-of-state EV drivers charging in Vermont.

Meanwhile, Governor Phil Scott’s Executive Order 04-25 has temporarily paused enforcement of Vermont’s electric vehicle sales mandates—specifically, the Advanced Clean Cars II (ACC II) and Advanced Clean Trucks (ACT) rules modeled after California’s regulatory framework. These rules require 35% of new vehicle deliveries to be electric by Model Year 2026 and 100% by 2035, with similar thresholds for medium- and heavy-duty trucks. The Governor’s order acknowledges the real-world constraints of these mandates, including inadequate charging infrastructure and limited availability of heavy-duty zero-emission vehicles. It also responds to growing concern from auto dealers over vehicle supply imbalances and manufacturer-imposed quotas that may restrict consumer choice.

Finally, Vermont is entangled in multiple climate-related legal battles. The U.S. Department of Justice is suing to block implementation of Vermont’s Climate Superfund Act, arguing that the state’s attempt to impose retroactive liability on fossil fuel companies violates federal law. In turn, Vermont has joined 16 other states in suing the federal government over its failure to release billions of dollars in funding for EV infrastructure—a delay that could cost the state nearly $16 million. Meanwhile, the Conservation Law Foundation has filed its own lawsuit, accusing Vermont of failing to meet the mandates of its Global Warming Solutions Act.

Listen to the Meadow Hill View from Montpelier, every Tuesday at 7am on WVMT. You can also watch and listen here.

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Meadow Hill helps navigate Vermont’s business, political, and regulatory landscape. We provide management and advocacy assistance to trade associations, focusing on energy, transportation, and economic development. Learn more about us at MeadowHillVT.com

The Update from Montpelier May 5, 2025

Budget Talk The Vermont Legislature is advancing a $9.1 billion state budget for Fiscal Year 2026, representing a 2.4% increase over last year. To ease pressure on property taxpayers, $77 million from the General Fund is being directed to the Education Fund. With this one-time money, property taxes are likely to rise by only 1%; without it, the increase is pegged at 6%. Recognizing uncertainty at the federal level, the budget gives the state's Emergency Board access to Vermont’s nearly $100 million "rainy day" fund to guard against potential cuts to federally supported programs

Taking Stock Lawmakers got a clear warning this year: Vermont’s healthcare system is in serious trouble. State officials, hospital leaders, and the Green Mountain Care Board all said the system is close to breaking down. Businesses could be hit hard with higher insurance costs, less access to care, and more pressure on the workforce. Complicating the situation is uncertainty over next year’s federal funding related to medicaid reimbursements.

Ed Fund The Senate Education Committee is expected to finalize its work on a major education reform bill in the coming days. Reaching a compromise between the House, Senate, and Governor remains one of the biggest hurdles to adjournment—and could push the legislative session into June. The bill is likely to result in the consolidation of Vermont’s 119 school districts into fewer than 20, each governed by a regional school board and managed by a central office. Supporters say this will streamline operations and improve efficiency. The legislation also introduces a new foundation funding formula, establishing a baseline amount of state aid per student. The reform effort aims to address rising property taxes, increasing education spending, and a shrinking school-age population. Opponents have raised concerns about the potential for school closures, particularly in rural areas, and the erosion of local control. They also warn that district consolidation could negatively impact education quality in smaller communities.

CHIP-ing In The House Ways and Means Committee will begin working on S.127 this week, which establishes the Vermont Community and Housing Infrastructure Program (CHIP). Using incremental financing, CHIP aims to address Vermont’s urgent need for housing-supportive infrastructure. Watch this to learn why Vermont needs CHIP.

Three Acres Some property owners with more than three acres of impervious surface may get more time to meet the state's stormwater rule. Legislation (H.481) aims to make compliance easier for both homeowners and businesses.

Unpaid The Senate Economic Development Committee advanced a bill (H.461) that expands who qualifies for unpaid family leave and updates the definition of “family.”

Tax Break The House Ways and Means Committee advanced S.51, which would exempt military pensions from the state’s income tax for those earning under $125,000.

ACC2 and ACT Vermont has adopted California’s Advanced Clean Cars II and Advanced Clean Trucks rules, which require 35% of new vehicles delivered to Vermont to be electric by Model Year 2026, rising to 100% by 2035. The truck rule requires 10% of new battery electric medium and heavy-duty trucks to be electric in 2026. Check out this breakdown of the rules or watch this video for a brief overview. Congress is now weighing in, attempting to revoke California’s waiver that allows it—and states like Vermont—to ban the sale of new gas-powered vehicles. Legal challenges are likely from Attorneys General in California, Vermont, New York, and other states. But some aren’t waiting for the courts to figure it out. Delaware and Maryland have dropped the California EV mandates, and even Massachusetts called for a truce on the “Truck Rule.” In Vermont, there have been several attempts to do the same, but no legislation has made it out of a committee hearing for a vote.

U.S. Sues Us The U.S. Department of Justice has filed a lawsuit against the State of Vermont, seeking to block implementation of the state’s Climate Superfund Act. The 2024 law would impose strict, retroactive liability on major fossil fuel companies for their historic greenhouse gas emissions, requiring them to fund climate adaptation projects in Vermont. In its 28-page complaint, the federal government argues the law is unconstitutional and unlawful on several grounds. The U.S. claims Vermont is attempting to regulate global greenhouse gas emissions—actions that took place largely outside the state and, in many cases, outside the country. The lawsuit asks the courts to declare the law invalid and permanently prevent Vermont officials from enforcing it.

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Meadow Hill helps navigate Vermont’s business, political, and regulatory landscape. We provide management and advocacy assistance to trade associations, focusing on energy, transportation, and economic development. Learn more about us at MeadowHillVT.com

The Update from Montpelier April 27, 2025

Community Housing Infrastructure Program (CHIP) Update

The House Commerce Committee is nearing completion of its work on S.127, which would establish the Community and Housing Infrastructure Program (CHIP). Designed as an infrastructure investment tool—not a traditional housing subsidy—CHIP aims to address Vermont’s urgent need for housing-supportive infrastructure.

Over the past week, lawmakers worked through several key amendments to strengthen the program’s reach and effectiveness. They include:

— Tier 2 Access Lawmakers are considering ways to ensure projects in Tier 2 areas with existing Act 250 permits will be eligible for CHIP funding immediately, rather than waiting for Tier maps to be finalized in 2026.

— Simplified Affordability Requirements Instead of a complex system that requires income verification, the lawmakers are considering one of two affordability tiers that could offer greater flexibility for mixed-use developments.

— Lower Housing Threshold The residential use requirement for mixed-use projects, currently at 60%, may be reduced to 40%, making building redevelopment more viable.

— Increment Management Following VEPC’s recommendation, a 10-year review modeled after the TIF statute could become part of the CHIP process, which would ensure surplus tax revenues are either used appropriately or returned to the Education Fund.

— Local Enforcement Lawmakers may direct that affordability and floor area compliance be primarily overseen by municipalities rather than a “CHIP Board.”

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Education Funding

The Senate Education Committee is considering significant changes to H.454, the House’s education reform bill, to address concerns about local representation during district consolidation. Separately, Governor Scott’s education plan proposes consolidating districts, boosting early childhood education funding, and expanding technical training. The Senate version of H.454 keeps 2026 as the trigger for consolidation planning but replaces the House’s retired-superintendent Redistricting Subcommittee with a legislator-led School District Boundary Task Force. Additionally, new district maps must guarantee access to Career Technical Education. Senate Chair Seth Bongartz introduced a governance reform plan that simplifies administrative structures while preserving most tuitioning and interstate districts. Mandatory class size minimums and penalties for noncompliance with Education Quality Standards were removed. Senate Finance continues discussions on how to equitably structure any supplemental district spending. Coming to a compromise between the House, Senate, and Governor on this key issue is what could push adjournment into June.

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FY 2026 Vermont Budget Overview

The Vermont Legislature is advancing a $9.1 billion state budget for Fiscal Year 2026, representing a 2.4% increase over the previous year. The budget prioritizes major investments in housing, education, healthcare, and economic development, while also planning for potential federal funding cuts.

Housing remains a central focus, with $47.1 million allocated across six programs, including the Vermont Housing Incentive Program (VHIP), the Rental Revolving Loan Fund, and the Middle-Income Homeownership Development Program. While these investments aim to address Vermont’s ongoing housing crisis, much of the funding for VHIP is one-time, raising questions about the program’s long-term stability. The budget also commits $9.1 million to the Vermont Bond Bank Infrastructure Sustainability Fund to support critical community infrastructure projects.

To ease pressure on property taxpayers, $77 million from the General Fund is being directed into the Education Fund, a move expected to lower anticipated property tax increases from around 6% to roughly 1%. Additional education investments include $4 million to advance educational transformation initiatives and a 3% base funding increase for the University of Vermont, Vermont State Colleges, and the Vermont Student Assistance Corporation (VSAC).

Recognizing uncertainty at the federal level, the budget grants the state's Emergency Board access to Vermont’s nearly $100 million "rainy day" fund to guard against potential cuts to federally supported programs, including Medicaid.

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Health Care

The budget provides $4.4 million to enhance rates for certain healthcare providers, aiming to leverage additional federal Medicaid dollars. Vermont’s healthcare crisis took center stage in a recent joint hearing of the House Health Care and Senate Health and Welfare Committees, where lawmakers heard stark warnings from state officials, hospital leaders, and the Green Mountain Care Board. The message was clear: the system is nearing collapse, and businesses may soon face the fallout through skyrocketing insurance costs, reduced access to care, and further strain on the workforce. A Green Mountain Care Board member underscored the urgency, noting that employers and their commercially insured workers can no longer afford to shoulder the financial burden of the system.

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Economic Development

Regional Planning Commissions (RPCs) provided testimony on the impact of federal grant cuts, which threaten key local initiatives in Vermont. Losses include an $875K EPA grant for bike and pedestrian projects, $150K for health equity work, paused energy project funding, and canceled FEMA disaster mitigation grants. Cuts to emergency management grants could further strain rural communities. The Department of Tourism also raised concerns about declining Canadian visitors. In response, the Senate advanced a resolution (S.R. 11) urging Congress to halt new tariffs on Canadian imports and reassert its authority over trade policy.

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Tax Policy

The House Ways & Means Committee reviewed H.483, exempting military retirement pay from state income tax. Vermont’s 3,594 retirees contribute nearly $99M in local spending annually. While the exemption’s $3.9M cost raised concerns, advocates argue the economic benefits outweigh the loss. The Senate heard from former Brigadier General Brian Carpenter, who emphasized that military retirees, with an average age of 47, bring valuable leadership and skills to Vermont’s workforce. While there is bipartisan support for a military pension exemption, it is uncertain whether it will pass this year.

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Energy & Transportation

Congress could vote as early as next week to repeal the Biden administration’s approval of California’s plan to phase out the sale of gasoline-only vehicles by 2035. Eleven other states—including Vermont, Rhode Island, Massachusetts, New York, and New Jersey—have adopted California’s electric vehicle (EV) mandates. Vermont’s rules begin with Model Year 2026, requiring manufacturers to deliver 35% battery electric vehicles (BEVs) for sale. A separate regulation requires that 10% of new medium- and heavy-duty trucks sold and registered in Vermont be battery electric.

The Vermont Vehicle Index shows that just 12% of vehicle sales in 2024 were either BEVs or plug-in hybrid electric vehicles (PHEVs)—well short of the 35% target for 2026. The situation for trucks is even more challenging. Only 32 medium- and heavy-duty vehicles registered in Vermont meet the new truck mandate, representing just 0.16% of those currently on the road. These are the "big trucks" that haul milk, plow snow, and provide critical services across the state.

While Congress is moving quickly, a legal challenge is expected, which could drag the issue through the courts for another 18 months. Vermont, however, has the option to act sooner by delaying implementation, similar to the action Maryland took in April. Although there is a bill in the Vermont Legislature to repeal the regulation, it is unlikely to pass during the final days of the session. Efforts to delay enforcement of the truck rule are gaining momentum in Montpelier, with lawmakers responding to concerns from businesses that most of these electric trucks either do not exist, are prohibitively expensive, or cannot meet operational demands. Even more troubling is that orders for new diesel trucks are already being canceled because of the regulation. A coalition of trade associations representing hundreds of businesses recently submitted a joint letter urging lawmakers to delay implementation.

Meanwhile, the Vermont Climate Council is finalizing its second Vermont Climate Action Plan, scheduled for completion on July 1. The plan continues to rely heavily on electric vehicle mandates as a primary tool to meet Vermont’s legally mandated target of reducing greenhouse gas emissions by 40% below 1990 levels, in accordance with the Vermont Global Warming Solutions Act (GWSA).

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Meadow Hill helps navigate Vermont’s business, political, and regulatory landscape. We provide management and advocacy assistance to trade associations, focusing on energy, transportation, and economic development. Learn more about us at MeadowHillVT.com

Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

Click here to support our team and help sustain our commitment to delivering the comprehensive reporting you rely on.

April 7, 2025

The Update from Montpelier

Lawmakers are facing an increasingly precarious fiscal and policy landscape as mounting uncertainty at the federal level threatens to unravel key assumptions underpinning Vermont’s budget. The state budget relies heavily on federal aid, and hundreds of millions of dollars are now in question. Congress is considering $880 billion in federal budget cuts, raising alarms across state agencies. Already, the U.S. Department of Education has rescinded $17 million in ESSER (pandemic-era) school reimbursement funds previously earmarked for Vermont districts. The Trump administration has also signaled its intent to withhold $42.7 million in support of Vermont’s highest-poverty schools unless districts sign written certifications affirming that they do not engage in diversity, equity, or inclusion (DEI) initiatives.

Meanwhile, recent trade actions taken by President Trump have compounded fiscal pressures. New tariffs—ranging from 10% across-the-board duties to 25% on imported automobiles and components—are expected to cost Vermont an estimated $1 billion, according to Treasurer Mike Pieciak. These tariffs directly endanger the state’s $1.9 billion export economy, threatening manufacturers, auto retailers, and local businesses. While energy imports from Canada remain exempt under the USMCA, we will likely see price increases for consumer goods manufactured outside of the United States in the months ahead.

The Vermont Agency of Transportation (VTrans) has already announced a near 45% cut in annual paving—dropping from 220 miles of roadway to just 125 in the coming fiscal year. While gas tax revenue remains flat, surging labor and materials costs are stretching the state’s paving budget.

Tax policy is also under scrutiny in Montpelier as lawmakers consider revising Vermont’s property tax classification system by breaking non-homestead property into three distinct categories: apartments, residential rentals, and nonresidential.

Further complicating the legislative landscape, the much-anticipated vote in the state Senate to repeal the Clean Heat Standard (CHS) was postponed indefinitely last week when it became clear the measure lacked sufficient support. The CHS, originally passed in 2023 but not yet fully implemented, would establish a clean heat credit trading system, obligating fuel dealers to meet greenhouse gas reduction targets. Despite widespread opposition, the updated draft of the Vermont Climate Action Plan continues to list CHS as a key policy to meet the state’s legally binding carbon reduction mandates.

On the federal level, new efforts are underway in Congress to revoke California’s vehicle emissions regulations under the Congressional Review Act. If passed, these resolutions would invalidate California’s Advanced Clean Trucks and Clean Cars II rules—regulations Vermont has adopted in tandem with several other states. Vermont auto dealers testified in Montpelier last week urging a rollback of these mandates, which would restrict the sale of internal combustion vehicles. Legislation to rescind Vermont’s adoption of the California rules (H.65 and S.101), has been introduced, but no legislative action has been taken.

Check out everything our legislative team is tracking at MeadowHillMedia.com/watch.

Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

Click here to support our team and help sustain our commitment to delivering the comprehensive reporting you rely on.

March 31, 2025

Money Matters in Montpelier

The Vermont House advanced its 2026 state budget (H.493), which includes a provision allowing top lawmakers to tap the state’s "rainy day" fund if Congress imposes significant funding cuts. The bill now moves to the Senate. The measure authorizes the Emergency Board—composed of the governor and legislative budget leaders—to access the fund during the legislative off-season. With about one-third of Vermont’s budget reliant on federal dollars, lawmakers are preparing for possible reductions under the Trump administration. Democratic leaders acknowledged the state’s affordability crisis. Still, they warned that if federal support is cut, a temporary income tax surcharge may be needed to preserve essential services. Some also advocated for a more progressive income tax structure to sustain key programs. Governor Phil Scott opposes new taxes, arguing that recent increases have limited the state’s ability to absorb future fiscal shocks.

Education Funding and Property Taxes

The House passed this year’s yield bill (H.491), which sets statewide property tax rates. Lawmakers adopted Governor Scott’s proposal to allocate $77 million in one-time General Fund money to reduce the anticipated property tax hike. The average increase is now projected to fall from 6% to about 1%, though rates will still vary by district and depend on remaining school budget votes. The House Ways and Means Committee is considering a proposal to create new tax classifications for non-homestead properties as part of broader education funding reform. The plan could complicate the tax system and raise costs for Vermont employers, potentially harming the state’s economy.

Housing Help

Vermont municipalities face a $240 million funding gap for planned water and sewer expansions, critical to supporting new housing development. The state Senate has passed legislation (S.127) with a financing mechanism to address this challenge. The Community Housing Infrastructure Program (CHIP) would allow municipalities to self-fund infrastructure investments using projected property tax revenues, reducing reliance on new state or local appropriations. These financing tools could provide municipalities with greater flexibility to invest in infrastructure, expand infrastructure capacity, and support housing development. More information here.

Senate Advances Data Privacy Bill

The state Senate unanimously approved legislation (S.71) that sets new privacy protections for Vermonters and restricts how tech companies collect and sell user data. The bill includes provisions allowing users to opt out of targeted advertising and limits on data collection. It also removes the controversial “private right of action” that helped derail a similar bill last year. The revised approach gained bipartisan support and now awaits action in the House.

EV Mandates Face Growing Pushback

Opposition is mounting to Vermont’s adoption of California’s EV mandates. Local auto dealers testified before the House Transportation Committee, urging lawmakers to consider pausing or repealing the rule. Click here to watch the testimony. Vermont and nearly a dozen other states followed California’s lead back in 2022 and adopted a Zero Emission Vehicle (ZEV) mandate, which requires 35% of new vehicle sales in 2026 to be EVs. This increases to 100% by 2035. According to the Vermont Vehicle Index, only 12% of new vehicles sold in the Green Mountain State can plug in. Implementing the regulation could lead to inventory disruptions, higher costs, and diminished consumer choice. At the federal level, legislation has been introduced in Congress to revoke the EPA’s authority to grant emissions waivers—potentially blocking states like Vermont from enforcing more stringent rules than federal law allows. Find out why Vermont’s car dealers are caught between a rock and a hard place.

Tariff Watch

President Trump has announced a sweeping new round of 25% tariffs set to take effect next week on imported vehicles and auto components. The move—intended to boost domestic production—could significantly impact global supply chains already strained by previous levies and logistical delays. Tariffs on critical parts, including engines and transmissions, will kick in no later than May 3.

Clean Heat Standard Repeal Vote

The Senate will soon vote on legislation (S.65) to repeal the Clean Heat Standard. Passed in 2023, the Clean Heat Standard is viewed by most lawmakers and their constituents as a failed energy policy. The repeal provision is part of a broader energy bill that allows Efficiency Vermont to spend more on electricity-consuming products, such as heat pumps. Efficiency Vermont supports the bill; electric utilities oppose it.

Check out everything our legislative team is tracking at MeadowHillMedia.com/watch.

Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

Click here to support our team and help sustain our commitment to delivering the comprehensive reporting you rely on.

March 21, 2025

Housing Help

The Senate Finance Committee approved a Housing Bill (S127) with amendments on Friday afternoon by a 6-1 vote. The amendments revise the bill to shift its focus from "affordable housing" to "middle-income housing.” The amendments also clarify that the goal of the program is to support and stimulate middle-income housing development specifically. Reporting requirements were also expanded to include the number of middle-income units created to ensure outcomes align with the bill’s intent. Vermont municipalities face a $240 million funding gap for planned water and sewer expansions, which are critical to supporting new housing development. To address this challenge, lawmakers have advanced a new financing mechanism: the Community Housing Infrastructure Program (CHIP). This program would allow municipalities to self-fund infrastructure investments using projected property tax revenues, reducing reliance on new state or local appropriations. These financing tools could provide municipalities with greater flexibility to invest in infrastructure, expand infrastructure capacity, and support housing development.

Building a Workforce: CTE Reforms Moving Slowly

The House Commerce Committee continues to look at ways to reform Career Technical Education (CTE) in Vermont. A draft bill proposes the creation of a single, statewide career and technical education school district in Vermont, replacing the current regional governance system. It repeals existing statutes and establishes a new governance structure to oversee all CTE programs, manage facilities, hire staff, develop budgets, and ensure consistent quality and access across the state. The district would assume responsibility for the assets and liabilities of existing regional centers and unify operations. The bill also ensures that credits earned at CTE centers are honored statewide and encourages integration with high school graduation requirements. It imposes a moratorium on the creation of new CTE centers from 2025 to 2033 and directs the Secretary of Education to provide professional development for CTE staff. The act will only take effect in 2028 if the General Assembly does not enact broader school district consolidation legislation by then. CTE superintendents have emphasized that CTE governance reforms should follow broader public education changes. Key concerns include proposed consolidations, funding disparities that disincentivize enrollment, and space limitations within shared facilities. Lawmakers will hear more testimony next week.

T-Fund Trouble

The state invests about $100 million a year in highway paving, according to the Vermont Agency of Transportation. But Vermont’s transportation budget faces a shortfall next year of over $30 million. If current funding trends continue, the percentage of state roads in poor or very poor condition could rise dramatically—from 26% in 2025 to 60% by 2029. Major transportation projects may also lose federal funding due to the Trump administration’s reassessment of grants linked to diversity, climate change, and bicycle infrastructure. There are 15 municipal projects under review, including a new pedestrian bridge over I-89 in South Burlington. While core highway and bridge funds remain intact, the National Electric Vehicle Infrastructure (NEVI) program, which was funding EV chargers statewide, has been halted entirely. Vermont had completed only one station in Bradford before the cuts.

MBUF Moving

Vermont’s House Committee on Transportation is proceeding with legislation to establish a mileage-based user fee (MBUF) on all-electric vehicles registered in the state. Beginning in 2026, the fee is projected to generate approximately $5 million annually. The Agency of Transportation will be required to develop a framework for the fee by July 2026.

Purchase and Use Break

Lawmakers have given preliminary approval to a plan that reduces the purchase and use tax exemption for vehicles and equipment used in forestry operations in Vermont. The legislation (S.46) modifies existing tax exemptions to ensure that vehicles used in timber cutting, removal, processing, and transportation of forest products qualify for tax relief. This includes skidders, feller bunchers, as well as heavy-duty trucks, and trailers (with a gross vehicle weight of 10,000 pounds or more). The relief is a 50% break on Vermont’s 6% purchase and use tax. The amendment keeps the tax exemptions for motor vehicles and equipment used in forestry operations in place but adds repair parts to the exemption list. A floor amendment is expected that would add a three-year sunset to the tax exemptions.

Ready to Repeal

Less than two years after becoming law, a proposal to repeal Act 18 is gaining momentum in the Statehouse. Commonly referred to as the Clean Heat Standard (CHS), it would establish an exchange in which clean heat credits are bought and sold. While the repeal is real, the Clean Heat Standard was never enacted. The only part of the law in place is a “Fuel Dealer Registry,” which is used to track sales and establish fuel dealer “obligations.” An amended registry would continue under the legislation (S.65). The repeal was tacked onto a larger piece of legislation that allows Efficiency Vermont to spend more money on things that increase electricity consumption, such as electric heat pumps. This was supported by Efficiency Vermont and opposed by the electric utilities.

Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

Click here to support our team and help sustain our commitment to delivering the comprehensive reporting you rely on.

March 17, 2025

The Meadow Hill View from Montpelier

As Vermont’s Legislature tackles pressing fiscal and policy challenges, key legislative efforts are gaining momentum. Lawmakers are actively debating the Property Tax Yield Bill, which determines statewide property tax rates. The Senate Institutions Committee advanced a data privacy bill addressing concerns that led to last year’s gubernatorial veto, while multiple bills in both chambers seek to expand affordable housing access and infrastructure investment. Economic development initiatives progressed with VEDA-backed workforce housing financing and the expansion of downtown tax credits. Public safety and education reform remain focal points, with juvenile justice changes and Career and Technical Education restructuring under review. Environmental and climate policies saw mixed developments, including stormwater management reforms, and a proposed partial repeal of the Clean Heat Standard. Meanwhile, labor rights, collective bargaining, and healthcare system overhauls continue to evolve through committee actions.

Dig deeper on these key issues that we are tracking….

Housing Help The Vermont Senate and House have advanced housing bills to address affordability, supply, and infrastructure needs. The Senate’s $45.6 million bill funds rental housing improvements, manufactured home repairs, municipal infrastructure, homebuyer tax credits, brownfield redevelopment, and tax increment financing for housing-related projects. It also seeks to streamline Act 250 appeals for housing developments. The House bill, allocating over $70 million, includes similar funding but also proposes a land bank feasibility study, zoning reforms, brownfield cleanups, and a municipal short-term rental tax option. Both bills reflect a broad approach to improving Vermont’s housing crisis through funding, regulatory changes, and incentives. More about the legislation here.

First Veto Gov. Phil Scott issued his first veto of the 2025 session, rejecting a mid-year spending plan. He opposes increasing state spending amid expected federal funding cuts and also disagrees with lawmakers’ decision to extend the hotel program for unhoused Vermonters.

Car Trouble While bills in Montpelier seek to repeal the regulation, Congress is also reviewing whether or not California’s Advanced Clean Cars II and Advanced Clean Truck rule should stand. If California’s regulations are overturned, Vermont cannot enforce similar EV mandates. More about the mandates here. Critics argue that current EV policies do not align with market realities, citing high costs, limited charging infrastructure, and product availability challenges.

Transportation Changes The Senate Transportation Committee has passed legislation modifying vehicle registration, taxation, and safety regulations. Key changes include classifying Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) as “pleasure cars” for registration, exempting veterans and emergency vehicles from the EV Infrastructure fee, and replacing “NADA” with “J.D. Power Values” to determine vehicle value. The bill also strengthens prohibitions on odometer tampering, modifies tax assessment appeals, and establishes a study committee on vehicle tax and inspection standards. Other provisions include setting a maximum window tint limit, revising ATV width limits, adjusting truck weight categories for fee calculations, and imposing stricter penalties for excessive speeding. Learn more here.

Vehicle Noise Lawmakers have significantly reduced the scope of legislation targeting vehicle noise and the use of engine compression brakes (Jake brakes). Limits on Jake brakes have been removed, along with a controversial provision preventing certified technicians from inspecting their own vehicles. A proposed citizen reporting system for noise complaints was also scrapped. However, the bill now prohibits vehicles with modified or non-compliant mufflers, including gutted mufflers, straight pipes, and motorcycles without federally compliant exhaust systems. Vehicles violating these requirements will not pass inspection.

Forestry Tax Relief Legislation has received preliminary approval to adjust tax exemptions for forestry-related vehicles and equipment. Qualifying equipment includes skidders, processors, chippers, and heavy-duty trucks with a gross vehicle weight of 10,000 pounds or more. The proposal provides a 50% break on Vermont’s 6% purchase and use tax.

Price Watch Legislation is being considered to ban electronic shelf labels (ESLs) and AI-driven dynamic pricing in Vermont. ESLs are wireless digital displays used by retailers, while dynamic pricing adjusts costs in real-time. The legislation intends to regulate these practices inside stores, though no exemptions currently exist for businesses displaying fuel prices on exterior signs.

Act 18 Repeal Momentum is growing to repeal Act 18, the so-called Affordable Heat Act. Over 5,000 Vermonters have signed a petition opposing the measure, and hundreds attended a recent rally in Montpelier. While the House has not acted yet, the Senate Natural Resources Committee has attached the repeal measure to a bill (S.65) that expands Efficiency Vermont’s ability to use electric ratepayer money on efforts to reduce greenhouse emissions. The only remaining portion of Act 18 is the fuel dealer registry, which would be put on hold for two years if the bill becomes law. Much of the data is already publicly available, thanks to the Vermont Fuel Index. Small amounts of propane and kerosene sold at retail locations would also be exempt from the fuel dealer registry, which could prevent these fuels from falling under a future Clean Heat Standard.

What’s Next? Cap-and-Invest The Vermont Climate Council may add a “Cap-and-Invest” program to the state’s revised Climate Action Plan. This policy would require fuel distributors to purchase allowances to sell fuel beyond a state-imposed cap, with higher fuel costs funding programs to reduce fossil fuel usage. According to a state Treasurer’s report, the plan would increase fuel prices by 30 cents per gallon in the first year, rising to 80 cents over a decade. Similar to the Clean Heat Standard, the proposal is complex and raises concerns about Vermont implementing such a policy independently.

Economic Trends The Vermont Department of Labor reports that the seasonally adjusted statewide unemployment rate for January was 2.6%. The average duration of unemployment remains near historic lows. Gasoline sales in Vermont increased in January, while vehicle sales declined. Heating fuel consumption also rose, with Vermonters purchasing 23% more propane and 15% more fuel oil in January 2025 compared to the previous year. Check out this and other information at MeadowHillMedia.com.

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Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

Click here to support our team and help sustain our commitment to delivering the comprehensive reporting you rely on.

February 24, 2025

Vermont’s EV Mandates: Where Are We Now?

Vermont’s Advanced Clean Car and Clean Truck Regulations, which align with California’s emissions standards, face more uncertainty. The Trump administration's Environmental Protection Agency (EPA) has asked Congress to review the Clean Air Act waiver that grants California the authority to enforce its Advanced Clean Cars (ACC II) rule, along with federal waivers approving the state’s clean truck and heavy-duty NOx emissions standards. This move effectively allows Congress to scrutinize these rules before they take effect. At the core of California’s ACC II rule is a requirement for automakers to sell an increasing percentage of zero-emission vehicles, beginning with model year 2026 and leading up to a complete ban on new internal combustion engine vehicles by 2035. Currently, 17 states, including Vermont, have adopted all or part of California’s light- and heavy-duty vehicle regulations. Since Vermont’s EV mandate is directly tied to the California waiver, this could signal the beginning of the end. However, the legal and regulatory battle over these rules could take months, if not years, to resolve, with the potential for the issue to be decided in federal court. In the meantime, model year 2026 vehicles—the first impacted by these regulations—will begin arriving at dealerships this summer, adding further complexity to buying and selling cars and trucks in Vermont. Check out the latest update on the EV mandate on WVMT’s Morning Drive here.

Common Question: Do PHEVs count toward the EV Mandate?

Technically yes. But Plug-In Hybrid Electric Vehicles (PHEVs) get 1/5 of the credit of a Battery Electric Vehicle (BEV) under the Advanced Clean Car II mandate. This incentivizes manufacturers to build more BEVs than PHEVs. Adding to the challenge, PHEVs must get at least 50 mpg in order to count.

More from Montpelier

With less than 10 working days before the deadline to finalize bill drafts, legislative activity is intensifying. Below is a snapshot of some key proposals.

S.75 imposes fees of up to $750 on less fuel-efficient vehicles, using the revenue to fund electric vehicle (EV) incentives, eBikes, and public transit. The bill also introduces a retail delivery fee of 30 cents.

H.277 increases fuel taxes on heating oil, propane, kerosene, and dyed diesel to expand home weatherization programs. The tax would double from 2 cents per gallon to 4 cents in 2026, then double again to 8 cents by 2028.

H.289 shifts Vermont’s climate strategy by converting the state’s greenhouse gas (GHG) reduction mandates into non-binding goals. The bill replaces the Renewable Energy Standard with a Clean Energy Standard (CES) and repositions the Climate Council as an advisory body without regulatory authority.

H.62 repeals the legally binding mandates in Vermont’s Global Warming Solutions Act and dissolves the Vermont Climate Council. Instead, it promotes a market-driven, voluntary approach to emissions reductions. Additionally, it would repeal Vermont’s Zero Emission Vehicle (ZEV) mandates, removing state-imposed EV adoption requirements. If passed, the act would take effect on July 1, 2025.

H.261 reduces the standard full-time workweek from 40 to 32 hours, requiring employers to pay overtime for any work beyond 32 hours per week. If enacted, this could significantly increase labor costs, leading businesses to adjust hours, restructure jobs, or raise prices.

H.263 grants employees the right to ignore employer communications outside of working hours.

S.66 seeks to limit motor vehicle noise and the use of engine compression brakes, also known as “Jake brakes.” The bill includes penalties for violations, with fines increasing for repeated offenses, and mandates that non-compliant vehicles fail state inspections. It also directs the Agency of Transportation to establish a citizen reporting system for subjective noise complaints rather than objective safety concerns, allowing individuals to report potentially non-compliant vehicles to law enforcement for investigation.

Both the House and Senate are considering legislation (H.188 & S.47) that could eventually allow Vermonters who buy a motor vehicle the opportunity to “cancel or return vehicle purchases.” The measure creates a "study committee” to determine whether consumers should have the legal right to return a purchased vehicle after taking possession.

Check out everything your legislative team is tracking at MeadowHillMedia.com/watch.

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Now What? With Vermont’s Clean Heat Standard on standby and electric vehicle regulations on the rocks, what comes next? Cap and Invest. The Vermont Climate Council is likely to include the policy in its forthcoming Climate Action Plan. The policy sets a cap on how much fossil fuel can be sold in the state for both heating and transportation. Anything over the cap pays a fee that will be spent to encourage Vermonters to use less. But the Senate and House Transportation Committees got the bad news yesterday from the state Treasurer when it was revealed that the program will cost Vermonters an extra 30 cents per gallon in year one and increase to 80 cents over the next decade. Similar to the Clean Heat Standard, the policy is incredibly complex and not well-suited for Vermont to ‘go it alone.'

News of Note

Protests continue outside South Burlington's Tesla dealership.

What are Vermonter’s driving? Check out the Vehicle Index.

As Vermont lawmakers tackle the state’s housing and infrastructure challenges, several financing tools are under discussion.

March bond requests are up fourfold in Vermont’s biggest cities and towns.

California's surge in EV sales has stalled — so what happens to its landmark mandate?

Lawmakers are considering various updates and modifications to Vermont’s motor vehicle laws.

Governor Phil Scott signed H.35 into law, permanently separating Vermont’s small group and individual health insurance markets in Vermont Health Connect. The separation, initially temporary since 2021, allowed Vermonters to access expanded federal subsidies under the American Rescue Plan Act. However, without further federal action, these subsidies will expire at the end of this year.

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February 17, 2025

Housing Help As part of the Governor’s PATH Plan to expand Vermont’s housing stock, the Strategic Projects for Advancing Rural Communities (SPARC) framework is being considered as a more accessible alternative to Tax Increment Financing (TIF). While TIF has been an effective tool for financing public infrastructure by leveraging future tax revenue increases, its complexity and competitive nature have made it more suitable for larger municipalities. SPARC, in contrast, is designed specifically for Vermont’s smaller, rural communities by simplifying administration and broadening access to growth tools. A key distinction is that SPARC would enable tax increment revenue to be allocated directly to private developers through Community Agreements (CAs), offering an alternative means of financing housing projects. Legislators are currently assessing how SPARC could integrate into the state’s broader housing strategy.

Keeping it Local Vermont’s 34 municipalities with local option taxes (LOTs) are advocating to retain a larger share of the revenue to alleviate property tax burdens. Currently, the state withholds 30% of LOT revenue plus a fee, generating a $10 million surplus, which is expected to grow due to a recent law allowing municipalities to adopt new LOTs without a charter change. The state uses its share to fund the Payment in Lieu of Taxes (PILOT) program, which compensates towns for tax-exempt state-owned buildings. H.164, supported by 56 cosponsors, proposes reducing the state’s share to 20%, returning more revenue to municipalities. This shift could reduce property tax reliance and provide financial relief to local budgets. Meanwhile, the Scott Administration is considering using part of the surplus to assist communities affected by recurrent flooding and property buyouts.

Reading the Rules Vermont’s Advanced Clean Car II (ACC2) rule requires 35% of the new cars delivered to Vermont to be battery electric or plug-in electric hybrids in Model Year 2026. This ramps up to 100% of new cars in 2035. Trucks are on a similar trajectory. Vermont’s Advanced Clean Trucks (ACT) Regulation requires manufacturers to sell an increasing percentage of zero-emission medium- and heavy-duty trucks, with a goal of 100% zero-emission sales by 2045. The Vermont regulation requires 10% of heavy-duty vehicles to have zero emissions by 2026 and half of all new Class 4-8 trucks sold to have zero emissions by the end of the decade. This is impossible. It will "take a miracle," according to the auto manufacturers. Only 12% of new vehicles registered in Vermont in 2024 were plug-ins. Find out what happens next.

Efficiency Spending The efficiency utilities that were created decades ago to decrease electricity use could soon be given the green light to go the other way. S.65 expands the authority of Efficiency Vermont by directing the non-profit organization to increase electricity consumption by prioritizing greenhouse gas reductions over traditional cost-effective energy savings. The bill directs spending on electric heating and transportation initiatives, as well as efficiency upgrades. Large energy consumers can self-administer these funds, but strict restrictions prevent investments in fossil fuel-based solutions, regardless of cost-effectiveness. Click here to download a detailed analysis of the effort to electrify the heating and transportation sectors in Vermont.

Fixing the Fund The Joint Fiscal Office has outlined potential transportation revenue options for Vermont, including the gas tax, mileage-based user fees (MBUF), and a retail delivery fee. The gas tax, currently around $0.50–$0.51 per gallon, faces declining revenue due to fuel efficiency improvements and EV adoption. Increasing it could involve adjustments to fixed rates or assessment percentages. The MBUF would charge vehicles per mile driven, with initial implementation focusing on EVs. Though four states have adopted similar systems, Vermont has yet to act, citing high startup costs, privacy concerns, and administrative challenges. The retail delivery fee, modeled after policies in Colorado ($0.29) and Minnesota ($0.50), could generate an estimated $10 million annually.

Capping The Vermont Climate Council is considering adding a “Cap and Invest program” to the revised Action Plan. This would require fuel distributors to purchase allowances if they want to sell “above the cap.” The higher fuel costs would pay for programs to encourage Vermonters to use less fossil fuels to heat their home or power their vehicles. According to a report from earlier this week, fuel prices could rise by $0.10–$0.30 per gallon under the program.

Tough Brake Legislation (S.66) has been proposed to limit motor vehicle noise and the use of engine compression brakes, also known as “Jake brakes.” Compression brakes are used on steep descents to prevent failure. This critical safety tool would be limited under the law unless a muffler is installed. The bill includes penalties for violations, with fines increasing for repeated offenses, and mandates that non-compliant vehicles fail state inspections. It also directs the Agency of Transportation to establish a citizen reporting system for subjective noise complaints rather than objective safety concerns.

By The Numbers

— What are Vermonter’s driving? Check out the Vehicle Index.

— The average price of heating oil was down 3% compared to January of last year. Propane was up 4%. Diesel, gasoline, and kerosene were all down 8% over the same time period last year. Download the data on the Vermont Fuel Price Report.

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February 10, 2025

No Fix in Fix-It Bill

Legislation (H.161) would force manufacturers to provide independent repair providers and equipment owners with the same parts, tools, and documentation as authorized repair providers, including access to security-related functions. While it claims to promote fairness in equipment repair, this mandate could undermine manufacturers' ability to protect proprietary technology and ensure repairs are conducted safely and correctly. By restricting manufacturers from setting reasonable conditions, such as requiring repair providers to be authorized or registering parts and tools, the bill opens the door to substandard repairs that could compromise safety, reliability, and even emissions compliance. Although it excludes motor vehicles, medical devices, and federally preempted areas, it still imposes unnecessary regulatory burdens on equipment manufacturers while shielding them from liability for negligent repairs—unless the manufacturer supplied faulty parts or tools. Additionally, it hands broad enforcement power to the Attorney General, treating violations as unfair and deceptive trade practices, which could lead to excessive litigation and compliance costs. If enacted, this legislation, set to take effect on January 1, 2026, would create more harm than good by eroding quality control, increasing risks for consumers, and discouraging innovation in the equipment industry.

No Take Backs? A Senate bill (S.47) sets in motion a proposal to allow Vermonters who buy a motor vehicle the opportunity to “cancel or return vehicle purchases.” The measure creates a "study committee” to examine the feasibility. The committee will examine whether consumers should have the legal right to return a purchased vehicle after taking possession. The study will also examine whether consumers should have the right to cancel a purchase contract before vehicle delivery. If enacted, this bill could lead to future legislation providing consumers with limited rights to cancel or return vehicle purchases, potentially affecting dealership policies and consumer protection laws in Vermont. No hearings have been scheduled as of yet.

Course Correction Rep. Jim Harrison and Rep. Mark Higley introduced a series of bills that would change the Global Warming Solutions Act, revise the Renewable Energy Standard, repeal the Clean Heat Standard, void the EV car and truck mandates, and remove the ability for anyone to sue the state for failing to reduce emissions. Watch here. While the bills have support amongst most Republicans, they are unlikely to pass without the help of moderate Democrats.

What We Are Watching Click here for an overview of legislation your team is tracking in the Statehouse.

By The Numbers

The average price of heating oil was down 3% compared to January of last year. Propane was up 4%. Diesel, gasoline, and kerosene were all down 8% over the same time period last year. Download the data on the Vermont Fuel Price Report.

Check out the Vermont Fuel Index to see many gallons of heating oil, propane, gasoline, and diesel that were sold in Vermont in 2024.

Who got pulled over? Check out the Vermont Commerical Vehicle Enforcement Report here.

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News of Note

President Trump announced a 30-day pause on tariffs for Canadian and Mexican imports. The move would have put a 25% tax on imported goods and a 10% tax on energy, including heating oil, natural gas, kerosene, propane, gasoline, and diesel fuel.

As of January 1, battery electric vehicle owners in Vermont must pay an extra $89 annually, and plug-in hybrids get charged an additional $44.50. The fees are expected to raise $1.3 million this year and $2 million next year. Lawmakers are considering spending the money on Level 1 and Level 2 EV charging ports at workplaces, multiunit dwellings, or both.

The Vermont Diesel Emissions Reduction Financial Assistance Program is back. Funds are for those who want to replace an old diesel-powered heavy-duty vehicle with a newer diesel truck. As of February 4, 2025, $322,000 is available. Learn more and link to the application form here. The deadline to apply is Wednesday, March 5, 2025.

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February 3, 2025

Building the Budget and Setting the Agenda

Governor Phil Scott has laid out his budget address with a focus on housing, affordability, education, and climate change.

The Administration proposed a $9 billion budget, marking a 5% increase over last year. As expected, his proposal emphasized affordability, demographic challenges, and education reform while firmly opposing tax increases. To address affordability concerns, Scott allocated $77 million to offset a projected 5.9% property tax increase. He also suggested ending universal school meals to fully fund this tax relief, though this proposal faces opposition. His budget included a $13.5 million tax reduction package aimed at expanding credits for Social Security recipients, low-income workers, and families with children under six. Additionally, he reiterated his long-standing push to eliminate the state income tax on military pensions and proposed revisiting the costs associated with the Global Warming Solutions Act.

Public safety was another focal point of Scott’s budget. He advocated for repealing the state’s “raise the age” laws, which currently allow 18- and 19-year-olds to be treated as juveniles in the justice system, instead seeking to keep them in adult courts. He also proposed tougher laws on repeat offenders but did not include funding for additional judges or prosecutors. Throughout his address, Scott underscored what he called a pattern of “funding without fixing,” highlighting his desire to address underlying issues rather than simply allocating money. He specifically referenced the $30 million in his budget for the motel room program for individuals experiencing homelessness as an example of this approach.

On housing, Scott proposed $6 million to improve vacant rental units and mobile homes, along with $9 million for municipal infrastructure projects. Vermont is building only 25% of the housing required annually. To meet demand and alleviate the crisis, the state needs over 41,000 new homes by 2030 and 172,000 by 2050. The Administration’s omnibus housing proposal aims to tackle Vermont’s ongoing housing crisis through infrastructure funding, investment in housing development programs, reforms to housing appeals, and updates to Act 250. Lawmakers emphasized the need for input from mapping agencies and the new Land Use Development Board to refine provisions ensuring development incentives, environmental protections, and community participation. Vermont’s workforce and demographic challenges are closely tied to housing availability, which is why the Scott Administration is pushing for a coordinated legislative approach this year. This involves expanding Act 250 exemptions to encourage housing development.

A major overhaul of Vermont’s education funding formula is also under consideration. The Governor claims his plan would create a more equitable and sustainable system while reducing overall spending by $183.6 million. The proposal would establish a foundation formula that provides a baseline funding amount of $13,200 per student. The potential impacts on local education funding and property taxes are still unclear. More on the budget here.

Reasons to Repeal: Energy Legislation Proposed in Montpelier

The Vermont Global Warming Solutions Act (GWSA), enacted in 2020, mandates a 26% reduction in greenhouse gas emissions by 2025 (compared to 2005 levels), a 40% reduction by 2030 (compared to 1990), and an 80% reduction by 2050. Vermont already faces a lawsuit for failing to make the mark. If a state superior court judge rules against Vermont, the Agency of Natural Resources could be legally compelled to implement the Vermont Climate Action Plan (CAP), which is a 265-page document outlining 26 pathways, 64 strategies, and 234 specific actions, many of which require substantial funding from the legislature. Bills H.52 and H.62 seek to repeal these binding mandates, allowing the Vermont Climate Office and the Public Service Department to focus on practical emissions reductions rather than responding to litigation driven by special interests.

The Clean Heat Standard (CHS), developed under Act 18, is the most complex and costly regulation ever proposed for Vermont’s heating sector. The Public Utility Commission’s (PUC) second Checkback Report warns that CHS is expensive and challenging to implement, recommending that the Legislature find a more practical, cost-effective alternative. The CHS is projected to cost nearly $1 billion over the next decade. Heating fuel prices could rise by 58 cents per gallon. None of these estimates include the “participant costs” paid by Vermonters when installing a “clean heat” measure. The Equity Advisory Group (EAG) found that low and moderate-income households, renters, and mobile home residents will struggle to afford clean heat measures while bearing a disproportionate share of the costs. Even those receiving fuel assistance could see their benefits reduced. The regulation also requires a trading platform, credit verification, administration, and enforcement. These costs remain undetermined. A repeal is essential because the Clean Heat Standard (CHS) remains embedded in the Vermont Climate Action Plan. Without legislative action, a court ruling could impose this costly regulation on Vermonters. H.16 repeals the CHS, eliminating related regulations and state agency positions.

Back in 2022, Vermont adopted California-style vehicle mandates requiring 35% of new cars delivered to Vermont in 2026 be electric, increasing to 100% by 2035. These targets are unrealistic. Automakers admit it would "take a miracle" to meet them. In 2024, only 12% of new vehicles sold in Vermont were electric, and nearly all of them light-duty vehicles. If manufacturers fail to meet quotas, they must buy credits—mostly from Tesla—and pay up to $26,000 per gas-powered vehicle exceeding the cap. This could result in fewer cars shipped to Vermont, reducing consumer choice, harming local dealerships, and reducing tax revenue to the state. The truck mandate is worse. According to the rule, 50% of all new Class 2b-8 trucks sold in Vermont must be zero-emission by 2030. Less than 1% of trucks are electric. They cost 2–3 times more than diesel, offer shorter range, and carry 8,000 pounds less payload, requiring more trips, more drivers, and more road wear. No commercial charging infrastructure exists, making widespread adoption infeasible. H.65 revokes Vermont’s adoption of California’s vehicle emission mandates, preventing state regulators from enforcing stricter-than-federal standards.

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News of Note

The Federal Motor Carrier Safety Administration (FMCSA) extended the Regional Declaration of Emergency. The waiver now applies through February 15, 2025, allowing those transporting heating oil, propane, gasoline, and diesel to spend more time on the road. Access the new waiver here and keep it in your truck.

The unemployment rate in Vermont was just 2.4% in December, which is significantly lower than the national rate of 4.1%. Barriers to employment, such as available housing, have slowed the growth of Vermont’s labor force. Experts say Vermont needs 7,000 new housing units every year. Due to the lack of supply, the median home price has increased by 43% in just four years, and a quarter of renters spend half their income on housing.

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January 27, 2025

Evolving Economy

Vermont’s economy remains strong but faces “evolving” challenges, according to the latest forecast delivered in Montpelier. State revenues surpassed projections by nearly 4%, with the General Fund achieving a 6% surplus due to robust income and corporate tax collections. In contrast, the Education Fund experienced a 2.1% shortfall, reflecting weaker sales, meals, and lottery revenues. The Transportation Fund exceeded estimates by 2.7%, bolstered by strong vehicle purchases.

Vermont boasts a 2.4% unemployment rate—the second-lowest in the nation—and payroll job growth has outpaced the U.S. average in seven of the past eight months. That also highlights face demographic challenges. Over the past ten years, Vermont has experienced more deaths than births each year. In order for Vermont to sustain prosperity, policies must foster population growth, bolster the workforce, and adapt to aging demographics. Without these measures, economic stagnation could threaten long-term stability.

The big fear for much of Vermont’s economy is a disruption of trade with Quebec. President Trump has delayed implementing a 25% tariff on goods from Canada and Mexico, which he had previously proposed. The administration is now considering the tariffs as part of a broader strategy to strengthen U.S. border security and address trade imbalances. Both Canada and Mexico have indicated retaliation, potentially triggering a trade war. The majority of energy products consumed in Vermont come from Canada.

A Second Look Vermont lawmakers are considering changes to the Global Warming Solutions Act (GWSA) as they consider pivoting to more realistic greenhouse gas reduction goals rather than punitive mandates that allow anyone to sue the state for non-compliance. Three bills have been introduced to roll back climate laws and regulations that passed in Vermont over the past five years. H.62 repeals the Global Warming Solutions Act and shifts Vermont’s legally binding greenhouse gas (GHG) reduction requirements back to goals. The legislation also eliminates the Vermont Climate Council and its Climate Action Plan, established under the Global Warming Solutions Act. Another bill, H.16, repeals the Affordable Heat Act and its related regulations, while H.65 effectively repeals Vermont's electric car and truck mandate.

Common Question: Hasn’t President Trump already repealed the EV mandate? The President overturned the national mandate but did not revoke the right of California to impose its own mandate on vehicle manufacturers. And he did not stop other states — like Vermont — from following California’s lead. Listen to Matt Cota's explanation here on WVMT. This regulation requires 35% of the new cars delivered to Vermont to be battery-electric or plug-in electric hybrids. This ramps up to 100% of new cars in 2035. The National Auto Dealers Association (NADA) says the ban will “greatly restrict consumer choice.” Auto manufacturers say it will “take a miracle” to meet Vermont’s mandates.

The Check List

— The results are in. Check out the Vermont Vehicle Index from Meadow Hill Media and see what vehicles Vermonters were buying in 2024. Click here to watch Matt Cota testify about the index before the House Transportation Committee.

— Businesses are required to report to the IRS by January 31 using Form 8300 when they receive over $10,000 in cash from a consumer. More information here.

— The OSHA form for recording work-related injuries and illnesses is due soon. For the 2024 summary, this means posting the form from February 1, 2025, through April 30, 2025, and submitting the data electronically by March 2, 2025. Details here.

What We Are Watching

Click here for an overview of legislation your team is tracking in the Statehouse. Below are a few more issues that we are monitoring.

— Legislation proposed by the DMV would change the "taxable cost" of vehicles to JD Power values. Additionally, the time frame for applying for diesel tax refunds will be reduced from 33 months to one year. The bill also clarifies that state, municipal, and volunteer fire and rescue vehicles are exempt from the EV Infrastructure fees.

— Vermont’s transportation funding relies on multiple revenue streams, including fuel taxes, a 6% vehicle purchase and use tax, DMV fees, and federal funding, which contributes 54% of the state’s annual transportation budget. However, rising construction costs are straining the transportation fund. A new report suggests new ways to bridge the funding gap. This includes a host of new fees and fuel taxes.

— While the Clean Heat Standard is one of the reasons why Democrats lost the Super Majority in Montpelier, education funding and rising property taxes were also at the top of voters' minds. The Scott Administration introduced a "bold new plan" to consolidate more than 100 school districts to just five and have the state government assume a much more direct role in deciding how much schools spend, which schools close, and what is taught. The cornerstone of the reform package is a transition to a so-called “foundation formula,” whereby the state would calculate how much districts should spend on their schools and provide them with corresponding grants. Vermont currently spends more than $2 Billion a year teaching about 80,000 public school students.

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January 21, 2025

Required Reading

Legislators spent the weekend reviewing key reports on education, housing, energy, and the environment. They are also going over details on legislation to be introduced this week. Later this month, Governor Scott will deliver his budget address to the legislature and unveil omnibus proposals addressing education, public safety, and affordability, with expected measures to tackle crime and recidivism.

Here are some highlights so far that set the stage for the next four months of work in Montpelier.

Education Funding

The Commission on the Future of Education report provided limited actionable recommendations, underscoring the complexity of education reform. Vermont's education spending has reached $2.2 billion, comprising nearly 25% of the state's $8.7 billion budget. Property taxes, the primary funding source, rose by 14% last year, with an additional 6% hike expected in 2025.

Clean Heat Standard

The Public Utility Commission’s Second Check Back Report to the Legislature estimates that a Clean Heat Standard (CHS) could cost $1 billion over the next decade, which could add $0.58 per gallon to heating fuel by year ten. Most of the economic benefits of a Clean Heat Standard come from the sale of biofuels such as renewable propane, biodiesel, and biomass because they are the "least expensive clean heat measures.” The Equity Advisory Group Report warned of disproportionate impacts on low-income Vermonters, who may struggle to benefit from the program while bearing higher costs. The Public Utility Commission Chair noted the CHS may not align with Vermont’s needs. Legislation to repeal the law (H.16) has been introduced in the House. Learn more at CleanHeatVT.com.

Housing Initiatives

The Agency of Commerce and Community Development (ACCD) is crafting a housing proposal to address barriers like water and sewer capacity, prioritizing rural areas. A new coalition called “Let’s Build Homes” aims to tackle the housing crisis by increasing development at all income levels.

Land Use and Infrastructure

Updates to Vermont’s Tax Increment Financing (TIF) law are under consideration, including lifting caps and extending timelines for infrastructure projects. Governor Scott appointed members to the new Land Use Review Board (LURB), created under Act 181 to streamline Act 250 permitting and support responsible development. Lawmakers are exploring disaster recovery measures, including post-disaster municipal buyout programs.

Transportation Funding

Vermont’s transportation budget for FY 2025 is $879 million. Vermont’s transportation system is funded through taxes on gasoline and diesel fuel, DMV Fees, and the Vehicle Purchase and Use Tax. More than half of the money comes from the federal government. With insufficient funding for transportation needs, the Vermont Agency of Transportation is evaluating new revenue streams, including an increase in motor fuel taxes, mileage-based user fees (MBUF) for light- and heavy-duty vehicles, along with a new retail delivery fee, and an increase in tire fees. Learn more here.

Climate Report

The Vermont Climate Council's annual report highlights aggressive greenhouse gas (GHG) reduction mandates under the Vermont Global Warming Solutions Act (GWSA). Vermont businesses may be concerned about certain aspects of these programs, particularly their financial implications. Over $524 million is allocated for FY25 climate initiatives, primarily funded by federal programs like the Inflation Reduction Act. However, as federal funds decrease post-FY25, the burden of financing could shift to state resources, potentially impacting local businesses through increased taxes or operational costs. The report emphasizes extensive investments in programs such as electric vehicle incentives, heat pump installations, and renewable energy initiatives, which may increase utility and infrastructure expenses for businesses. Learn more here.

How Cold Is It?

3508 heating degree days have been recorded outside our office since July 1. That’s 9% more than what we had over the same period last year. It’s about 10% less than what we usually have at this point in the heating season.

Truck Trouble

President Trump's declaration that he intends to remove the federal EV mandate and California’s decision to give up on its “Clean Fleet Standard” does not impact the regulation that is in effect here in Vermont. California still has permission under a 1970 law to enforce the Advanced Clean Car 2 and Advanced Clean Truck Regulation, which were adopted in Vermont three years ago. This requires vehicle manufacturers to deliver to Vermont an increasing percentage of zero-emission vehicles (ZEVs) starting with the 2026 model year. Learn more here. State regulators are hosting a virtual information session about the Clean Truck Regulation on Tuesday, January 28, at noon via Zoom. If you sell trucks, buy trucks, drive trucks, or depend on trucks, you should attend this meeting. Register here.

Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

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January 12, 2025

Back to Work

The Vermont Statehouse is buzzing as newly elected lawmakers settle into their roles. This session marks a significant shift in leadership: for the first time in over 20 years, Republicans chair both Transportation Committees. Representative Matthew Walker (R-Swanton) leads in the House, while Senator Richard Westman (R-Lamoille) chairs in the Senate. New leadership is also in place for key committees like the House Energy Committee, led by Representative Kathleen James (D-Manchester), and the Senate Natural Resources and Energy Committee, chaired by Senator Anne Watson (D-Washington).

Legislative Priorities

The spotlight is on the repeal of Act 18, the Affordable Heat Act. Over 50 lawmakers support a repeal bill (H.16), but it will need 76 votes to pass. Meanwhile, Vermont’s housing crisis and public education reforms are expected to take center stage. Governor Phil Scott, in his inaugural address, called for a course correction, emphasizing affordability as the top concern of Vermonters. Comparing the past four years of legislative decisions to being “lost in the woods,” Scott urged lawmakers to focus on practical solutions.

Course Correction on Climate Policy

Vermont faces mounting pressure under the Global Warming Solutions Act (GWSA), which mandates a 26% reduction in greenhouse gas emissions by 2025. Falling short of these goals could force the state to implement stringent policies, such as the Clean Heat Standard and vehicle emissions regulations. Critics argue the timeline is unrealistic, while advocates push for swift action to meet these ambitious targets. A state Superior Court ruling against Vermont could compel the Agency of Natural Resources (ANR) to implement the Vermont Climate Action Plan, which includes regulations like the Clean Heat Standard and the Clean Car and Truck Regulations.

What are these Rules?

The Vermont Advanced Clean Car Regulation requires that 35% of new cars delivered to Vermont dealers must be battery-electric or plug-in hybrids by 2026, increasing to 100% by 2035. Auto manufacturers say this will take “a miracle” to achieve. Manufacturers failing to meet these targets face fines or may reduce allocations of combustion-engine vehicles to Vermont, limiting consumer choices and affecting local dealer sales.

What Are These Rules?

The Advanced Clean Car Regulation requires 35% of new vehicle sales in Vermont to be electric or plug-in hybrids by 2026, ramping up to 100% by 2035. Auto manufacturers have expressed skepticism, warning of potential fines and limited inventory. The Advanced Clean Truck Regulation takes aim at zero-emission trucks, including pickups and heavy-duty vehicles. By 2035, manufacturers must hit sales targets of 40–75% across various truck categories. Infrastructure, range limitations, and higher costs have prompted concerns, especially following Daimler Trucks’ decision to halt diesel truck sales in Oregon—a state with similar mandates to Vermont. Daimler, through its Freightliner and Western Star brands, is the leading producer of large trucks in the U.S., accounting for 40% of all new Class 8 trucks sold in 2023.

Have Your Say

State regulators will host a virtual session on the Clean Truck Regulation on Tuesday, January 28, at noon. Whether you sell, buy, or rely on trucks, this is your opportunity to weigh in Register here.

By the Numbers

— Discover what we're driving in the Vermont Vehicle Index

— Get the latest on oil heat and propane sales in the Vermont Heating Fuel Index

— Gasoline and diesel trends are on the Motor Fuels Index.

— Check out the Vermont Fuel Price Report

Media Matters

— The Meadow Hill Report: Catch the latest from Montpelier with Matt Cota every Tuesday on WVMT’s The Morning Drive with Kurt and Anthony. Listen here.

— Ben, Pat and Matt explain Vermont energy policy and what's coming next. Watch here.

— Senator Welch delivers fuel in Woodstock this winter. Watch here.

— Vermont ViewPoint: Matt Cota discusses Vermont’s climate policy and EV mandates. Listen here.

— Volunteers in Waterbury come together to help a neighbor in need. Watch here.

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News of Note

As of January 1, EV owners in Vermont pay a new annual fee. Battery electric vehicles will cost an extra $89 annually, and plug-in hybrids will get charged an additional $44.50. This is expected to raise $1.7 million in 2026. Money from the fees on EVs will be set aside to fund more electric vehicle chargers. None would go to fix Vermont’s roads. At least not until the state creates a Mileage-Based User Fee (MBUF), which won’t happen until at least 2026. No new forms accompany the new fee. At this time, the fees are lumped together. When DMV staff enter the Vehicle Identification Number, the system identifies the type of vehicle and the associated fees.

Did you know... Most car horns beep in the key of “F.

That’s all for today’s Meadow Hill View. Thanks for reading, and we’ll see you next time!

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January 1, 2025

The First of Three: Vermont’s GWSA Mandates and What’s Ahead

The start of the new year marks a key milestone under the Vermont Global Warming Solutions Act (GWSA), a landmark law passed in 2020. The GWSA mandates that Vermont reduce its greenhouse gas emissions by 26% from 2005 levels by 2025, setting the stage for even more ambitious goals in the future. By 2030, emissions must be reduced by 40% compared to 1990 levels and by 80% by 2050. While we just passed the first deadline, the state is already being sued for non-compliance. An environmental organization has filed a lawsuit that claims not enough has been done. If a state Superior Court judge rules against Vermont, the Agency of Natural Resources could be required to implement the “Vermont Climate Action Plan.” This plan includes key regulations like the Clean Heat Standard and the Advanced Clean Car and Truck Rule, which mandates that fuel dealers sell less fuel and that vehicle manufacturers sell fewer gas-powered cars and trucks.

In response, newly elected Republican leaders in the Vermont House and Senate are pushing to limit the state’s legal exposure by making it harder to sue over non-compliance. They argue that these mandates, if enforced, could cause “undue damage” to Vermont families and the state’s economy. Auto manufacturers have expressed skepticism as well, with some saying it would take a “miracle” to comply with Vermont’s Clean Car Regulation, especially now that state funding for EV incentives has run out. Learn more about why it will take "a miracle." Complying with the truck mandate will take much more than a miracle. Half of all new Class 2b-8 trucks sold in Vermont must have zero emissions by the end of the decade. Less than 1% of commercial vehicle sales are ZEVs. New electric trucks cost two to three times more than comparable diesel vehicles and do not offer comparative performance and range capabilities. Additionally, there is no commercial vehicle charging network, which makes customer adoption of heavy-duty ZEVs and their day-to-day use impractical until the charging network is built.

The push to reduce gasoline and diesel consumption goes beyond vehicle mandates. The Climate Action Plan, which will be updated in June 2025, is expected to propose Vermont’s participation in a regional Cap and Invest program that would further limit the sale of motor fuels— or increase the cost. Unless the GWSA is amended, these policies could be enforced by court order at a significant expense to Vermonters.

Cleaning Up the Clean Heat Standard

The Vermont Legislature could decide this year to enact a Clean Heat Standard. While the results of the November election make that increasingly unlikely, parts of the law will remain in place even if no action is taken. This includes the Fuel Dealer Registry. Failure to register could be considered a violation of the Vermont Consumer Protection Act, which is enforceable by the Vermont Attorney General and carries a fine of up to $10,000. This is required of all fuel sellers, including small retail stores that fill or exchange propane BBQ tanks. Or sell kerosene from a stationary pump.

New Fees for EVs

As of January 1, 2025, registered electric vehicle (EV) owners in Vermont will pay a new annual fee. Battery electric vehicles will incur an additional $89 registration fee, while plug-in hybrids will be charged $44.50. With the growing number of EVs on the road, this change is expected to raise approximately $1.7 million by 2026. The revenue from these fees will be used to expand Vermont’s EV charging infrastructure. None goes to fix Vermont’s roads. At least not until the state creates a Mileage-Based User Fee (MBUF), which won’t happen until at least 2026.

Click here to watch an overieview of Vermont's Clean Heat Standard and EV Mandates from Matt Cota of Meadow Hill.

Counting Gallons and Taxes

Vermont’s gasoline tax is down slightly in Q1 2025 by about half a penny a gallon. That's because the average price per gallon has gone down. Sales are up slightly compared to the six-year average and where we were last year. For more information on taxes and sales of gasoline and diesel, go to the Motor Fuel Index. Information on heating fuel sales in Vermont an be found on Heating Fuel Index.

Time to Split

The Split the Ticket Fund has delivered over 100,000 gallons of free heating fuel in Vermont since it was founded in 2007. Check out ticketsplit.org and find out how you can donate dollars or gallons this winter. Thanks to Senator Peter Welch for showcasing how Vermont energy companies are helping their Neighbors in need. Watch the MeadowHill Media report here.

Meadow Hill Media is your reliable source for in-depth coverage of Vermont's energy, transportation, and climate policies.

Click here to support our team and help sustain our commitment to delivering the comprehensive reporting you rely on.

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