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.
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News of Note
Rising electricity demand is a significant challenge for cutting greenhouse gas emissions.
Loose donkeys cause commotion in Montpelier.
Vermont's population continues to decline, a trend that will be challenging to reverse.
Vermont needs to build, build, build, or else the state’s housing deficit will pose an existential threat to its future economy.
Why your electric panel may be the key to using less fossil fuel.
Vermont’s tech sector received a $24 million federal boost to expand semiconductor manufacturing.
Find your lawmaker on the Meadow Hill Legislative Database at MeadowHillMedia.com/data.
Learn more about the legislation we are watching a MeadowHillMedia.com/watch.
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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
