DEAD OF WINTER
Leonine Public Affairs The legislature continued developing the FY2022 budget this week. The House and Senate Appropriations Committees started the week with a joint public hearing via Zoom and heard from more than 70 organizations and members of the public on a wide variety of budget proposals. House Appropriations spent the rest of the week hearing from state agencies and departments on the governor’s proposed FY2022 budget.
Meanwhile, many of the policy committees focused on the sections of the budget over which they have jurisdiction. The policy committees are refining their budget priorities and each will submit a memo to the House Appropriations Committee by next Friday outlining their recommendations for the budget.
The Senate passed the FY2021 Budget Adjustment Act bill, H.138, this week. The bill makes various adjustments to the budget for the current fiscal year.
The Senate added funding for body cameras in the Departments of Motor Vehicles, Fish & Wildlife and Liquor and Lottery budgets. However, deployment of body cameras is conditioned upon the appropriate training of staff and the adoption of policies on use and retention of records by each department.
The bill also makes changes to spending in various other agencies of state government including Human Services and Transportation. Here is a link to the highlights of the Senate-passed bill. The bill was sent back to the House for consideration of the changes made in the Senate.
The Joint Fiscal Committee met Thursday to approve more than $100 million in rental and utility assistance. The package will support lower-income Vermonters to ensure ongoing access to housing in the pandemic. The funds are from the second federal stimulus bill that was approved at the end of 2020.
The Department of Labor continued efforts to address the data breach caused when 1099-G forms were mistakenly sent to the wrong recipients at the beginning of February. Governor Phil Scott announced on Tuesday the state’s insurance plan will cover the majority of the cost for providing affected Vermonters with identity theft protection services.
The state will pay the $250,000 deductible and the insurance plan will cover the rest. This is a far smaller expenditure than the $7 million the state was considering last week to cover the cost of the identity theft services.
The legislature’s work continues against the backdrop of the fight against COVID-19 throughout the state. State officials confirmed the appearance of the B.1.1.7 variant of the virus in the Burlington wastewater system this week. The variant, which was first detected in the United Kingdom, marks a new phase in the fight against the virus according to Department of Health Commissioner Mark Levine.
Governor Phil Scott announced on Friday the state will open the next age band for Vermonters to be eligible for the COVID-19 vaccination. On Tuesday, February 16, Vermonters age 70 and up will be eligible to receive the vaccine. The governor said vaccine supply is increasing nationally.
The governor also announced on Friday that music programs will resume in Vermont schools. This follows the announcement last week that sports programs would reopen. The governor said both music and sports are critical for the mental health and wellbeing of Vermont children. The governor said reopening these programs is done in close coordination with the Department of Health.
The House Ways and Means Committee took testimony this week on H.189, which proposes to make changes to the corporate income tax. H.189 amends how a multi-state corporations’ overall net income is allocated to Vermont. The bill provides that at the end of a three year period the allocation would be based solely on the corporation’s sales to Vernonters, as opposed to also considering other factors such as physical assets in Vermont and payroll in Vermont. The effective impact of this change would be a boon to in-state manufacturing firms that export the majority of their production and an increase in tax liability for firms based outside of Vermont that provide services inside the state. One example cited during testimony of a type of company that would experience increased tax liability is transportation network companies like Lyft and Uber. Since both companies do not have property or employees in the state, basing the Vermont portion of those companies’ overall net income on just their Vermont sales would drive up their tax liability. H.189 makes several other changes to the corporate tax, including a shift from the Joyce entity-by-entity method to the Finnegan taxpayer method and the repeal of the definition of overseas business organizations.
Through a special arrangement with Leonine, Vermont Business Magazine republishes Leonine’s legislative report on vermontbiz.com