Other Important Vermont Small Business Issues

Date: January 14, 2014

Related Content: NFIB in My State State Vermont

The Legislature will once again be debating the way Vermont
pays for education.  For the second year
in a row, Vermonters are facing a significant increase in their property
taxes.  In November, the Vermont Tax
Commissioner suggested that the statewide property tax may increase by 5-cents
in 2015.  This is despite the fact that
public school enrollment rates have been steadily declining over the last
decade.  Lawmakers will have to tackle
thorny issues such as local control and spending decisions, the benefits of
school consolidation, the effectiveness of income sensitivity rules in
calculating property taxes, as well as adjusting the threshold levels for
penalizing school boards for over spending on their budgets.  However, despite building pressure, it is not
clear if the Legislature is willing to take significant steps during this
session to address these issues.

Tied into the debate over property taxes is the ongoing
debate over Vermont’s ‘Current Use’ tax policy.

The Current Use program allows for landowners who preserve
their property for forestry or agriculture to pay a lower tax rate than those
whose land is open for development. The program originally started in 1978 but
enrollment in current use spiked to more than 17,000 parcels, or 2.3 million
acres, as of December 2012. This has cost the state about $54.6 million in tax
revenue to the education fund.  The
question being asked by many legislators is whether Vermont can afford to
continue this level of tax exemption in light of the ever-increasing pressure
of Vermont’s statewide property taxes.

During the last
legislative session, labor advocates were able to gain passage of a bill that
granted collective bargaining rights to home care workers, as well as a “fair
share” bill, which required some education, state and municipal employees who
opt not to join a union to pay fees to the union.  During the upcoming session, pro-labor groups
are hoping to go one step further and pass legislation that would grant
unionization rights to child care workers. 
A group of child care workers, backed by the Vermont Early Educators
United, an affiliate of the local American Federation of Teachers, will resume
their longstanding fight for the legal right to join a union.  S.52, the child care unionization bill has
already passed a key test vote in the Senate Education Committee and will
likely be taken up by the full Senate in the next few weeks. Senator Dick
McCormack, D-Windsor, who chairs the Education Committee, is one of the bill’s
lead proponents, and has said that passage of S.52 is a “high priority” for him
in 2014.  House Speaker Shap Smith has
stated that he is unsure whether the child care unionization bill has enough
support to pass the House.

During the last legislative session the Vermont House of
Representatives passed a bill that would require all foods that contained
genetically modified organisms (GMOs) to be labeled.  The Senate is set to debate the bill this
session. The bill defines GMOs as those created from organisms in which the
genetic material has been changed via in vitro nucleic acid techniques or cellular
fusion.  Under the proposed legislation,
foods for sale in the retail marketplace would require labeling if they are
produced “entirely or partially” using these techniques. Scientific research
has not conclusively shown either the safety or danger of GMO foods.  Proponents of the GMO labeling legislation
principally argue that consumers have the right to know what is in their
food.  GMO labeling would help consumers
make an informed decision about what products they are going to buy. 

Lawmakers have been put on notice by State Treasurer Beth
Pearce that the chronic underfunding of the Vermont State Teachers’ Retirement
System (VSTRS) must be addressed sooner rather than later.  Although, teacher pensions have been consistently
funded by the Legislature in recent years, teacher health care benefits have
not. Based on the current cost of healthcare and demand for services, Vermont
is falling about $20 million short each year. 
While state workers’ pensions are funded at 80 percent, the teachers’
retirement system is funded at 60 percent, well below actuarial
recommendations.  Pierce has made some
suggestions that could help indirectly, but there will be a need to commit
“significant” money to VSTRS health care funding soon.  “The bottom line is, taxpayers are going to
have to ante up for our promises and our obligations,” according to Pierce.

Related Content: NFIB in My State | State | Vermont

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