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Legislative Update February 14, 2020

02/18/2020 11:28 AM | Denis Bourbeau (Administrator)

DRM | Downs Rachlin Martin PLLC

Competing Visions of Vermont’s Economy
 
Arecent article from The Economistthat was widely circulated last week in the Statehouse suggested that Vermont’s economy is among the worst performing in the nation. The magazine stated bleakly, “As wages grow across America, one state is left behind… Vermont has seen the weakest wage growth of any state in the past decade….” The article gave a somewhat confusing description of the cause of the stagnation, but the impression of a state of malaise was undeniable.

A few days later, however, Vermont economist Art Woolfpublished an articlestating that incomes in Vermont “have been climbing steadily since the end of the recession in 2009 and we’ve seen record-high income every year for the last six years.” Woolf continued, “I predict we will have another record-breaking year for Vermont family income [in 2019], with median income at nearly $90,000.”

If that wasn’t enough to confuse a casual observer of Vermont’s economy, Vermont Business Magazine then published an article with this headline:  “Study:  Vermont’s economy ranked as above average.” The study by Seniorliving.org concluded that Vermont has the number 19 healthiest economy in the U.S.

Perhaps the conflicting reports about the health of the state’s economy explain the legislature’s ambivalent view about whether to do anything to improve it.

The administration has proposed aneconomic development initiativethat has received a jaundiced reception by the House Ways and Means Committee. After hearing from a handful of academics and economists – but no businesses or trade groups – some members of that committee have concluded that Vermont shouldn’t try to compete with other states with economic incentives. The committee is considering another bill,H.640, that would force companies that apply for grants under the state’s Vermont Economic Growth Incentive program to disclose confidential information.

At the same time, the legislature is considering a bill,S.267, that would significantly increase the cost of electric power in Vermont. The state’s relatively high power costs already put many Vermont businesses at a disadvantage. Electric utilities testified on Friday that they could meet the requirement of S.267 that they provide all of their power through renewable sources by 2030 with little impact on rates. But the bill also requires that ten percent of that power come from small-scale, high-priced projects, and that would raise rates by $15-25 million per year for Green Mountain Power alone.

The governor’s recent vetoes of paid family leave and higher minimum wage bills underscore the divergent views of the administration and the legislature on the state of the economy. While Gov. Scott saw both bills as threats, many Democrats viewed them as economic development measures that would draw more workers to Vermont.

Vermont has two problems that almost everyone agrees create huge challenges for businesses:  a shortage of affordable housing, and a shortage of workers. Yet there are few serious proposals under consideration in the Statehouse to address either.

Vermont’s business community – if not voters in general – are likely to take note if the legislature fails to approve the administration’s economic development bills, does not address the issues of worker and housing shortage, and significantly raises the cost of electricity by doubling the required purchase of small-scale renewable power. 

Divided House committee approves Act 250 compromise

After more than a year of work, the House Natural Resources Committee voted 6-3 to approve sweeping changes to Vermont’s landmark land-use law, including a provision redesigning the Natural Resources Board and limiting the authority of volunteer district commissions.

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Bill would ratchet up utility renewable energy standards

The Senate Natural Resources Committee may have been overwhelmed by the complex testimony it received on Friday from several of Vermont’s electric utility companies.

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Global Warming Solutions Act moves forward

The Global Warming Solutions Act, H.688 was voted out of the House Committee on Energy and Technology on Tuesday after the committee largely rejected last-minute proposed changes from Agency of Natural Resources Secretary Julie Moore.

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Economic disclosure for VEGI: a burden on business or needed transparency for taxpayers?

The House Committee on Ways and Means heard testimony onH.640, in anticipation of the bill making its way to the committee. The bill would require Vermont Employment Growth Incentive applicants to disclose the number of jobs added, capital expenditure that was promised, average wage, and progress made each year towards the goals.

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