04/22/2024
250 Changes The effort to update Vermont's half-century-old land use law, Act 250, is nearing the finish line. However, it's not nearly what pro-growth lawmakers say is necessary. Critics argue that it does more to conserve land than address Vermont’s housing crisis. The legislation proposes classifying Vermont into "tiers” when defining where and how development is regulated. There are temporary exemptions (until 2027) from Act 250 for housing projects with up to 75 units near designated growth areas, excluding floodplains and river corridors. It allows developments of up to 50 units near village centers or transit routes and maintains exemptions for mixed-income housing projects in some towns. The legislation also proposes replacing the volunteer Natural Resources Board with a professional Land Use Review Board for appeals, shifting away from court-based appeals.
Property Tax Hike Looming Early predictions of double-digit property tax increases are coming true. While some lawmakers brushed off this possibility before the session began, we are now at the end of lawmaking season and a hike looks inevitable. Vermont homeowners will likely face a 15% increase, while commercial properties and second homes will pay about 18% more. To lessen the burden on property taxpayers, House lawmakers have proposed a 6% tax on cloud-based software and a 1.5% surcharge on short-term rentals which will generate $27 million. It only makes a small dent, lowering the tax by a single percentage point. Governor Phil Scott issued a statement that not enough has been done to address the increase in spending.
Transportation Legislation on the Move A comprehensive bill that spends more than $900 million on transportation projects is in the final stages of approval. About $125 million will try to get Vermonters to buy less gasoline. This includes $60 million for public transit, $48 million for rail, and $12 million for EV incentives and EV supply equipment. The proposal also adds an annual fee of $89 for an all-electric vehicle and a $44.50 fee for a plug-in hybrid. The money would go to a fund to further build out Vermont’s electric vehicle charging infrastructure. All is subject to change when the House and Senate work out a compromise to resolve the differences between the two different transportation spending bills. Already, House leadership is sending the message that EV’s should not pay any extra fees to pay for either fix the roads or fund Vermont’s EV charging infrastructure.
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Fixing Fixed Price Programs
Oilheat and propane customers are asking two simple questions:
1) How much will the Vermont Clean Heat Fee cost per gallon?
2) When is the earliest it could go into effect?
The first question is unknown and won’t be until the Public Utility Commission finishes designing the Clean Heat Standard in December. So far the best guess is 70 cents per gallon. While the Legislature won’t decide whether to pass the fee until next year, there is urgency now because more than one hundred local heating fuel dealers are preparing to offer summer pre-buys and fixed-price contracts to their customers. These popular price protection plans provide stability and, in most years, lower costs than if the fuel was purchased during the colder, winter months. But it’s nearly impossible for dealers to lock in rates for their customers and comply with Vermont’s guaranteed price law (9 V.S.A. § 2461e) if they are uncertain of their fixed costs. If a clean heat credit fee is applied retroactively on fuel sold after January 1, 2025, fuel sellers will be required to honor that fixed price. And if the fee is greater than their gross margin, it is quite possible that some of these local businesses will not be financially viable. The Public Utility Commission’s Technical Advisory Group voted unanimously on April 18 for the PUC to clarify when the first obligation period begins and ask that it not start until January 1, 2026, at the earliest. This was in response to the concern that any compliance fees would be applied retroactively on heating oil and propane gallons sold before the Clean Heat Credit fee was established by the PUC.