This commentary is by Shawn Shouldice, state director of the National Federation of Independent Business in Vermont.
With crossover and the snow behind us, the Vermont Legislature is now wending its way to adjournment of its 77th biennial session. Unfortunately, several pieces of legislation that concern Vermont’s Main Street small business owners still loom as lawmakers work to enact a state budget and pass their priorities into law.
One thing is clear: Unless positive action is taken in the Statehouse and harmful and shortsighted policies avoided, small businesses will continue to disproportionately bear the lingering economic consequences of Vermont’s Covid-19 shutdowns and restrictions, as well as record high inflation, worker shortages, and the state’s already high taxes and regulatory burden.
Our elected leaders in Montpelier must keep them top of mind as they consider an array of costly programs and regulations proposed this session.
Several proposals that would create new and increased taxes totaling half a billion dollars are being pushed forward and would create mandatory new benefit schemes, increased payroll taxes and premiums, and make it harder than ever to grow or start a small business in Vermont.
This agenda is threatening while small businesses are still in recovery mode, and the difficulty of finding workers is unprecedented. Indeed, according to the most recent National Federation of Independent Business monthly jobs report, 43 percent of owners reported job openings that could not be filled.
During the pandemic, while large retailers were allowed to continue operations, local mom-and-pop stores were forced to shutter. Many small businesses were left with no other recourse but to close, some permanently, or cut back their hours or scope of operation, and they continue to struggle with hiring.
Now, small business owners are once again left to worry about new obstacles and disadvantages created by legislators who disregard the burdens of the increased cost of goods and services..
While Gov. Phil Scott tries to discourage these proposals and improve the business climate and affordability for all Vermonters, activists think it’s time to hike the payroll tax and create an expensive, government-run paid leave program. In fact, the Vermont House of Representatives has approved legislation that would impose a 0.55% payroll tax to fund the most generous paid leave program anywhere in the U.S.
Over in the Senate, another bill was approved that would impose a 0.42% payroll tax to fund child care subsidies. Lawmakers are pushing this legislation at a cost of $190 million, despite Gov. Scott’s state employee-negotiated paid leave program that will be offered very soon.
Increasing Vermont’s payroll tax and expanding its paid leave law continues to ignore that most small businesses work closely with their employees to meet their needs without being told by the government how to run their business. These bills are costly one-size-fits-all approaches and yet more inflexible government mandates that will make it more difficult for Vermonters to run their small business or start up at all.
Candidates for political office always claim to champion small businesses, Main Street employers, and their workers at election time. But when it comes time to govern and make choices, these pledges and commitments are often forgotten. Gov. Scott and pro-small-business legislators need the help of Vermonters to make sure common sense and moderation prevail in the Capitol.
Small businesses bring character and vibrancy to our communities, create jobs, pay taxes, support charities, and keep money circulating in the local economy. Please ask your lawmakers to prioritize growing Vermont’s economy, lowering the tax and regulatory burden to help restore the Main Streets that they so often champion on the campaign trail.
