This commentary is by Kathleen James, D-Manchester Center, assistant majority leader of the Vermont House of Representatives.
At his weekly press conference on May 17, Gov. Scott delivered startling news: Legislation passed by the General Assembly in 2023 would cost Vermonters “roughly $1,200 per household per year.” Wow! Good thing that’s not true.
In making his calculation, the governor tallied up four items, including a $100 million payroll tax (true), $20 million in DMV fees (true), $30 million in property tax pressure (maybe), and $180 million in potential clean heat mandates (false).
If you divide that total ($330 million) by the number of Vermont households (262,000), bingo: That’s $1,259.
That’s a lot of money, especially at a time when many Vermonters feel they are falling farther behind. So before we drop those imaginary invoices in the mail, we should check the math.
- Payroll tax: The Legislature passed a landmark child care bill this year, one of our top priorities. Child care is vital infrastructure: It supports kids, families, businesses and our economy by allowing parents to work. But across Vermont, families can’t find spots or afford tuition, while child care centers struggle to pay their staff and keep their doors open.
H.217, which passed by overwhelming multipartisan votes in both House and Senate, offers a fiscally responsible solution. It will expand subsidies to make child care more affordable for more families, provide financial stability for providers, and boost pay for our valued early childhood educators. We’ll pay for this expansion through a payroll tax that kicks in on July 1, 2024, and will be shared by employers (0.33 percent) and employees (0.11 percent).
Here’s an example:
Right now, a four-person family with an infant and toddler receiving full-time care at a center-based child care program — and an income of $105,300 — is not eligible for subsidy. They’re spending about $35,204 a year out-of-pocket for child care at $677 per week.
With the passage of H.217, this family would become eligible for subsidies with an estimated co-pay of $225 per week, saving $23,500 a year on child care. Starting in 2024, this family would pay an additional $115 for the year through the new payroll tax.
- Property tax: The “$30 million in property tax pressure” refers to universal school meals, an extremely popular program that provides every student with a nutritious breakfast and lunch — free of charge — at every public school.
Universal school meals was funded entirely by the federal government during the pandemic. Vermont schools strongly support continuing this program. They say it erases cafeteria stigma and is a game-changer for kids’ nutrition, health, behavior and readiness to learn.
In the upcoming year, the estimated $29 million will be covered by surplus revenues in the Education Fund. After that, it could mean about 3 cents on the property tax rate. But the costs are expected to drop by as much as one-third, due to changes in the way schools are partially reimbursed for meals by the feds.
We don’t assess family income or charge extra fees for textbooks, riding the bus or the extra support many students need to learn. Why would we charge anyone extra for the most basic part of any child’s day: a meal?
Taken together, families will benefit significantly from these two programs, saving money on both childcare and school meals.
- DMV fees: The Department of Motor Vehicles hasn’t seen a fee increase since 2016. This has contributed to a $14 million structural deficit in our Transportation Fund, which pays for things like paving roads, building bridges, plowing and public transportation. For most Vermonters, this will mean a $6 increase in the driver’s license fee and a $15 increase in car registration fees. Raising fees occasionally to keep pace with inflation is good governance, plain and simple.
- “Potential” clean heat mandates: In May the Legislature passed S.5, the Affordable Heat Act. It’s a proposed measure that could help a lot of Vermonters transition away from price-volatile fossil fuels over time — for example, by weatherizing a drafty home or installing heat pumps — at more affordable prices. But offering Vermonters these incentives could also mean that fuel prices go up.
How much? We need to find out. So instead of putting this program into place, S.5 commits the state to an intensive two-year study and design process. We’ll get the facts through impartial studies and draft the rules that would govern the proposed program.
All of this information will come back to the Legislature in 2025. The House and Senate could approve the program, revise it a little or a lot, or stop it completely if the evidence shows it won’t benefit Vermonters. It can’t move forward unless it clears these hurdles, and the earliest it would begin its gradual rollout is 2026.
As passed in 2023, S.5 does not raise the price of fuel or impose mandates on Vermonters, full stop. If the cost of home heating goes up next winter, it’ll be for the same reason as always: a volatile global oil market.
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I hate negative politics, and I don’t like the punch-counterpunch approach. But while we can and should debate the merits of any particular bill or policy, the conversation has to be based on facts instead of sound bites.
These policies are fiscally responsible in the short and long term. The investments they make will help us to build stronger families, schools, communities and stable state government, while making life more affordable for many Vermonters.
So here’s the good news: Having checked the math, your $1,200 invoice will not be arriving in the mail.