On April 26, 2023

Heat bill approaches finish line

With potentially just three weeks left in the legislative session, one of this year’s most controversial bills, the Affordable or Unaffordable Clean Heat bill (depending on your perspective), S.5, cleared the House on Friday after two days of contentious debate. The approval in the House was 98-46, with several members absent, signaling an ominous override to an expected veto by Scott.

S.5 now moves back to the Senate to see if they agree with any changes the House made or ask for a conference committee to bridge any differences. The Senate was previously one vote short of being able to sustain a veto of the Governor. However, with changes to the bill in the House, albeit minor, nothing is assured. Previously the three Windsor County senators supported S.5, while the three Rutland County senators opposed it.

The legislation sets up a system with tradeable credits for heating improvements, such as weatherization, installation of heat pumps and electrical upgrades. It also requires fuel companies to reduce their sales each year (oil, propane, kerosene). The Natural Resources Secretary estimated the program will increase fuel prices by 70 cents per gallon. Some have suggested it could be more, while others indicated it could be less.

To take some of the uncertainty out of the proposal, I proposed a tri-partisan amendment that would have made it clear that fuel prices could not go up more than 20 cents per gallon over the New England average. We offered this amendment in the spirit of assuring Vermonters that their worst fears wouldn’t be realized.

I went on to say to my House colleagues, that if you are comfortable that the price impact of S.5 will be minimal, then this amendment should be easy to support. On the other hand, if you believe it will be more and want the bill to pass to allow it to go higher, then you may want to reject this amendment. Unfortunately, the amendment failed to pass.

Even though the legislation, if enacted, goes into effect this year, final rules must still be approved by the legislature in 2025. Rep. Scott Beck of St Johnsbury offered an amendment to move the date of the publishing of the final rules to September of next year to allow candidates in the 2024 general election to talk with voters about it and indicate where they stand. That amendment also failed.

On Friday, Governor Scott issued a statement reaffirming his opposition to S.5. He pointed out that the bill was not a “study” as some have indicated and pointed to language in the legislation: “Effective on passage (now), the Clean Heat Standard is established, and the Commission shall adopt rules and may issue orders to implement and enforce the Clean Heat Standard Program.”

While there is wide agreement, we need to find ways to reduce our carbon emissions, Vermont has the lowest greenhouse gas emissions of any state and represents just 0.1% of the entire country’s emissions. Even the presenter of the bill indicated that the legislation would not impact our weather patterns. And because no other state has implemented such a heating fuel regulatory system outlined in the bill, no one really knows what the impact will be.

As you can probably figure out by now, I voted No on S.5 after the failure of several amendments to modify the legislation.

Other issues of interest:

The House tax writing committee is reviewing a proposal to increase all personal income tax brackets as well as corporate income taxes to fund the House version of S.56, the childcare assistance legislation. The bill will cost an estimated $145 million annually and is expected to grow to as much as $250 million when fully implemented. Additionally, the House version requires that public schools offer full day pre-k for 4-year-olds by 2026. The governor had included $56 million for childcare in his proposed budget without increasing taxes.

The Senate Appropriations Committee concluded their work on the state budget for the new fiscal year on Friday. They added the $22 million increase in motor vehicle fees to their version of the bill. It now heads to the full senate for a vote this week.

The session’s major housing legislation, S.100, continues its review in the House Committee on Environment and Energy regarding the Act 250 language in the bill. Environmental groups want to continue Act 250 review for housing development in 99% of the State, while municipalities and the tri-partisan legislative rural caucus are advocating for changes to remove some of the red tape that is seen as a barrier to developing more units. Housing was deemed a priority by legislative leaders and the Governor prior to the session, however continuance of regulatory hurdles could impede getting more homes built.

In the latest state revenue report, personal income taxes, as well as corporate and sales taxes fell below expectations. Secretary of Administration Kristin Clouser said she is uncertain whether a second straight month of disappointing personal income tax revenues was a trend foretelling a weakening economy, or it was just an aberration. Personal income taxes represent the largest part of the State’s general fund revenue.

Vermont officials are planning to stockpile the abortion medication mifepristone, which has long held FDA approval, but is now under review by the courts.

Phil Scott is the nation’s most popular governor according to a new poll by Morning Consult with an approval rating of 78%. The Governor must be wondering then why his message of not increasing taxes or fees is not resonating as well with the legislative majority.

A lot will be happening over the next few weeks as the 2023 Legislature attempts to wrap up its work. State tuned.
Rep. Jim Harrison is the Statehouse representative for Mendon, Killington, Chittenden and Pittsfield. He can be reached at JHarrison@leg.state.vt.us or harrisonforvermont.com.

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