By Dara Torre, D-Moretown
In a typical session, the Legislature would be almost at adjournment by now, but with contentious budget bills and a complex education transformation bill yet to hash out, we're expecting to be in session into late May. The FY26 budget, aka the Big Bill (H.493), is headed to a Committee of Conference this week where appointed legislators from the House and Senate will reach a compromise on what to fund and deliver to Governor Scott for his approval. It's an especially difficult exercise this year in light of known and anticipated reductions in federal funding, including for critical health care and food security programs.
The Capital Bill (H.494) and the Transportation Bill or "T-Bill" (H.488) are also headed to a Committee of Conference. Meanwhile, H.454, the education transformation bill, has undergone some significant changes in the Senate Education Committee (summarized below) and is now in the Senate Finance Committee for further work on the proposed funding model. H.454 will also land in a Committee of Conference. The public may follow the work of the various Committees of Conference at https://legislature.vermont.gov/committee/committeesofconference/2026.
H.454/Education – This week, the House Education Committee will review proposed changes to the House version of the bill that have been proposed by the Senate Education Committee. Changes include the elimination of class size and district size minimums, changes to the district boundary selection process, expanded eligibility for private schools to receive public dollars and removal of proposed legislative appointments to the State Board of Education. Changes to the foundation formula are also likely (lower base amount, different weights). Be in touch with our senators soon with your input and questions. Here is the latest Senate version: (https://legislature.vermont.gov/Documents/2026/Workgroups/Senate%20Education/Bills/H.454/Drafts,%20Amendments,%20and%20Legal%20Documents/H.454~Beth%20St.%20James~%20Draft%209.1,%205-2-2025~5-2-2025.pdf).
Join me on an upcoming Zoom meeting to discuss the evolving and high stakes education bill later this month.
S.51/Tax credits – On Tuesday, the House passed a bill to put more money in Vermonters' pockets via various tax credits and exemptions. The bill proposes the following tax changes effective January 1, 2025:
- Earned Income Tax Credit (EITC) – for individuals without children – matches Vermont's EITC to the federal EITC (expands Vermont's credit from 38% of the federal EITC to 100% of the federal credit).
- Child Tax Credit – raises the age limit from 5 to 6 years old for children who create a tax credit for their families.
- Social Security income limits – raises the income limits for taxpayers who are eligible to receive an income tax exemption on their social security income from $50,000 to $55,000 (with a phase out up to $65,000) for individuals and from $65,000 to $70,000 (with a phase out up to $80,000) for joint filers.
- Civil Service Retirement System (CSRS) income limits – expands the income limits for taxpayers who are eligible to exempt the first $10,000 of their CSRS income from income tax from $50,000 to $55,000 (with a phase out up to $65,000) for individuals and from $65,000 to $70,000 (with a phase out up to $80,000).
- Military Pension and Survivor Benefits – exempts military retirees and their survivors with income of $125,000 or less from having their military pension and survivor benefits pay state income tax. For income above $125,000, the exemption phases out at $175,000 of income. Military retirees will no longer have to choose between taking their military pension exemption or their social security exemption but can exempt both as long as they qualify under the income limitations.
- Veterans Tax Credit – establishes a credit for our most vulnerable veterans who typically do not qualify for military pensions. Veterans with income of $25,000 or less will be eligible for a $250 refundable credit (even if they do not have a tax liability, they are eligible for the credit). This credit phases out up to an income limit of $30,000.
S.127/Housing development – An important housing bill comes up for a vote in the House this week that accelerates investment for all types of housing. S.127 updates and creates financing programs to spur infrastructure development to help communities of all sizes create housing in partnership with developers and other financiers. This includes a new Community and Housing Infrastructure Program (CHIP), a project-based tax increment financing (TIF) program, as well as continued funding for affordable housing via the Vermont Housing Conservation Board and the popular Vermont Housing Improvement Program that brings more rentals online.
May coffee hours:
Saturday, May 17, Three Mountain Cafe, 10-11 a.m.
Monday, May 19, Moretown General Store, 8-9 a.m.
Tuesday, 5May 20, Black Cap Cafe & Bakery, 8-9 a.m.
Stay in touch –
