Vermont Legislature SmartTranscripts:

[Rep. Matthew Birong (Chair)]: Alright, everyone. Welcome back. It is, 10/22. Sorry. 11/22. And we are having counsel run through us a senate proposal amendment on age five zero nine and act relating to Vermont State Employees Retirement System Group g membership. Counsel, good to see you, sir. Yes, sir.

[Cameron Wood (Office of Legislative Counsel)]: Good morning. For the record, Cameron Wood, office of legislative counsel, walks through the Senate proposal of amendments H519. Before I share my screen and dive into the amendments specifically, just a quick recap. You all remember 05/19 was about municipalities that participate in the state retirement system, and authorizing the law enforcement employees of those municipalities to move over into Group G of the state retirement system. And the towns, I think, were Randolph, Bethel, and Danville, but there were only one town that currently has employees that meet that definition, and so it would be moving a handful of individuals over to Group G. So, the amendment that you have is a strike all of Section one, and replacing it with a new Section one. Section one was about the definitions. And the reason that this is being done is actually has nothing to do with this bill. But I Okay, tell me more. Sorry. It has nothing to do with the transfer of these employees. Should say it that way. Sure. One thing that I noticed in doing some research as part of the bill, when I was looking at the definitions, there was an error in some of the dates of when you've previously moved employees into Group G. So, this is the technical amendment to fix an error in dates that are in the definitions section. So, for example, right here, first page, I've highlighted all the changes here, we'll run through them quickly. This is the definition of Group G member, and the first subdivision is about the Department of Corrections employees that you all moved over back in 2022. Okay? What you have is the following employees, and I'm just reading subdivision I, the following employees who were first employed in the position on or after 07/01/2023, or who are members of the system as of 06/30/2022. That's how the language read. There's a one year gap that's missing of employment. And so this is simply to kind of retroactively fix that error to ensure that individuals who are employed within that year are covered under the definition. So really just technical fixes to just fix some scrimmage errors in the statutory section. That's the first one. On that page, you'll see that change done. I believe it's just two more times. So, here on page four, similarly, making the same change. And same thing down here on this subdivision two, making the same change to fix that. And then there's two I believe there's only two other small changes. One of them for sheriffs, when you move sheriffs over. This is on page seven of this amendment. The language said for sheriffs that are employed after 01/01/2025, which excludes the actual date of 01/01/2025, it is highly unlikely, and I don't imagine anyone was actually hired on that date because it's a state holiday. However, it is conceivable that that could happen. And so I changed that to be on or after January 1. And then similarly with the language for this bill, the municipal law enforcement officers that you're moving over under 05/19, I made a similar change here to say anyone who's employed on or after 01/01/2027. Because, again, conceivably, someone could start on that day. And so, that's the other technical fix. So, that's it. Those are the five technical changes that were made on Senate version. It had to be done as a strike all because I had to bring in subdivisions that were not initially part of the bill, and doing it in instances was gonna get a little messy. So they did it as a strike all. Either just We're almost

[Rep. Matthew Birong (Chair)]: right down the whole thing. Gotcha. That's the change. Change in today. Rep. I go to your

[Rep. Lisa Hango (Vice Chair)]: No. I just wanted to make sure that there was nothing substantive that Seneca Vox changed, and apparently not.

[Cameron Wood (Office of Legislative Counsel)]: Ma'am, those are the highlights of the changes. Everything else in that section, all the underlying language, that's all the same as the bill that you all passed. So, all right, so we got two

[Rep. Matthew Birong (Chair)]: the proposed amendment on the floor today. I heard earlier, Representative Hooper, you are the shepherd of this one. Be clear with the changes for the presentation on the floor today. No, I'm sure you'll on that. I'm sure counsel will help you hone that in. So, yes, strike all with a technical change primarily around those dates. But, yeah, as we shift over to the next bucket of testimony, if you wanna Cheachow a Counsel, if he has time now or later before, please do. Excellent. Mr. Wood, thank you. It's always a pleasure. Yes. You're welcome. Right, and you're a little bit ahead of schedule right now. Yes, Kennedy. Thank you. Alright. Any other discussion or comment on the Senate proposal amendment? Nope. Barring no further comment, favorable funds. You're favorable fund at ten point zero one Straw Hole. Curve some proposal amendment. Okay, we'll talk about

[Cameron Wood (Office of Legislative Counsel)]: this when we go offline.

[Rep. Matthew Birong (Chair)]: Yeah, yeah, yeah, yeah. We do have our next round of testimony, seems like everyone's here. So, going move on to nine fifty four, an act relating to the approval of an amendment to the Charter of the town of Stowe. And we have joining us today some folks from the business community. So we wanted to hear from operators and merchants on their perspective with the proposal that we reviewed a couple of times. So we're gonna start with Megan from Northwood Gallery. How are you?

[Megan Okalita (Northwood Gallery co-owner)]: Hi, hi, everyone. How's it going?

[Rep. Matthew Birong (Chair)]: Not bad.

[Megan Okalita (Northwood Gallery co-owner)]: Great, I'm going to leave my camera off. I am out of the country right now. So my internet is a little spotty. So hopefully everyone can hear me okay.

[Rep. Matthew Birong (Chair)]: No, no, no problem at all. No problem at all. I hope you're in a place that's sunnier than it is here.

[Megan Okalita (Northwood Gallery co-owner)]: It is. Yes, it's been nice to see the golden orb. That is for sure. All right, I'll jump right in here. Hello, everyone. My name is Megan Okalita, and my husband David and I took over at Northwood Gallery in Stowe almost a year and a half ago. We're both longtime residents of Huntington, Vermont, so we've been in the state for quite a while. Our gallery exclusively features Vermont artists, providing a connection point for customers and over 80 Vermont residents who are artists here. I'm here today to discuss the negative impacts of raising the town tax to 2%, the negative impacts it will have on our business and the local community. When we first took over the gallery, we reviewed reports and were quick to notice that the business depends on the tourists to survive. The tourism business is dependent not only on a strong national economy, but here we're also dependent on the weather. While there was a nice uptick this winter, we also saw out west that one bad ski season is all that stands between many small businesses and bankruptcy. Last foliage season was another example of the negative impacts of the changing climate. How many years of brown leaves will keep people coming here? What happens if the tourism dries up? Who will then pay the 2% tax? Our hope has been to get more locals to shop with us and shift the perception that Stowe is too expensive for locals, and this tax will only widen that gap. Stowe

[Rep. Matthew Birong (Chair)]: is

[Megan Okalita (Northwood Gallery co-owner)]: a beautiful town, bustling with restaurants, shops, and outdoor enthusiasts. People feel safe here and it holds the Vermont charm that so many people know and love. Why should Stowe only be accessible to those with money? We've lost sales due to the 1% sales tax, so I can only imagine how off putting it would be for visitors from states with much lower taxes to now see a 2% town tax. Implementing an 8% tax on people who are funding our tourist dependent economy seems counterintuitive to us. Some of those in favor of the local tax increase, cite the ability of ski tourists to absorb the cost increase. We'd like to add that the bulk of our business does not come during ski season. While the average ski visitor may have enough disposable income to pay an increased local tax, the facts remain that many of our guests are traveling here in the summer and the fall months. Based off of our sales data, these customers are spending less per transaction than our winter visitors. We have the same bills to cover during the shoulder seasons. April and November are months where we really depend on locals to come into the stores for those months to not be a total loss for us. Locals will not shop in store with a 2% tax when they can go to a neighboring town or online for the same products at a lower price. This will also directly increase what we pay with a credit card company every month. Here's a very basic example. If an item costs $100 we charge the customer $107 We then pay the taxes owed but are also paying the credit card company 3% on that $107 Raising the tax to 8% will increase what we owe the credit card company without seeing a benefit of it. Please take another look at everything. We hope the town can find another avenue to pull the money they need to continue maintaining this beautiful community. Perhaps those with second homes or Airbnb's can contribute to the effort. The policy feels anti business and adding this tax would only discourage people from visiting at a time when gas prices are rising and we're already seeing the negative impacts on planned summer travel. Everything is expensive in the world right now. Let's do what we can to keep Vermont accessible to people who want to come up here and spend some time in the mountains. Thank you, Megan and Dave Ocalita.

[Rep. Matthew Birong (Chair)]: No, thank you so much. Having been a mainstream merchant myself for seventeen years, I totally understand all the words you're using there. So thank you. Any questions from the committee? Waters Evans?

[Rep. Chea Waters Evans (Ranking Member)]: What have your conversations been with other, folks who are in your position as far as, like, owning retail stores and relying a lot on tourists for?

[Megan Okalita (Northwood Gallery co-owner)]: Yeah, we work with really tight margins. So anytime we lose a sale or have a disgruntled customer leave, it's definitely not the lasting impression we wanna leave with customers. And the couple shop owners that I've spoken with definitely feel the same. It's something we can't take back once we do it. So I just want to make sure that all other options have been exhausted before going down that path.

[Rep. Chea Waters Evans (Ranking Member)]: Thank you.

[Rep. Matthew Birong (Chair)]: Any other questions? All right. Thank you so much and enjoy your travels.

[Nancy Teed (owner, Once Upon a Time Toys)]: Thank you all.

[Rep. Matthew Birong (Chair)]: Yeah. Up next, got Nancy Teague, co owner of Once Upon a Time Toys. How you doing, You're muted. Oh, muted. Muted. Yep.

[Nancy Teed (owner, Once Upon a Time Toys)]: Unmute. Does that work?

[Rep. Matthew Birong (Chair)]: There we go. We got you.

[Nancy Teed (owner, Once Upon a Time Toys)]: Okay. Well, not sunny here. Vermont is the state. We only have four seasons in one day, so we're now used to that. Kind of comes with the territory. Again, I'm Nancy Teed. I own Once Upon a Time Toys in Stowe, Vermont. I'm here to oppose the increase in the local option tax, and I'm going to do it on two levels: one from a store owner personal perspective and another because I've studied these type of things for many years, and I'm going to speak to the first point first second point first, if that makes sense. I was a research analyst for over twenty five years, a senior analyst for much of that, and it was my job specifically to look at the effects and the impacts of government programs on local economies and national economies. And it's from that perspective that I'm opposed. I handed out a couple of tables, which I think you probably have in front of you, that shows sales taxes in neighboring states. And if you see there, Vermont and Rhode Island are presently tied at 7% for the highest sales tax in all of New England. Increasing the local option tax in Stowe by even 1% means that Stowe will be higher than any other state in New England. That wouldn't be such a big deal if Vermont was the richest state in New England, but if you look at the second table, you'll look at per capita income, and Vermont ranks eighteenth. Not the poorest, but certainly not the richest, and not a state that I think eagerly wants to increase its sales tax. And finally, this is not in a table, but those who study these things, and I'm sure as you folks know as well, there are many ways to tax a community. One of the most regressive is the sales tax, which means sales tax hit lower and moderate income people more than they do rich people, and therefore it will hit our customers as well. Increasing the local option tax will also have a ripple effect. It will mean that money spent on taxes is money that cannot be spent on other things. It can't be spent on food, clothing, utilities, and perhaps fewer toys if they're spending money on taxes. Second, customers, our customers, others can turn to nearby communities like Waterbury and Mooresville and find similar projects. And again, I'm not a high end gallery. I'm a toy store. You want a kite? You can get it in Waterbury. You can get it in Morrisville, and you can certainly get it online. And online has become more and more the competition for local small retail businesses and for retail in general. The higher the sales tax, the higher the taxes, the more people turn to the internet and to Amazon, which is our true competitor. Anyway, that's enough of a cut. I'll take off my hat and put on my store owner hat once again. Once Upon a Time Toys is an old store. It's not the oldest store in Stowe, but we've been around a long time, forty nine years as of this year. I've owned it for twenty years, so I do have some experience in the retail trade, and I can vouch for the fact that people do notice, People have argued for years that, well, Stowe is rich, our customers are rich, no one will notice an increase in the sale tax, and if they did, they wouldn't even care. Well, I'm here to argue against both of those points. Yes, Stowe is a rich town, and we do have rich tourists, but we have everybody. Everybody comes here. There are those who live here. These are the nurses and the teachers and the school teachers and the people who kind of fix your lawnmower when it's broken. These are not rich people, but they come to Stone nonetheless, and they certainly come to my store, and they notice. They say, Gee, your sales taxes are high, or they come from New Hampshire and they say, Well, we don't have sales taxes at all. And those of you sitting here know, as do I, that even though you don't have sales tax, you're still going to have to pay for services. You're going to have to pay for everything, and you will get taxed one way or another. The average person doesn't necessarily know that, they just know when they come to the cash register that they're paying higher taxes and I tell you they don't like it. Also, if I look at the toy store, it isn't just a carriage trade business. We sell to everybody. Everybody comes here. And I particularly notice that many people come here, not only who are visitors, come here not only for a week or a month, some will come for a day. And I have noticed, especially over the past year, that I'm getting more people who are coming for the day. They come in early, they spend the day, and then they go home. They're not necessarily spending the night, and they're not spending the night because money is tight, and they are very aware of it. One of those measurements that I've looked at over the years is how many people pay with credit cards and how many pay with cash. And one of the things I've noticed, when things are tight, people pay more in cash. I've even seen many of my customers take out an envelope of cash and count out the money they have set aside for this vacation. That means they're not as free and easy with their money as we might like them to be. But the more cash purchases, the fewer credit card purchases, the lower the purchase price overall. And part of that money going to taxes is not something that they like by any stretch of the imagination. Finally, I would note that this has been the last couple of years. The economy hasn't been great, and for all intents and purposes, it doesn't look like it's going to be great for a while. Tariffs have hit all of us, and we're all kind of reeling from that. But Vermont, just like Minnesota and Montana and the other states on the Northern tier, have been hit particularly hard because Canadians are not coming in as great in numbers as they used to be. The numbers are down. I have customers who have been coming to my store forever. They have become friends. Some of them are still coming, and they say, Well, we know what's going on, but we love you guys, and we're going to come anyway. And that's great, but I know that many of my customers who I do know just haven't come this year. I suspect the same is true from Europeans and those around the world who have chosen not to come to The United States, not because they don't like Vermont, but because they're just nervous about doing so. So if tourism drops, obviously our sales will drop. Vermonters are great. I mean, Vermonters are wonderful. I absolutely love it here. And Vermonters tend to be frugal folk. But I think that asking them to pay more in taxes at a time when things do not look good, and for all intents and purposes, the economy, most economists say that it doesn't look like it's going to be good for a while. Asking more money at this time, I think is maybe asking perhaps too much. So in conclusion, I would just say I'm opposed to the local option tax increase for two reasons mostly. One is because it is a regressive tax that will affect our low and moderate income people more than those who have more money, and I don't like the idea of Stowe having the highest taxes in all of Vermont. And the second one is it's going to hurt businesses. I'm very selfishly noting people will buy less, they'll buy fewer toys, they're going to turn to businesses in other towns other than Stowe when they can do so, And they will continue more and more to do what they've already done, which is turn to the internet and to Amazon. This will certainly have a negative impact on my toy store because I want them to buy toys only from me. Thank you so much for letting me speak and giving me this opportunity.

[Rep. Matthew Birong (Chair)]: Yeah, thank you very much, Nancy. Any questions for this particular witness? Feel free to hang out in case something does pop up, but thank you very much.

[Megan Okalita (Northwood Gallery co-owner)]: Thank you so much

[Nancy Teed (owner, Once Upon a Time Toys)]: for giving me the chance to be here. I appreciate it.

[Rep. Matthew Birong (Chair)]: No, We really appreciate your time. Alright. And now we have Kimberly, owner, Tangerine and Olive. How are you Kimberly?

[Kimberly (owner, Tangerine & Olive)]: Hi, okay, forgive me, I've lost my voice. I'm kind of cold. Can you hear me okay?

[Rep. Matthew Birong (Chair)]: Yeah, we can and I'm I can in the same boat as you this morning, so.

[Kimberly (owner, Tangerine & Olive)]: I'm going to sip on my hot beverage because it's helping my vocal cords, so forgive me. My name is Kimberly. I've owned Tangerine and Olive, a shop that I run myself for I'm in my tenth year here. It's an artisan dish shop so it's not mass produced items, everything is handcrafted or small batch between American makers and Canadian makers. I oppose the local option tax also. I agree with everything that my fellow shop owners, Megan and Nancy, have said. I have a couple of things here. I've never done this. I'm a little nervous, so please forgive me. The people who are supporting this bill say that the town of Stowe voted on this during a town meeting, but I got the numbers from an article through the Stowe Reporter, our local newspaper, and it appears that for the retail tax that seven seventy seven people voted And then for the food and beverage or the rooms and meals, seven seventy eight were at town meeting and voted. The 2020 census says that there's 5,223 people living in Stowe. So I don't believe that's a you know, I don't believe half not even half the town, not even a portion of the town, small portion of the town voted on that. So I don't think the whole town was aware or even agrees with this. I think it's a slap in the face for small businesses, I really do. Like Megan says, transaction fees cut into our profits, which are not high. I mean, I'm not a high grossing shop. And I'm already suffering with higher shipping costs and overhead costs, and I don't charge a service fee for people using a credit card. That's a popular thing. I know a lot of restaurants and coffee shops do that. I mean I get charged just using my debit card when I go to those places. So I'm not passing on, I don't raise my prices to pass on. Don't sell anything over $100 and I know that Stowe is considered a rich town, but not everybody that comes visits to Stowe is a millionaire. My customer base is middle class. Gas prices are skyrocketing, which adds a cost to everybody. You know, our visitors are getting taxed in feed before they even walk into our shops. When they they got a high tax base on their rooms and their meals, which are things that they need when visiting long before they walk into our shops. And the occupancy rates. Stowe Area Association, if you're a part of it like I am, they send us a weekly survey of the occupancy rates for twelve to thirteen weeks ahead, roughly. And they just dropped an email yesterday with the rates and we're down over last year at this time. So at this time last year, the for the summer seasons for June and July and August, we were at a higher percentage rate. We're down. We're down. I have it somewhere. We're down forgive me. I'm not yeah. We're we're down like

[Rep. Matthew Birong (Chair)]: Take your time.

[Kimberly (owner, Tangerine & Olive)]: They do it by week, so like a Sunday through Saturday. So for June 7, we're down 31% over this time last year for that week. June 14, we're down 28%. We're down across the board all summer long. And not to say that those can't go up, but it just it shows you that people, our visitors, which this town thrives on. We we build ourselves as a tourist town and we all, you know, tourists are our bread and butter. It just shows you that people are really considering how they're going to vacation this summer with the high gas prices. I mean, Brent oil was what? At a $1.24 yesterday and US oil prices are over a 100 right now. They're just they're reconsidering how they're going to travel. I I don't think people are gonna travel very far. I have people I always ask my customers where they're visiting from. I have people from all over the country visiting. I mean, all over the country. They visit Stowe. I just don't think people from the South or or maybe from out West who like to get in a car and road trip are going to come all the way to Stowe. I think with the high gas prices, which do not seem to be going down, and in fact I've heard between three and six months, which I don't believe, possibly not coming down until next year. The latest data I looked up this morning. I just think that people are really considering where they're going. The cost of groceries is high and inflation is high. I I heard talk of recession yesterday, I don't know. I just think that we need to consider the people who literally support this town, which is our visitors. And our local people too. I'm just two buildings down from the West Branch apartments, which is senior it's apartments for 50 or seniors. People, most of those people are on a fixed income. They don't all drive. I literally can watch them walk down Mountain Road to go to the village to go shopping. They have the carts. You got to consider them too because they're not the elite rich people of Stowe. It breaks my heart when I see them walking by and I know they're getting less groceries or products that they need because the prices are just skyrocketing. So to close, I just don't think we should put this burden on us or especially the tourists that come here. I believe Stone needs to figure out their finances without putting the burden on the people who literally make this town what it is. Are visitors coming from all over the world. Maybe they should look into Airbnb's. I I believe upwards to half of the housing here is Airbnb's. Maybe tax those. I know Florida actually has an Airbnb tax because I just talked to a friend in Florida yesterday. She has an Airbnb and she gets taxed pretty high to have an Airbnb. So just I I just oppose to this on so many levels. Thank you for your time. I appreciate you letting me testify, and thank you to Nancy and Megan for also testifying about this. Appreciate it.

[Rep. Matthew Birong (Chair)]: No, no, thank you. And I mean, you're very direct. I completely appreciate that. I mentioned earlier that I owned a restaurant cafe for seventeen years on a main street in a tourist town in Vermont. So I completely understand the perspective that you're all laying out here. So, I guess that's my the duality of my commentary. Do we have anything else, questions or comments from the table while we have our guests in front of us?

[Rep. Chea Waters Evans (Ranking Member)]: You did a great job.

[Rep. Matthew Birong (Chair)]: Hope you get your voice back. Yeah.

[Kimberly (owner, Tangerine & Olive)]: Thank you. I just went out yesterday. I've been sick with a cold and I was like, you know, it just when it rains, it pours. No.

[Rep. Matthew Birong (Chair)]: You did great. No. Thank you very much. And and if anything else comes up that you wanna share with us, please feel free. If you have any other colleagues, friends or associates within the merchant community who want to weigh in on this, you know how to get a hold of us. Please send them our way. And with that committee, I guess that's a wrap for the morning. We have a bunch of moving pieces on the floor today. So, and then some work on the cannabis bill afterwards. So, with that, we're going to break for lunch and prepare for the floor. Thank you again, everyone from STOW and, Nick.