Vermont Legislature SmartTranscripts:

[Chair Emilie Kornheiser]: Good morning, ways and means. There is a date that I am unaware of. May 1. Happy May Day.

[Unidentified Committee Member (Ways and Means)]: Yes.

[Chair Emilie Kornheiser]: And it's 9AM ish, and we are gonna take a look at the two last bills on our wall. Though we might not have time to do much with them, it's good to hear about them in order to prepare for next biennium. And so with that, Karen, would you like to join us?

[Rep. Karen Leaders]: Thank you. You mean to say you got all the bills off your wall? No, we've spent

[Chair Emilie Kornheiser]: a moment on each of them.

[Rep. Karen Leaders]: Good morning, everyone. Good morning, Ways and Means Committee people. I'm exhausted from my commute across the hall, but I'll try to bear up. Representative Karen Leaders, Addison Floor, Lincoln, Bristol, Starksboro, Moncton. And back in the fall, when I was first appointed and sworn in, way before that, actually, with a group of other citizens. I became concerned about the sweeping federal tax bill that passed over the summer, and that

[Rep. Mike Rice]: gave

[Rep. Karen Leaders]: the wealthiest folks a huge tax break, folks that were already doing quite well, and that it didn't seem right that the tax was generally done so on the backs of necessary programs like SNAP, Section eight, fuel assistance, Medicaid, and the like, impacting those with the least financial resources and least political power. To compound the affordability crisis, there's a great housing need in Vermont, and we now know that some of the drivers can be attributed to the substantial number of second homes in Vermont, and I generally estimate to be about 40% of our single family housing stock. And we know that Vermont has a lot of older housing stock often owned by folks without a lot of extra cash with which to affect some weatherization. So soon after I was sworn in, in October, I met with folks at Legislative Council and put in requests for a number of bills addressing some of these issues. H44 is one of these. This was the time of the government shutdown and the decision of the emergency board to fund SNAP for a period of time and to fully fund LIHEAP for the heating season. The thought was that if residential property is not a principal residence, this is the thought of the legislation, why should it enjoy fuel tax relief? And if weatherization is generally available to folks who can afford to pay for it, why not direct this additional revenue for weatherization to folks who cannot afford it? This would help those principal residents homeowners with affordability. And thinking of some of the recent developments and the huge increase in fuel costs, save Vermont, those LIHEAP dollars. I know and appreciate deeply that this committee has been working diligently on similar tax classifications for education funding purposes. I've consulted with Kirby, who is not this person, he tells me that this bill does not affect the classifications you've come up with. And so anyways, the bill has two components. First component is that folks that have a second home or short term rental would not enjoy the exemption from sales and use. And I think this additional revenue would go into the general fund and perhaps be attributed somewhat to education funding. And then the second part is that there would be a 3% surcharge on these properties in this revenue would go into a specific fund for home weatherization assistance with the goal of providing access to weatherization for homes for folks that could really benefit from the weatherization but couldn't afford. So that's it.

[Unidentified Committee Member (Ways and Means)]: Thank you. How would the sales and use exemption work? What do you propose exactly?

[Rep. Karen Leaders]: Well, so right now, if you, representative, if you owned a business and you owned a home and you had, you know, number two fuel delivered to you

[Rep. Mike Rice]: Okay.

[Rep. Karen Leaders]: You would pay a higher tax on your business. You'd pay a sales and use tax on your business, but at your home, you wouldn't. And so it's sort of an exemption in a way because it's your home.

[Unidentified Committee Member (Ways and Means)]: Gotcha.

[Rep. Karen Leaders]: And this is just saying if it's a second home, not your principal residence, if it's a business, a short term rental business, then maybe you shouldn't get that exemption. So that's the theory. All.

[Unidentified Committee Member (Ways and Means)]: Okay, and then you and the fuel dealer, me and the fuel dealer work out the classification so they get it right?

[Rep. Karen Leaders]: Yes.

[Unidentified Committee Member (Ways and Means)]: Okay, Thank you.

[Rep. Karen Leaders]: And I think that could maybe dovetail with some work with the tax department in delineating these categories. There's probably some work to do there to really identify those two categories.

[Rep. Mike Rice]: Thank you. Yeah. Yep.

[Chair Emilie Kornheiser]: I actually don't know how the exemption we haven't taken testimony in a long time on that, so I don't even know how the existing

[Rep. Mike Rice]: exemption is functionally functions.

[Rep. Karen Leaders]: Yeah, there are some things that are Twice in a row. Yeah.

[Unidentified Committee Member (Ways and Means)]: I was just wondering how, Karen, representative figures don't mind, how you

[Rep. Karen Leaders]: Not the issue, what? Sorry.

[Unidentified Committee Member (Ways and Means)]: Sorry, representative figures. How you would envision how the fuel dealers would differentiate homes that are primary versus secondary?

[Rep. Karen Leaders]: Yeah, I mean, that is of course one of the things I discussed with my legislative council, certainly something that would have to be sorted out. But I think this committee is already doing some good work with that, with the delineating for education, taxation purposes, non homestead, those kinds of categories. So the work is not yet complete, but the theory is that you would be able to, with the tax department, identify those properties. Because if you pay your property taxes, you're homestead or non homestead. So there's already some information started on that subject. Do you have a sense of how much revenue this could possibly bring in for our modernization? That is a great question. I was expecting this bill to come off the wall, quite frankly. And I certainly ask Joint Fiscal, I have a message into them, and I could get back to you with some of that information. But this is unexpected surprise. Thank

[Chair Emilie Kornheiser]: you so much for bringing this to us. Really Thank appreciate

[Rep. Karen Leaders]: you. Thank you for having me this morning.

[Rep. Mike Rice]: Absolutely glad to have you here.

[Chair Emilie Kornheiser]: Representative Rutland, do want to join us? Thanks.

[Rep. Mike Rice]: Like, Big Wheel of Cheese Day. Wing episode of Big Wheel of Cheese Day or whatever that I don't remember it on any

[Chair Emilie Kornheiser]: of that. I wasn't watching it

[Rep. Mike Rice]: on the weekend.

[Chair Emilie Kornheiser]: Over to Rice.

[Rep. Mike Rice]: So thanks for having me. The genesis of this bill, I think, comes back to when I was a new college grad and a graduate student and had no money. And I was up here. I grew up in Massachusetts, so

[Unidentified Committee Member (Ways and Means)]: I

[Rep. Mike Rice]: think there was one time where my car didn't work on the road because of ice, and I thought it was steering. So no experience in snow tires whatsoever, and didn't have snow tires. I was on I-eighty 9, and there wasn't any real snow. Was just blowing snow and black ice. Anyway, hit a patch of ice and then got spun around many times in my little Jeep Cherokee and hit the guardrail. It was terrifying. And so following that, I had lots of bodywork and was out of a car for three weeks and disrupted by school. And it was a very expensive experience. So I was asking other Vermonters what could have fixed that probably, and people were telling me about snow tires.

[Chair Emilie Kornheiser]: This is a lovely story.

[Rep. Mike Rice]: And especially about studded snow tires, which are like cat's claws on the ice. So anyway, ever since then, I was thinking and then I lived in Montana for a while, too, which it was also similar conditions, that when you have no money and you have to get to work and you have to get to take your kids to school or whatever it is, snow tires are this big expense. And it's hard to make that decision in the short term it seems like this may or may not be an issue. And if you just drive well, maybe you won't get in an accident. So I was thinking maybe one way to help people would be to not make it subject to sales tax, kind of how we do with food and clothing in Vermont. So that's kind of the idea. And then I was talking to someone who knows a lot about tires also. Think it could have benefits to municipalities and transportation costs as well because all those cascading costs increases the cost of insurance when you have an accident, increases the cost of road maintenance. And I know we're all trying to save money in Vermont, too. So I think potentially the transportation public safety costs would be reduced probably by more than the reduction in taxes that we get from exempting snow tires from sales tax.

[Chair Emilie Kornheiser]: So is it sales tax or income tax you're talking?

[Rep. Mike Rice]: Sales tax, I think. I don't actually have the bill in

[Chair Emilie Kornheiser]: front The bill says income tax. Yeah. Interesting. And so I was wondering if you wanted it to be a refundable. I don't have the bill right in front of me. Was wondering if it was refundable.

[Rep. Karen Leaders]: Oh, it's a short form. Oh, love a short form.

[Unidentified Committee Member (Ways and Means)]: Thank

[Chair Emilie Kornheiser]: you. Short forms are such a lovely gift to staff.

[Rep. Mike Rice]: So it seems like it would need to be

[Chair Emilie Kornheiser]: refundable income tax deduction to have the low income impacts that you're looking for. It's an interesting idea. They are incredibly expensive.

[Rep. Mike Rice]: Yeah.

[Chair Emilie Kornheiser]: Anyone else?

[Unidentified Committee Member (Ways and Means)]: Do you know of any I thought there was some kind of snow tire purchase assistance program through the community action agencies. I just don't know for sure. Any idea?

[Rep. Mike Rice]: No, that's cool, though. I guess I always actually love it to be easy for people so they don't because another thing is when, I think, when you're on a tight budget and you're struggling, and paperwork are too. So if it could just be something that happened and I think it being a short form We could do it as well. Exactly. Yeah. There

[Unidentified Committee Member (Ways and Means)]: is a program where I think it's related to the solar waste management, where they collect old winter tires. They actually get them out in the fall when they're supposed to replace our

[Chair Emilie Kornheiser]: Whale worms. Does not make its way down to Windham County, Wales for Worms. I'm gonna go looking into it because Yeah. Yeah.

[Unidentified Committee Member (Ways and Means)]: It's here in Berlin and then Cool. Yep. If that you're moment

[Unidentified Committee Member (Ways and Means)]: where you need tires, like, I need the tires.

[Unidentified Committee Member (Ways and Means)]: So

[Chair Emilie Kornheiser]: the way the income tax works is it's a year. Like right now, we're doing our 2025 income taxes. So this was an income tax deduction.

[Rep. Mike Rice]: They wouldn't get it for another year or more, but Yeah, so maybe I mean, I think it's to hear your thoughts. I think that's a good point. And maybe as I was speaking about it, it might make more sales tax exemption actually to achieve that.

[Chair Emilie Kornheiser]: So just public search, Wheels for Warmth is a fundraiser for the Community Actions. It's not a free tire program. And I know that Reach Up will often buy tires for clients, but that's an as needed basis, and that's low. That's extreme low income for only very certain people and

[Rep. Mike Rice]: not even fully as readily available. Thank you so

[Chair Emilie Kornheiser]: much for bringing this issue to us. I really appreciate it. I know you thought it was going to go to the Transportation Committee, so I appreciate you also joining us. And we'll make sure to tell our colleagues next door about it as well. Thank you. Folks, we are going to go to the floor. My understanding is that it should be fairly short, because it seems like there's not anything per second reading on the calendar. And then we come back. We're going to finish our testimony on the yield bill from yesterday. And I'm going to see if maybe that might give us time to actually do our 01:00 testimony before