“We can’t help you.” 

That’s what regulators often have to say when people complain about getting shoddy construction in an expensive home improvement project, said Lauren Hibbert, deputy secretary of state, whose office oversees professional regulation in Vermont. 

“And that’s very unsatisfying to homeowners,” Hibbert told the Senate Natural Resources and Energy Committee on Thursday. The only real alternative is to take their contractor to court, she said. 

That limitation stems from the fact that contractors in the state aren’t required to be licensed, Hibbert said. Instead, contractors are merely required to be registered if they’re entering into a contract worth $10,000 or more with a homeowner. 

To get registered with the state, contractors pay a fee, provide proof of insurance and have to disclose any criminal records. A licensure requirement could set a higher bar, requiring contractors to have a certain level of education and training. 

And if contractors were licensed, it could give the state more control over enforcing a professional standard, potentially offering more remedies for people who feel they’ve been wronged, Hibbert said. 

A bill the committee is considering, H.718, doesn’t go so far as to require contractors to be licensed. Instead, it creates a task force to improve the state’s contractor registry. 

The state has a total of 1,400 registered residential contractors, including individuals and businesses, Hibbert said. But she thinks that number is very low and that despite the requirement, many contractors are not registered. 

The Vermont Office of Professional Regulation generates its money from registration and licensure fees, according to Jennifer Colin, director of the office. But the contractor registration hasn’t generated enough revenue, meaning the office doesn’t have the money to do more outreach and get more contractors to register, Colin said. 

The task force proposed by the bill would, among other measures, seek to address those issues with the registry, Colin explained. 

The bill was hotly debated on the House floor before lawmakers there passed it last month. Some representatives said they were concerned the registry was difficult for contractors to navigate and created barriers into the profession. 

In 2022, Gov. Phil Scott vetoed a bill that sought to create a registry for all contractors in the state, saying he didn’t think the registry was needed. Scott cited concerns that the bill would harm small-scale operations. Lawmakers compromised with the governor following his veto and amended the bill to set the current $10,000 contract threshold for registry. 

On Thursday, the committee’s chair, Sen. Anne Watson, D/P-Washington, said the committee would continue hearing expert input on this year’s bill. 

In the know

The House Ways and Means Committee heard sharply divided testimony Thursday morning on a bill that would increase taxes on some wealthier Vermonters’ investment income and create a new top tax bracket for the highest 1% of earners.

Stephanie Yu, who leads the policy research nonprofit Public Assets Institute, expressed strong support for the bill. She told lawmakers that income inequality has increased steadily in Vermont over the last century, leaving many without the ability to meet basic needs. The state’s top tax rate has decreased substantially in the last 60 years, she added, from a height of roughly 20% in the late 1960s to the current rate of 8.75%.

“Vermont’s tax system, while it’s better than many other states, is still regressive at the top,” Yu said.

Amy Spear, president of the Vermont Chamber of Commerce, told lawmakers the bill would likely have “hidden economic consequences.” A new tax on capital gains, she said, would make selling a company in preparation for retirement and passing ownership along more costly for the state’s business owners. And the proposed top-level income tax hike “reaches deeply into active business income,” Spear said, since smaller businesses’ earnings often count as taxable income for owners.

Andrew Wilford, director of state tax policy at the National Taxpayers Union Foundation, raised broader concerns, saying the change would make Vermont less competitive with neighboring states and could drive tax-related outmigration. 

“Targeting investment with high tax rates is a problem for Vermont’s tax base in the future,” he said.

“It’s difficult for the committee when we hear one thing and then hear completely opposite testimony,” said Rep. Carolyn Branagan, R-Georgia. “We have to dig in and look what the facts are.”

— Theo Wells-Spackman

On the move — slowly

Debate over H.955, the House’s sweeping education reform bill, continued through the afternoon Thursday as lawmakers debated a number of amendments to the legislation.

Two amendments would have set additional parameters around a school district’s ability to close a school and would have required voter approval to close a school. Those amendments failed.

Another amendment that failed would have suspended the state’s excess spending threshold, which financially penalizes districts for spending above certain amounts, for fiscal years 2028 and 2029.

Yet another, which lawmakers continued to debate at around 5 p.m. Thursday, would have required all approved independent schools to follow the same education quality standards set for the state’s public schools. That amendment failed via a roll call.

It was unclear when the bill would come to a full vote. Lawmakers will need to approve the bill twice before advancing it to the Senate. The House had not yet voted on the bill before this newsletter’s deadline.

Check back tomorrow for the full story.

— Corey McDonald