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Ways & Means votes to reject North amendment to expand Social Security tax exemption
Summary
On March 27 the Ways & Means discussion turned to Representative Norths amendment to H933 to broaden the state exemption for Social Security income. Committee members cited a roughly $35 million JFO estimate and voted to find the amendment unfavorable; the sponsor said he may pursue further work with JFO.
Representatives on the Ways & Means panel debated and then voted to find unfavorable an amendment to H933 from Representative North that would expand Vermonts state income tax exemption for Social Security benefits.
Representative North opened the discussion, describing the amendment as a continuation of last years changes and saying it would "provide state tax income tax relief on social security benefits up through... it's on the order of $150,000 a year" for joint filers and a somewhat lower threshold for individual filers. He told the committee the measure would take effect Jan. 1, 2027, and that the initial Joint Fiscal Office estimate of the revenue impact was about $35 million.
Members questioned the fiscal trade-offs. One lawmaker asked how the committee would "make up that deficit," and Representative North pointed to measures in recently passed legislation he said could reduce overall care costs over time. He also said, "it maybe even... encourage a few fewer people to become homeless if we let them keep more of their own tax money," a claim that drew skepticism from colleagues who noted the effect on higher-income filers would likely be limited.
Several members said many Social Security recipients had already been made fully exempt by last years changes and that further, sizable tax changes would require more testimony and detailed JFO analysis. A member who described a personal year-to-year income fluctuation said raising the exemption thresholds could "smooth that out," but emphasized that the committee needed the JFO tax-incident study to know who would actually benefit.
Representative Maslin moved that the committee find the amendment unfavorable; a second was recorded during the session. The chair called the vote, and the clerk announced a tally with the phrase "favorable 10" as the result. The motion to find the amendment unfavorable was recorded in the committee minutes as passed.
Representative North said he was "still working on" the amendment with the Joint Fiscal Office to better understand impacts and indicated he might offer another amendment or seek consideration in the Senate after receiving more data. The committee proceeded with other third-reading business.
The vote and accompanying JFO estimate were the principal developments: committee members credited the amendment's aim of broadening relief but declined to advance it without further fiscal analysis and offsets. The committee did not adopt the amendment at this session.
