Vermont’s public access television stations have a problem. As more and more people cancel their cable TV subscriptions in favor of online services — a practice known as “cutting the cord” — the local entities are losing out on badly needed revenue.
That’s because the state’s two dozen such stations get about 90% of their annual funding from cable companies. The cable providers are required, as part of their state permits, to set aside 5% of their revenue in the state for community programming.
One public access station — Town Meeting TV, which serves Chittenden County — has seen about a 20% drop in its revenue from cable since 2016, Lauren-Glenn Davitian, the station’s public policy director, testified to Senate lawmakers earlier this month.
“We’re seeking a level playing field,” Davatian told members of the Senate Finance Committee. “The trends are clear … the funding for community media is declining.”
These concerns have found an ear in the Legislature. The Senate advanced a bill on Thursday that would bolster local stations’ funding with a tax levied on the operating revenue that major online streaming companies make from users in Vermont.
S.181 has prompted opposition in Montpelier from those very companies. A lobbyist representing Netflix testified before the Senate Finance Committee earlier this month, and the Streaming Innovation Alliance — a national group that represents many large media companies including Disney and Paramount — submitted written testimony.
The state would take 5% of the annual gross receipts of services such as Netflix, Disney+ and Apple TV+, with some exemptions, such as advertising revenue. Local access stations would continue to get funding from cable providers, too.
Companies would have to pay the tax on April 15 each year and revenue would be deposited in the state’s general fund. From there, lawmakers would allocate a certain amount of the revenue to public access stations via the secretary of state’s office.
The exact amount appropriated to the public access stations would be up to future lawmakers to decide after consulting with them, said Sen. Thomas Chittenden, D-Chittenden Southeast, who presented the bill on the floor Thursday.
Chittenden said that any tax revenue not appropriated to the public access stations would remain in the general fund, where it could be used for other state expenses.
Sen. Jane Kitchel, D-Caledonia, noted on the floor that lawmakers have appropriated $1 million in one-time funding in recent years to help buoy public access stations statewide. But the new assessment could bring in far more than that — between $6 million and $8 million in the 2025 fiscal year, according to the Legislature’s Joint Fiscal Office.
S.181’s sponsor, Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, said in an interview the new funding would provide more stable support for networks that provide important — and sometimes the only — coverage of local politics and community events.
Baruth added that while concerns about funding for public access TV have been known for years, heightened worries about the state’s overall finances — and about finding additional sources of revenue — have likely given the legislation a boost this year.
S.181 appeared to get unanimous approval from Baruth’s colleagues on Thursday, and it is now slated for final approval on Friday. After that, it would head to the House for further consideration.
In a letter submitted to legislators in late February, the Streaming Innovation Alliance suggested that its members would pass on the costs of paying the new tax to Vermont consumers. The group added that the tax would “be especially harmful” by placing a burden on streaming services that produce content focused on “elevating new voices and telling relevant stories to historically underserved communities.”
“We oppose any regressive new taxes or fees that single out streaming video services and the Vermont consumers who value and use them,” the letter states.
Asked about the lobbyists’ concerns, Baruth said he did not think streaming services would actually increase the costs of subscriptions for Vermonters, because there are so many different streaming options that the services need to stay competitively priced.
“Which is more important to them — having a lower price point, or picking up the couple of million dollars in additional costs that they’re going to accrue?” he said.