Are Vermont’s education funding and housing crises because the state does not tax at a high enough level, even the top marginal rate? Or does Vermont have these crises because we haven’t allowed for growth? Vermont isn’t good at growth in the economic context, yet it is good at it in the spending context. Every conversation legislators are struggling with is about excessive growth or a lack of growth. 

• We’ve had extreme growth in education, healthcare, and spending, in general, has been excessive and has led the country.

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• At the same time, we’ve seen relatively no growth, and at times negative growth, in Vermont’s economy, grand list, and population.

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• Housing stock – between 2000 and 2010, the number of homes in Vermont increased at an average annual pace of around 1% and then slowed after the 2008 recession even to have negative growth some years.

• Vermont’s GDP grew on average 1.24% between 2004 and 2021, with years of contraction. This is far below the national average.

• Meanwhile, many oversimplified the situation and blamed mostly employers for the growing affordability crisis, citing wage growth. A 2020 article from the Economist perfectly encapsulates this, highlighting, “Yet it’s wrong to blame Vermont’s wage woes on policy alone. The state has raised its minimum wage by 36% since 2009.”

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• The Takeaway: Growth in spending without growth in our economy is not sustainable.

With that in mind, in this week’s update:

• What to do about Vermont’s unsustainable education system
• Senate committee slams on the breaks, waits for the House on Housing 
• Ways and Means Committee seeks to tax resourced Vermonters 
• Short-term rental regulation is the topic de jour 
• PFAS legislation debated in Senate Committee 
• The Laundry List