Charts & Infographics

Vermont total personal income rose to $43 billion in 2023. Adjusted for inflation, that was an increase of 6 percent over the previous year, the highest among the states.

Personal income, a key economic indicator, includes salary and wages, business income, interest and dividends, government benefits such as Social Security, employer retirement contributions, and other income. It does not include capital gains.

Personal income is an aggregate measure; it doesn’t tell us how individuals are faring. But Vermont also scored well in 2023 on a measure that does. Census data released in September showed a rise in Vermonters’ median household income of 5.4 percent, after adjusting for inflation—also the largest percentage increase in the country. Half of households earn less than median, and half earn more.

• The total state budget was $8.6 billion in FY25
• This was up from $6 billion pre-pandemic
• Federal Covid money hit in FY20-FY23
• Post-pandemic, Vermont has increases in both baseline federal funds due to infrastructure investments and state funds due to increased economic activity

• Vermont is one of the few states where the tax system does not make inequality worse
• The system is mostly progressive but still regressive at the top, meaning the highest-income Vermonters pay a smaller share of their income in taxes than many middle-class Vermonters
• Sales taxes tend to be the most regressive, although Vermont exempts many necessities like food, clothing and prescriptions
• Vermont’s income tax is progressive
• Property taxes tend to be regressive but Vermont’s is progressive at the low end because of income sensitivity in school taxes

• Public education and healthcare are the biggest things the state does, with each accounting for about a third of the budget
• Public education is paid for with mostly state dollars and healthcare is paid for with mostly federal dollars
• Other investments are a mix of state and federal dollars

• The state relies on three main taxes: sales/consumption, income and property
• In Vermont, unlike other states, residential school taxes are a mix of income-based and property-based
• Federal money comes with a specific purpose with some flexibility in how to spend it, while state dollars are a mix of dedicated and general uses

This is the so-called “spaghetti” chart of Vermont’s state budget for FY25. It shows the big picture of the state’s revenues and how they are spent.

New Census data offer proof that federal and state governments can significantly reduce child poverty. Almost 9 percent of Vermont’s kids lived in poverty, according to the three-year average of the federal official poverty measure for 2021-2023. However, the Supplemental Poverty Measure (SPM)—which factors in state and federal government programs such as universal school meals, food and utility assistance, and the child tax credit—came in 3 percentage points lower, at less than 6 percent for the same period. The difference in poverty rates was evident across New England, where anti-poverty programs are generally strong. In Vermont, the 3-percentage-point difference between the two measures accounted for roughly 3,000 children.

Vermont median household income rose to $81,211 last year—a 5.4 percent increase, after adjusting for inflation. Half of Vermont’s 280,000 households earn less than the median and half earn more. The rebound followed a drop in real income—that is, a loss of buying power after adjusting for inflation—in 2022.

The one-year increase led the other states. Vermont also saw growth of 7.8 percent in median household income from 2019, before the pandemic, through last year—the nation’s greatest rise during that period.

Adjusted for inflation, education spending was flat from fiscal 2005 to fiscal 2024, according to the Legislature’s joint fiscal office. And while the number of students (long-term average daily membership) has declined over that period, again after adjusting for inflation, the average annual increase in per-pupil spending was less than 1 percent per year.

There are also inequities in who pays school taxes. Vermont’s funding system gives resident homeowners the option to pay school taxes based on their income or the value of their homes. Built into the system are thresholds on income and home values that require some low- and moderate-income people to pay both a school income tax and property taxes on a portion of their home’s value.

The thresholds create tax “cliffs,” where an extra dollar of income or a property reappraisal can have disproportional tax consequences. The thresholds have not been raised or adjusted for inflation in years. And because incomes and property values have grown, more and more Vermonters are hitting these cliffs. Homeowners who cross the $47,000 income threshold can see a school tax increase of 10, 15, 25 percent or more. A family with a $350,000 home that crosses the $90,000 income threshold could see a 70 percent jump in school taxes.

Data source: 32 V.S.A. § 6066

Mental health providers and services are unevenly available around the state. That means some schools have to hire their own specialists at higher costs than districts that can contract with local providers. And the demand for mental health positions has more than quadrupled in the last three years, compounding the impact.

Data source: Vermont Agency of Education

Vermont’s official jobless rate hit record lows last year as the state continued to recover from the pandemic. That is also true for the broadest measure of unemployment, called U-6, which counts people who have dropped out of the labor force and those who are underemployed. U-6 averaged 3.9 percent for 2023, Vermont’s lowest in 20 years, tying with South Dakota for the lowest rate in the country.

The unemployment rates reported every month count only people who are out of work and actively looking for a job. But there are others who would like to work but have stopped looking, as well as part-time workers who would like more hours. These underemployed workers make up the bulk of people not captured in the official jobless rates.

Vermont’s labor force—those working and those available for work—grew during the first six months of 2024. Growth in June marked 44 months of gains and brought the total labor force up to 357,568 people, a level not seen since 2011.

Vermont’s average annual wage rose 3.7 percent in 2023, to nearly $62,000. But the wage in 12 of the state’s 14 counties came in below that average. Chittenden County, which held a third of the state’s jobs, showed the highest average annual wage: $70,269. Washington County, another large employment hub, was second, at $64,682. A little over 44 percent of Vermont‘s jobs were in either Chittenden or Washington County, so wages there had a big effect on the state average. The lowest average annual wage in a single county lagged far behind the state average: $47,479 in Essex County—though the county made little impact on average wages because it had the state’s smallest share of jobs. No county in Vermont met the national average of roughly $72,000.

Vermont employers have been steadily filling unfilled jobs. It’s been a challenge because of Vermont’s low unemployment rate. At times, there were as many as three job openings for each person looking for work.

Nevertheless, employers have succeeded in finding workers to fill the vacancies. In January 2023, employers had just over 332,000 nonfarm payroll jobs, 7 percent of them unfilled. In April of this year, there were almost 330,000 nonfarm jobs, and the share that were unfilled had dropped to 4.5 percent.

Vermont was among three states with the biggest drop in the job opening rate from March to April—nearly a full percentage point. The state showed the lowest percentage of unfilled jobs in New England in April. Nationally, the job opening rate was 4.8 percent that month.

Vermont had 3,900 fewer jobs in 2023 than before the pandemic in 2019. But according to newly released data from the Vermont Department of Labor, the losses have not been evenly distributed. In fact, five Vermont counties showed net gains from 2019 to 2023, while the other nine saw net losses. Between 2022 and 2023, all Vermont counties saw job growth, ranging from 23 jobs in Essex County to 1,791 in Chittenden County. The state gained 5,500 jobs that year.

The data also show that Essex County had the lowest average wage in 2023, at $47,479, and Chittenden County the highest, $70,269. The Vermont Department of Labor defines the average annual wage as total annual wages divided by average monthly jobs.

The CLA is misunderstood to begin with. It affects school tax rates at the town level, but not school tax bills. The CLA is part of the process to ensure fairness in the property tax system. For taxes to be fair, property needs to be evaluated against a uniform standard—a “common level of appraisal.” Townwide reappraisals of individual property are expensive, so they are done periodically. But each year the state determines the aggregate fair market value of each town. Based on those values, the Legislature determines the tax rates—known as “equalized tax rates”—that will generate the revenue needed to help fund public education.

Vermont personal income grew by 5.5 percent in 2023—to $43 billion total—the fastest growth in New England and slightly faster than the U.S. as a whole. The major components—earnings, dividends, interest, rent, and transfer payments—all increased, with transfer payments seeing the strongest growth. Transfers include Social Security, unemployment, medical (including Medicaid and Medicare), and other income from government sources. Personal income does not include capital gains.

Vermont saw more than a 20 percent increase in the number of workers represented by unions in 2023. Union representation—meaning both union members and nonmembers covered by union contracts—rose to 46,000 in 2023 from 38,000 the previous year, the biggest increase in at least a decade.

From 2018 through 2023, the share of Vermont workers covered by union contracts rose to 15.4 percent from 11.6 percent. That moved Vermont into seventh place among the states, by percentage of coverage. Hawaii leads the country, with more than a quarter of workers represented, while the U.S. as a whole comes in at 11.2 percent, about 16 million workers.

The number of Vermonters working increased again in January, just beating the number in January 2020, before the pandemic lockdown began. That makes the 45th consecutive month that employment has risen. The streak, starting in May 2020, is the longest in decades. The number of Vermonters looking for work also ticked up, even as the unemployment rate held steady at 2.3 percent, the third lowest in the country.

Total nonfarm payroll jobs increased by 2,000 in January, topping 311,500 for the first time since March 2020. But the mix of jobs has changed. Jobs in the Professional and Business Services sector have increased by nearly 4,000. Meanwhile, the numbers in the Private Education and Health Services and Leisure and Hospitality sectors remain below their January 2020 levels—falling about 2,700 and 2,300 short, respectively.

Progressive tax systems impose higher rates on those with more income and lower rates on those with less income. Regressive systems tax the poor more heavily than the rich. Vermont has adopted various mechanisms to make its systems more progressive: an income tax with higher rates on higher income; sales tax exemptions on necessities that take a bigger bite of smaller earnings, such as food and medicine; and school taxes based not on property value but on income, which better conforms with ability to pay.

Employers create and eliminate thousands of jobs every year. When the Vermont Department of Labor reports the monthly or annual change in jobs, that is the net number: total jobs added minus total jobs lost. Net job growth is an important indicator, but the gross numbers provide additional insight into the pace at which employers create jobs; the source of new jobs, whether existing businesses or startups; and the number of jobs lost as a result of business closures.

State and local taxes comprise all taxes levied by Vermont’s state and local government entities to fund public investments.

Personal income is a major economic indicator. It includes total income received by persons living in Vermont from all sources except capital gains.