Research & Publications

Gladdish tidings: Incomes rose, but so did unemployment

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.

Property tax relief for Vermonters: three-part plan

First things first: Vermonters need property tax relief

Policymakers need to focus on the urgent school funding priority: providing our kids with a quality education while delivering property tax relief to middle-class Vermont homeowners. These taxpayers were hit hard this year, experiencing abrupt school tax increases. In three steps, the Legislature can make the system much fairer and simpler for taxpayers, providing needed property tax relief for next year—fiscal 2026—and addressing the longer-term issues of school costs and tax fairness in subsequent years.

New businesses created the lion’s share of jobs in 2023

Vermont added about 1,600 net new jobs during the 12-month period ending March 2024. Almost 70 percent of those jobs came from new businesses.

After a record rise in the wake of the pandemic, the pace of job growth slowed, especially among existing private sector employers, with the biggest decline taking place during the year that ended in March 2024.

Ed Funding 101 (and what happened in FY25)

Vermont has one of the most equitable education funding systems in the country. It hasn’t felt that way lately, because there are pockets of inequities that hit some taxpayers and some districts more than others.

Public Assets’ Executive Director explains the fundamentals of our public education funding system.

Public education is one of the most important things the state does and there is a lot we can do to make the tax system simpler and fairer without losing what’s equitable about it, while ensuring that Vermonters can make good decisions about their schools.

Economic Security 101

What do we need to do to make Vermont affordable for all? Public Assets Director Steph Yu explains: we know Vermont has the resources to make the state affordable for everyone who lives here. Some of the solutions will take time, but there are also some that we can implement right now that will immediately improve family economic security and make sure that Vermont is affordable for all.

Public programs lifted 3,000 Vermont kids out of poverty

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.

Vermont state budget 101

Curious about how the state budget works? Steph reviews the basics of Vermont’s budget including revenues, appropriations, and the so-called spaghetti chart that ties it all together.

Vermont’s median income and workforce both grew

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.

Jared Duval, Head of Energy Action Network, to Receive 2024 Con Hogan Award

The Vermont Community Foundation and the organizing committee for the Con Hogan Award for Creative, Entrepreneurial, Community Leadership are pleased to announce that Jared Duval, executive director of the Montpelier-based Energy Action Network (EAN), will be honored with this year’s award.

EAN brings together more than 200 Vermont-based nonprofits, utilities, businesses, universities, and public sector partners to work toward a common goal: to achieve Vermont’s climate and energy commitments in ways that create a more just, thriving, and sustainable future. The network supports research and data-tracking on energy and emissions, with a focus on evidence-based policy analysis.

There’s more to school tax increases than spending

Vermonters have been understandably upset by the abrupt rise in their school taxes for fiscal 2025. Most of the complaints focus on the rise in spending, as does the response from policymakers. But taxpayers may also be affected by changes that make the funding system less fair.

The Agency of Education presented some clear analyses last spring explaining the main reasons for the spending increase: rises in salaries and benefits in response to inflation; health insurance cost increases exceeding inflation; the expanding need for expensive mental health services for students; the loss of federal funds the schools received as part of the pandemic-related American Rescue Plan Act (ARPA). There are other reasons as well, related to fiscal decisions made in the past few years. The expenditures are critical for providing kids with a quality education. But knowing that doesn’t make the tax bumps easier to take. Even modest increases can be a problem if the costs, and who pays them, are not distributed fairly.

In fact, some districts and taxpayers have been facing disproportionately higher bills for a while.

Education funding: The three cliffs problem

Education spending saw its biggest jump in years in fiscal 2025, and school taxpayers are noticing the change in their bills. The increase this year was due to a lot of factors outside both schools’ and taxpayers’ control—inflation, healthcare costs, and the loss of pandemic-era federal support chief among them. All of that led to an increase in total homestead taxes of 12.9 percent, although the rate varied from town to town.

But taxpayers can see their tax bills suddenly balloon even when spending increases are modest. The reason: thresholds built into the system. A majority of Vermont resident homeowners pay all or some of their school taxes based on their household income, which better reflects their ability to pay. But the Legislature has imposed limits on these income-based taxes, which means some homeowners—and the number has been increasing—pay a combination of the income-based and property-based school taxes. The property taxes kick in when homeowners’ incomes or house values pass certain thresholds. These thresholds create tax “cliffs”—sudden rises in tax owed. Because the thresholds haven’t been increased or adjusted for inflation over time, more and more Vermonters have hit these cliffs and seen a jump in their school tax bills.

Vermont unemployment is falling by all measures, not just the official one

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.

Predicting the unpredictable: budgeting for flooding and climate change

As Vermont recovers from yet another round of flooding and braces for what’s left of Tropical Storm Debby, it may come as no surprise that Vermont is ranked seventh in the nation for the most federal disaster declarations due to extreme weather since 2011.

And some parts are harder hit than others: Washington County is tied for second as the most disaster-prone county in the country, while Lamoille, Chittenden, Orange, Orleans and Essex are all tied for fourth.

Vermont’s average wage masked county disparities

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.

Katrina Menard joins Public Assets as State Policy Fellow

MONTPELIER – Katrina Menard has been selected as the State Policy Fellow for Vermont. The State Policy Fellowship program, sponsored by the Center on Budget and Policy Priorities in Washington D.C., is a research-focused fellowship dedicated to making change through careful research, thoughtful advocacy, and strong partnerships in a state policy context. Menard begins the two-year fellowship position on July 8.

Education funding: Diagnosis before treatment

Whatever Montpelier did this year about education taxes was going to be a can-kicking exercise. By overriding the governor’s veto of the so-called “yield bill,” which sets tax rates for the coming year, the Legislature avoided a protracted fight over how far to kick the can. That bought them some time—about six months. Now, let’s hope, we’ll get a serious effort to understand what’s going on with education funding before plunging ahead with solutions.

In response to the uncharacteristically large increase in school budgets for next year, the Legislature created the ambitiously named Commission on the Future of Public Education in Vermont. It is scheduled to start meeting in July.

More Vermonters are working, and fewer jobs are vacant

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.

2023 Con Hogan Award Winner HB Lozito Speaks about the Award and Its Impact

2023 Con Hogan Award Winner HB Lozito Speaks about the Award and Its Impact
Nominations for the 2024 award close on June 27; the winner to receive $15,000 Cash Prize

HB Lozito was honored with the 2023 Con Hogan Award. Lozito is the executive director of Brattleboro-based Out in the Open, which is working to build a multi-issue, multiracial social justice movement of rural LGBTQ+ people. In a recent interview, they talked about their life and work and what receiving the award meant to them both personally and professionally.

More Vermonters are working than ever before

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 new and “improved” CLA

The 1973 oil embargo prompted many energy-saving ideas—real and imaginary. Daylight savings was extended year-round, which was spoofed in a cartoon of President Richard Nixon demonstrating an energy-saving blanket. He was shown cutting a strip from one end of the blanket and sewing it back on to the other end.

The current plan to reform the notorious CLA—common level of appraisal—looks a lot like Nixon’s blanket. It doesn’t actually change how things work, it just makes them look a little better to the public.

Vermont employment and income are highest ever

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.

Taking a beat on education funding reform

A projected jump in school taxes next year has everyone’s hair on fire in Montpelier. But before taking drastic action, legislators and the administration ought to take the time to assess all of the reforms of recent years to understand what’s really going on.

Nobody is saying that the double-digit increases in education spending and likely tax bills this year are sustainable, including many voters. In a normal year, a handful of school budgets get voted down while 90-95 percent of them pass. This year, a third went down, some more than once. The voters spoke and rejected increases that felt too high.

But does that mean Vermont needs more funding reform? It’s too soon to tell. Let’s look at how we got here.

Julie Lowell to Senate Finance on anti-poverty tax credits

A presentation by Julie Lowell to the Senate Finance Committee on Anti-poverty Tax Credits, April 17, 2024

State of Working Vermont 2023

Big challenges confronted Vermont in 2023. Much of the state was inundated by the second “100-year” flood in a dozen years. Meteorologists recorded 2023 as the hottest year on record. New variants of Covid kept arising, and pandemics are predicted to become more frequent. Problems we faced before Covid are still with us: poverty, food insecurity, shortages of affordable housing and childcare. And the pandemic seems to have made some problems worse, such as inadequate mental health services, especially for children.

Steph Yu to House Ways and Means on State of Working Vermont 2023

A presentation by Steph Yu to the House Ways and Means Committee on the State of Working Vermont 2023, April 4, 2024