Research & Publications

Rainy days are beginning; Vermont should prepare for federal cuts

The federal government is making massive cuts to government functions that Americans—and Vermonters—count on and is planning to make more cuts. Layoffs of federal workers, funding freezes, tariffs, and cuts to government programs, including public benefits for those most in need, could threaten the well-being of Vermont’s people and its economy.

While we may not know the scale of these cuts, the timeline, or where cuts will occur, this crisis needs attention. To address funding gaps and ensure that families can meet their basic needs, now is the right time for the legislature to craft its response to federal actions before the end of the legislative session, which is rapidly approaching.

The long arm of DOGE reaches into Vermont

More than 3,000 Vermonters are caught in the on-again, off-again firings and layoffs of federal employees by the Trump administration and the Department of Government Efficiency (DOGE). It is challenging to keep track of who has a job and who doesn’t, or even of which departments still exist.

During the first two months of Trump’s second term, DOGE ordered mass layoffs of federal agency employees. Federal judges reinstated the workers in 19 agencies, including the Department of Education and the Department of Housing and Urban Development, and temporarily paused firings. But uncertainty remains as to whether the reinstatements will hold and how long the pause will last—if, that is, the administration complies with the court orders.

Leslie Black-Plumeau Joins Public Assets’ Board

Montpelier – Leslie Black-Plumeau, Research and Community Relations Director at Vermont Housing Finance Agency (VHFA), has joined the board of the Public Assets Institute.

A nonpartisan nonprofit in Montpelier, Public Assets is Vermont’s independent research organization on state budget, tax, and economic issues and the source for timely and in-depth state fiscal and policy analysis.

Leslie’s work at VHFA includes overseeing the agency’s research, data, communications and public engagement activities. She has 25 years of professional experience in program evaluation and public policy research in the areas of housing, human services, and community development. Her work has most recently been focused on Vermont, and she has a broad understanding of housing issues and HUD programs as a result of her many years of experience in Washington, DC as a Congressional housing and community development program evaluator.

Press conference: Keep the Public in Public Education

Public Assets is part of a coalition of students, parents, teachers, and community members who support public education. The group gathered at the statehouse on Tuesday, February 25 for a press conference and sledding party. Press conference speakers included: Susan Clark, author and community facilitator; Liz Schlegel of the Alchemist Foundation; Jamie Kinnarney, Superintendent of the White River Valley Supervisory Union; Vermont 2017 Teacher of the Year and Montpelier Representative Kate McCann; Harwood Union High School Tenth Grader Harmony Belle Devoe; and Bekah Mandell, Communications & Development Director at Public Assets Institute.

What Congressional budget reconciliation means for Vermont

If you’re following the national news, you’ve probably heard that Congress is in the midst of the budget reconciliation process. What is reconciliation, and how will it impact Vermonters?

Reconciliation is a budgetary process Congress can use to fast-track changes to federal spending and revenues. For lawmakers in the majority, it is popular and effective because it requires only a simple majority in the Senate—51 votes—rather than the 60 typically needed to advance legislation.

There are restrictions on what’s included in a reconciliation package. Under a rule adopted in the 1980s and named after the late Senator Robert Byrd (D-W. Va), each provision of the bill must: …

Migration: Millennials and the wealthy moved in. Most Vermonters stay put

Recently released IRS data from tax filings in 2022 provide new information about people moving in and out of Vermont. For the third year in a row, the state continued to see more filers enter than leave. Two of these years of growth occurred during the COVID pandemic—2021 and 2022. Over half of those arriving in 2022 were millennials—the generation born between 1981 and 1996—and a quarter of all new filers had incomes of $100,000 or more.

House Human Services Committee Testimony—January 29, 2025

Affordability and equity in Vermont – testimony by Julie Lowell:

Before I share with you some of our research today that looks at Vermont’s economy and how Vermonters are doing, I want to ground this conversation in state statute. With everything happening federally right now it’s more important than ever to understand the stated purpose of our current system, where it does well in supporting people, and where we need improvement.

In 2012, Vermont passed the People’s Budget Language, calling for the state’s revenue and spending policies to address health, housing, dignified work, education, food, social security and a healthy environment.

As you will see from the data I’m going to share, much of which comes from our annual State of Working Vermont report, we are doing better in some of these areas than others.

House Ways & Means Committee Testimony—January 29, 2025

From Steph Yu’s testimony: For those of you not familiar with us, Public Assets Institute works to improve the well-being of Vermonters through state fiscal and tax policy. We’ve been working on education funding for over 20 years because public education is the biggest thing the state does and the most visible tax Vermonters pay. I want to start by defining what we see as the most pressing problems in the education funding system, then raise some questions about some other concerns we’ve been hearing.

Our primary focus has always been on how we pay for schools. And we see two major problems with the current distribution: low and middle-income Vermonters are paying more of their income in school taxes than the highest-income Vermonters; and many moderate- and middle-income Vermonters face tax “cliffs” that cause big tax jumps from one year to the next regardless of whether school spending goes up in their district. Changes in how much we spend will not fix either of these problems.

House General Committee Testimony—January 10, 2025

Watch Julie Lowell’s testimony on Vermont’s housing landscape–Affordability and equity in Vermont housing.

Low-paid workers stretched to meet basic needs

A recent report by the Joint Fiscal Office shows that Vermont’s 2024 livable wage was nearly $19 an hour—exceeding the state minimum wage by almost $5. Vermont defines livable wage as the hourly earnings necessary for a single person working full time and living in shared housing to meet their basic needs. The gap was the largest in a decade, making it harder for workers to make ends meet.

Statement on Gov. Phil Scott’s Jan. 28, 2025 Budget Address

Gov. Phil Scott said again today he would reform education by doing more with less. We’re hearing understandable concerns about his plan. While we don’t know all the details yet, we’ve heard this promise before—and don’t have a lot to show for it.

Here’s what we do know: Vermonters want good schools and fair taxes.

Right now, low- and middle-income Vermonters pay more of their income to support schools than the richest Vermonters. And the biggest cost drivers in recent years, like healthcare and inflation, are out of school districts’ control. Until we address those underlying problems, any changes won’t do much to help kids, communities, or taxpayers.

State of Working Vermont 2024

Vermont has one of the highest gaps between wages and costs in the country. This mismatch leaves many Vermonters struggling to afford their basic needs.

The state has made some improvements on affordability in recent years, but in other areas policies have fallen behind. Targeted investments would make a big difference for Vermont families’ economic security. In fact, under Vermont statute, the purpose of the state budget is to address Vermonters’ need for health, housing, dignified work, education, food, social security, and a healthy environment. And Vermont has the resources to honor these obligations and make the state more affordable.

The latest State of Working Vermont Report analyzes U.S. Census and other data including costs, income, and wages to look at how Vermonters are doing and pinpoint the areas where the state can make reasonable policy improvements to help more all residents afford to meet their basic needs.

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.