by Dave Soulia, for FYIVT.com

In Part 1, we began examining the interconnected policy and economic pressures shaping Vermont’s current situation. That discussion does not conclude with education funding, nor does it hinge on any single decision or institution.

Part 2 picks up where that conversation left off, continuing through the remaining structural challenges affecting Vermont’s economy, cost of living, and long-term fiscal stability.

VII. Housing Scarcity Is Entirely Self-Inflicted

Vermont’s housing crisis is not a mystery. It is engineered.

The state needs tens of thousands of new units, yet development is strangled by:

• local zoning designed to prevent density
• state-level review designed to prevent construction
• environmental appeals designed to block projects
• town-level fear of growth
• multi-year permitting timelines

If Vermont built enough housing for workers, young families, and employers, education taxes would naturally stabilize. A larger denominator lowers the burden on each individual taxpayer. But we have structured the system so that the denominator can never grow fast enough to support rising obligations.

Housing scarcity is not an act of nature. It is the predictable consequence of worrying more about hypothetical environmental impacts than about economic survival.

VIII. A Dying Tax Base Cannot Pay for an Expanding System

If Vermont had a booming, growing economy, its expensive school system might be financially tolerable. Instead, we are a state with:

• one of the oldest populations in the country
• declining youth population
• slow to negative population growth in many counties
• flat workforce participation
• continual out-migration of working-age families

You cannot fund Scandinavian-level public spending with Appalachian-level population growth. The math will never work.

As the tax base shrinks, the burden on remaining taxpayers increases — sharply. This is why property taxes are rising at a rate that shocks even long-time observers of Vermont government. It is not because the formula broke. It’s because the economic foundation that supports the formula no longer exists.

A tax system built for a state of 700,000 people cannot survive when:

• fewer families live here
• fewer children are born
• fewer workers remain
• fewer businesses hire

And yet, the cost of the public system grows anyway.
This is not a funding model problem. It’s a population and productivity problem.

IX. The Hard Choice: Growth or Austerity — But Not Both

Vermont is now at a crossroads. The choices are not complicated. They are simply politically uncomfortable.

Option 1: Embrace Growth

• Allow housing to be built at scale
• Reform Act 250 into a predictable, time-limited process
• Encourage business formation and expansion
• Restore public order to downtowns
• Produce workforce-ready graduates
• Grow the tax base rapidly

In this model, Vermont can afford its schools, services, and obligations.

Option 2: Embrace Austerity

• Establish a realistic statewide per-pupil funding baseline
• Restructure benefits and staffing levels for future hires
• Require local towns to pay the premium for small schools
• Reduce administrative redundancy
• Align public spending with the size of the tax base

In this model, Vermont shrinks its system to match its economy.

Option 3: Try to Keep the Current Fantasy (Guaranteed Collapse)

Continue to:

• restrict development
• discourage business
• limit housing
• maintain high spending
• protect every small school with statewide dollars
• avoid benefit reform
• ignore demographic decline
• hope federal money materializes indefinitely

This model ends in failure — fast or slow, but guaranteed.

A state cannot have a shrinking population, a stagnant economy, and ever-increasing public obligations without eventually breaking.

X. Vermont’s Future Depends on Telling the Truth

For years, the Legislature has attempted to manage each crisis as if it were isolated:

• education funding
• property taxes
• housing
• workforce
• healthcare
• downtown safety
• economic development

But none of these systems stand alone. They are interdependent. Vermont’s crisis is systemic, and the solution must be systemic.

The first step is admitting the reality:

• We cannot continue spending at current levels without economic growth.
• We cannot grow the economy without reforming environmental and regulatory policy.
• We cannot attract employers without workforce readiness.
• We cannot retain families without housing.
• And we cannot preserve our schools without either economic expansion or fiscal discipline.

If Vermont attempts to avoid this truth, the collapse will come — and it will come at the moment we can least afford it.

XI. The Choice Ahead

What Vermonters are experiencing now did not happen overnight. It is the cumulative result of decades of policy decisions made in isolation, each one manageable on its own, but collectively unsustainable.

Long before education funding became the focal point, Vermont adopted a regulatory framework—most notably Act 250—that significantly constrained development. Whatever its original intent, the long-term effect was to limit housing production, discourage business expansion, and steadily increase the cost of living in a state with limited economic growth.

That framework was already in place when the Brigham v. State decision arrived in 1997. Brigham did not mandate runaway spending, but it did require the state to equalize educational opportunity across towns. Rather than addressing the underlying economic constraints that made this difficult, the Legislature responded with a series of increasingly complex policy fixes: Acts 60 and 68 to equalize funding, Act 46 to consolidate governance, Act 48 to refine that consolidation, and most recently Act 73—each an attempt to manage symptoms without confronting the full system in which they operated.

During the same period, Vermont layered on additional cost pressures through healthcare policy, insurance mandates, and consolidation, driving up expenses for school districts, municipalities, employers, and families alike. Meanwhile, demographic trends moved in the opposite direction: fewer children, fewer working-age adults, and a shrinking tax base asked to support an ever-expanding set of obligations.

Each of these decisions was defensible when viewed narrowly. Together, they produced exactly what we are seeing now.

Vermont’s Legislature has spent years attempting to manage each of these crises in isolation, avoiding the uncomfortable but necessary conversation about the systemic nature of the failure. Education funding became the pressure point not because it is uniquely broken, but because it is where all of these unresolved tensions finally collide.

Vermont must now choose a path.

Grow.
Or
Consolidate and reset.

What it cannot do is continue pretending it can sustain prohibitive regulation, minimal growth, lavish spending, high-cost labor structures, small schools everywhere, expansive public programs, and low taxes at the same time.

Reality does not negotiate.
Math does not compromise.
And time is running out.