Vermont keeps buying time. The structural problems keep compounding.

by Matt Swenson

Vermont is debating property tax relief again. The plan is straightforward enough: use state funds to soften increases driven by education spending, ease the pressure on homeowners, and move forward. In the short term that offers something. But it doesn’t change anything underneath. The structure is where the problem lives, and the structure isn’t being touched.

Start with the number nobody in Montpelier wants to say out loud. Vermont’s student enrollment has been falling for years. The schools, the buildings, the staffing levels, the administrative overhead — all of it was sized for a population that no longer exists here at that scale. Run a system built for more students than you have and cost per pupil rises. It has to. Moving money between accounts to flatten the tax bill doesn’t shrink the system. It postpones the moment when someone actually has to.
Buying down the tax rate is exactly that kind of postponement. It’s a pressure valve. It tells homeowners the situation is being managed when what it’s really doing is deferring a structural conversation that gets harder the longer it waits. The education cost problem doesn’t improve on its own. Enrollment isn’t coming back. The buildings still need heat. The administrators still draw salaries. And next year, the same conversation starts again.
Housing policy has the same problem. Grants, subsidies, development incentives — Vermont deploys these tools as if housing is a supply problem that the right program can fix. Sometimes supply is the constraint. But housing demand doesn’t appear because units get built. It follows jobs. It follows opportunity. Without a real economic foundation underneath it, subsidized development is treating a symptom. The condition underneath keeps going.
The pandemic years made this harder to see clearly. Vermont absorbed an unusual wave of outside buyers — remote workers, people chasing space, people who could afford to leave cities and did. Prices moved fast. That surge is over. Homes are sitting longer now. Some prices have come down. Higher interest rates changed what buyers can do, and the migration patterns that briefly made Vermont’s market look strong have normalized. Markets cycle. Policy built on pandemic-era demand as a permanent baseline was always going to collide with reality eventually.
What has taken shape here over the past two decades is a class structure Vermont’s political culture isn’t built to discuss honestly. At the top, an imported ownership and professional class — remote workers, retirees, second-home buyers — whose financial position lets them absorb costs that would be catastrophic for most working families. At the bottom, a growing population dependent on subsidized housing and state services just to remain. What has disappeared is the middle. The tradespeople, the small business owners, the multigenerational working families who built Vermont’s towns and sustained its civic life. They haven’t left in any dramatic way. They’ve been priced out gradually, quietly — in a way that shows up in empty storefronts, consolidated schools, and communities that look increasingly like managed decline wearing the aesthetic of a destination.
Vermont’s labor market tells a related story. Workforce shortages in certain sectors have been addressed in part through expanding labor supply rather than through the wage and condition improvements a genuinely tight market would otherwise force employers to make. When workers have limited options and limited mobility, the bargaining dynamic shifts — away from the worker and toward whoever is hiring. The people who absorb that shift most directly are working class Vermonters already competing in those same markets. This isn’t a judgment on individuals seeking stability and opportunity. It’s an observation about who pays the economic cost when policy substitutes supply expansion for the harder work of building an economy that compensates its existing workforce fairly.
Healthcare makes all of this concrete. Vermont can’t recruit and retain the specialized medical professionals it needs. Oral surgeons. Surgical specialists. People whose training takes a decade and whose skills give them real choices about where to practice. Those choices respond to costs. When taxes rise and housing is expensive and the economic environment looks stronger somewhere else, some of those professionals leave. Not all at once. Not dramatically. But enough, over time, to deepen shortages that are already straining what the system can deliver.
Technology and advanced manufacturing face the same environment. Vermont’s leaders talk regularly about innovation, aerospace, data-driven industries. The state has genuine assets — real craftsmanship tradition, capable workforce, qualities that matter to people who can work from anywhere. None of that is nothing. But companies that scale need something specific. Access to talent that wants to be there. Infrastructure that supports growth. A tax and regulatory environment that doesn’t punish success. Companies that start here and eventually relocate because they’ve outgrown what Vermont can offer represent a quiet, compounding loss — not dramatic in any single quarter but significant across a decade.
Tax structure matters here whether the conversation is welcome or not. Pennsylvania has a flat income tax. Colorado does too. The debate about whether flat structures are superior is genuinely complicated. But what they offer is clarity. Businesses and professionals can model their costs without navigating an increasingly steep rate schedule as income grows. Vermont’s progressive system reflects real political values. But whether it’s helping or hurting the state’s long-term ability to compete is a question worth asking directly instead of avoiding because the answer creates discomfort.
What undermines Vermont’s policymaking most consistently is the habit of treating connected problems as separate ones. Education spending gets debated in one room. Housing in another. Healthcare workforce shortages go to a task force. Tax competitiveness surfaces in a different conversation entirely. Meanwhile these challenges feed each other in ways that isolated policy responses can’t address. A heavier tax burden makes it harder to attract the professionals the healthcare system needs. Workforce shortages raise costs for everyone. Housing incentives can’t compensate for an economy that isn’t generating enough reasons for capable people to stay. And temporary fiscal fixes can’t substitute for the structural rethinking Vermont has been deferring for a long time.
Vermont isn’t finished. The quality of life here is genuinely exceptional for people who value what the state offers — the landscape, the communities, the particular character of a small place where individuals can still matter. That draws people and it’s real. But it isn’t a substitute for economic competitiveness. Treating it as one is a strategy for gradual decline that happens to be aesthetically pleasant on the way down.
The path forward isn’t complicated to describe. Get serious about the education cost structure not another study, actual reduction that matches the population Vermont has now. Align housing policy with job creation instead of running them as parallel tracks that occasionally acknowledge each other. Retain the high-skilled professionals in healthcare and technology who have options and are paying attention to how the state treats them. And find policymakers willing to say clearly that buying down taxes buys time, not a future.
The real question is what Vermont does with whatever time it buys. Because the bill doesn’t go away. It just waits.