Vermont’s 2027 Budget Debate Is Already Taking Shape
The Legislature may not return to Montpelier until January, but the central tension of the 2027 session was already visible at this week’s Joint Fiscal Committee meeting: Vermonters continue to face high costs, state revenues are tightening, and the pressures limiting economic growth have not gone away.
Commissioner of Finance and Management Adam Greshin said the Scott Administration is developing a budget with overall growth of slightly more than 1%. The governor is also expected to propose tax relief as part of his focus on lowering the cost of living, with details coming in January.
For Vermont businesses, the direction of the budget will matter as much as its size. More than 80% of respondents to the Vermont Chamber’s 2026 Business Climate Survey said policymakers do not understand the pressures facing businesses. The Vermont Competitiveness Dashboard adds urgency, ranking Vermont last nationally in economic momentum and near the bottom in workforce retention and population growth.
Vermonters need relief from high costs, and the state must live within its means. The challenge will be ensuring that limited resources are used effectively while advancing policies that allow employers, workers, and communities to grow.
Several committee updates illustrated what is at stake:
- Fuel costs: Testimony described current conditions as bad for consumers and retailers, with kerosene prices presenting a particular concern. When the cost of heat, housing, health care, and transportation rises, employers feel the effects through recruitment, retention, and wage pressure.
- Federal work requirements: Approximately 4,000 Vermonters are expected to be affected by expanded federal work requirements for public benefits. The state is conducting outreach to help individuals understand the new requirements and connect them with employment services, training, and practical assistance. Lawmakers also raised concerns that some eligible Vermonters could lose benefits because of paperwork or administrative errors.
- Housing infrastructure: The Agency of Natural Resources is seeking approval to shift approximately $50 million from drinking water programs to clean water programs, where larger wastewater projects can deploy federal funds more quickly. Water and wastewater capacity is essential to building housing and supporting business expansion.
- Health care: Approximately $90 million has been obligated through the Rural Health Transformation Program. For employers, the measure of success will be whether funding improves access, strengthens the health care workforce, and produces progress on costs.
The Vermont Futures Project’s Economic Action Plan calls for affordability and abundance, with more people and more places at the center. Without housing and manageable living costs, employers cannot attract workers. Without workers and business growth, Vermont has fewer taxpayers to support its obligations.
That is the risk heading into 2027. Vermont must avoid managing decline by continually dividing fewer resources among growing needs.
This does not require higher taxes or greater overall spending. It requires a sharper focus on results, better use of existing resources, and policy choices that allow the private sector to grow. The upcoming budget debate should be measured by whether it reduces costs today while improving Vermont’s ability to compete tomorrow.
