This year’s Vermont Economic Conference reinforced a clear throughline. Vermont’s economic future is not constrained by a lack of potential. It is shaped by the choices that either expand capacity or deepen constraint.

The keynote message from Jack Crivici-Kramer captured that reality succinctly. Vermont needs construction, not obstruction. That applies not only to housing and infrastructure, but also to policy design, where clarity, speed, and predictability determine whether investment happens here or elsewhere.

Vermont’s economy is not failing, but it is operating with very little margin for error. Housing supply, workforce availability, and affordability pressures are not abstract challenges. They are the conditions within which every legislative decision now operates.

When capacity is constrained, policy choices carry greater weight. Costs compound faster. Tradeoffs become sharper. Assumptions that might hold in a growing economy break down quickly in an economy that is not adding people or housing at scale.

The Vermont Chamber remains bullish on Vermont’s future. The question before policymakers is whether the decisions made now strengthen affordability, competitiveness, and long-term economic resilience, or compound the pressures employers are already navigating.

Where Capacity Constraints Meet Fiscal Policy

These constraints are already shaping the Legislature’s most consequential fiscal debates this session, particularly around education finance and property taxes.

Earlier this week, Vermont Chamber President Amy Spear testified before the Senate Finance Committee on S.220, which establishes allowable growth in education spending. The testimony emphasized a reality familiar to Vermont employers: when revenues are uncertain and costs rise, growth must be managed.

Despite years of reform discussions, Vermont is facing another projected average education property tax increase of nearly 12 percent for fiscal year 2026, following more than 40 percent growth over the past five years. That trajectory is disconnected from wage growth, household income trends, and business revenue growth, reflecting cost drift rather than sustainable growth.

Revenue volatility compounds the challenge. Corporate income tax collections continue to fluctuate, increasing reliance on property taxes as a fiscal backstop. Those costs do not stop at the tax bill. They flow through rents, housing costs, goods and services, and consumer prices, amplifying affordability pressures across the economy.

While not comprehensive reform, S.220 introduces interim fiscal discipline by establishing guardrails to slow cost escalation, stabilize the spending baseline, and preserve options for longer-term solutions.

Property Tax Classification: Implementation Update

At the same time, the House Ways and Means Committee continues work on Act 73 implementation, reviewing language that establishes three property tax classifications: homestead, nonhomestead residential, and nonhomestead nonresidential. All parcels will be assigned to one or more categories.

Under the draft framework, nonhomestead residential primarily includes second homes, seasonal homes, and short-term rentals. Long-term rentals, workforce housing, and larger multifamily properties are classified as nonhomestead nonresidential, alongside business and industrial property. Mixed-use properties will be proportionally classified based on use, requiring additional parcel-level data collection and reporting.

While this language does not change education tax rates, it sets the structure that will guide how future fiscal pressures are distributed.

From Conference Takeaways to Legislative Action

The Vermont Economic Conference reinforced a message that applies directly to the work underway this session. Vermont needs construction, not obstruction. That principle matters as much in fiscal policy and tax design as it does in housing and infrastructure.

Building durable systems requires intentional policy design, coordinated sequencing, and an understanding of how decisions interact across education finance, revenue structure, and affordability. When implementation details are treated as secondary, instability follows. When they are addressed deliberately, they can strengthen confidence and expand capacity over time.

As the legislative session advances, the Vermont Chamber’s government affairs team remains focused on ensuring these issues are addressed as part of a connected strategy rather than in isolation. That means advocating for policies that expand capacity, reinforce fiscal discipline, thoughtfully hone regulation, and improve predictability for employers and communities statewide.