Go to Top

What Ails Vermont?

Vermonters are understandably proud of their scenic, mostly rural and unspoiled state, so it may have been a little jarring to hear Gov. Peter Shumlin talk about a “full-blown heroin crisis” and a mounting “hopelessness that can help drive drug habits.”

Jarring, but not exactly surprising. Even as just an occasional vacationer, for years I have heard about a swelling problem with heroin in the small city of Rutland, at the western foot of the Green Mountains. Overall, Shumlin said in his state of the state address, treatment for opiate use has increased nearly eightfold since 2000.

Which brings us directly to the question: What ails Vermont?

If we can tear our gaze away from those green hills, red barns, snowy ski slopes and brilliant fall colors, we might see a statistical picture of a state that is stagnating, like a retiree with too little to do. Bodies decay under such conditions, and spirits do too.

With an enviable unemployment rate of 4.4 percent for November, compared to the national 7 percent at that time, you might think Vermont’s economy is booming, much like that of equally rural, oil-fed North Dakota. But it isn’t. There were about 335,000 Vermonters (from a total statewide population of about 626,000) working that month, including the self-employed. In November 1999, the state counted 328,200 workers. That’s a pitiful net growth of fewer than 7,000 jobs in 14 years. By the way, North Dakota - with a population only slightly larger than that of Vermont - gained around 50,000 jobs in the same 14-year period.

The recession of 2008-2009 is not a big factor. After recovering many of the jobs lost in the downturn, Vermont actually lost some jobs during the past year. Unemployment fell during the same time, however, from 5 percent to 4.4 percent, as more people left the labor force than entered it.

Overall, Vermont lost a handful of residents last year - the first population downturn in three-quarters of a century, according to the Census Bureau. From the 1960s through the 1980s, Vermont gained residents at double-digit percentages. The state responded with numerous measures to curb development, including a land-gains tax of up to 80 percent on property that is acquired and quickly subdivided, usually for new housing developments. From 1990 to 2000, the population increased only 8.2 percent. From 2000 to 2010, the net gain was a scant 2.8 percent. These are not annual percentages; these are percentages for the entire decade. From 2010 to now, the growth is barely above zero.

Similar trends are playing out nationally, but they are exaggerated in Vermont. The state is older and much whiter than average. The state’s percentage of Hispanics (1.5 percent) is the second-lowest in the country; the percentage of African-Americans (1 percent) is third-lowest. These demographic groups tend to have higher birth rates than non-Hispanic whites.

It is no surprise that Vermont’s population of school-age students is shrinking at an alarming rate. There were fewer than 90,000 school-age Vermonters in 2011-12, according to the state, compared to more than 106,000 in 1996-97. The school population fell in all 15 of those years.

As school enrollments fall, costs per student are rising. The state spent about $13,500 per elementary and secondary student this year, up about 30 percent from a decade earlier.

Vermonters seem to think their state is a great place to live, but it seems not too many folks from other places agree.

Vermont’s notably chilly weather must play a role, as does its remoteness. But New Hampshire is not tropical either, and it has attracted considerable growth and a thriving technology industry, especially the southern region close to Boston. The state’s population is more than double Vermont’s, and it grew by more than 6 percent between 2000 and 2010.

I think Vermont’s tax structure has a lot to do with the difference between its performance and its neighbor’s. Besides the aforementioned tax on relatively short-term gains from the sale of land, the state has a steep income tax, is among the minority that imposes an estate tax, has a significant sales tax, and also provides a property tax break to households with less than $90,000 of annual income, which shifts more of the burden to upper-income residents. New Hampshire has no land gains tax, no tax on wages, no estate tax and no sales tax.

Taxes are not the only factor, however. Egalitarian Vermont, which sent self-described socialist Sen. Bernie Sanders to Washington, has a complex and cumbersome property tax system in which wealthy communities directly subsidize schools for poorer locales. The system makes it complicated and expensive for such communities to raise money to spend locally on programs such as enriched extracurricular activities and advanced placement classes. Though Vermont’s schools are widely considered to be pretty good, they do not rank highly in the percentage of graduates who go on to four-year college degrees.

Likewise, the state’s varied restrictions on development discourage the creation of new industries and the jobs they might bring. There is a historical basis for Vermont’s anti-development bias. In the years before the Civil War, the state was nearly denuded of trees because of a boom in farming and raising livestock, especially sheep. The barren hillsides poured choking silt into the streams below. By the start of the 20th century, Vermont had to go so far as importing white-tailed deer from New York to restock its population.

Many of the state’s residents today prize the small-town culture. They treasure handmade crafts and artisanal, organic, locally grown foods. I have nothing against these things; I like many of Vermont’s products, including chocolate, wooden crafts and maple syrup. But you don’t attract many new jobs with these industries, and without jobs, you don’t attract many young workers and their children. You don’t create many opportunities for the young people who are already present, either.

The only reasons for Vermont to have an epidemic of drugs and hopelessness are man-made. When heroin is sold just around the corner from the farmer’s market, something must be wrong. I think I understand why Vermonters have adopted the policies that govern their state today. I do wonder, though, whether they are willing to change their policies if they don’t like the results.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

The views expressed in this post are solely those of the author. We welcome additional perspectives in our comments section as long as they are on topic, civil in tone and signed with the writer's full name. All comments will be reviewed by our moderator prior to publication.

, , , , ,

24 Responses to "What Ails Vermont?"

  • William Benton, Mayor, City of Vergennes, VT
    January 17, 2014 - 5:46 pm

    It sounds like you think the rich school districts should keep their high priced schools and enrichment programs and to hell with the poor districts. Act 60 and 68 were the result of a Vermont Supreme Court mandate that required greater equity in education funding. I do not agree with some of the details of the school funding formula but it is the most equity driven system in the country. I hope you order your chocolate and maple syrup on line. We don’t need your type stirring up bad press for a great place to live.

    • William Osborne
      January 21, 2014 - 3:32 pm

      I agree. Move to the conservative South and “don’t let the door hit you in the ass.” Everyone moves here trying to escape the crap, but then brings the mentality that created it with them. We have problems. And we can solve them without selling out for the fast buck.

      • Art Vandelay
        January 23, 2014 - 9:00 am

        so you do not think the left leaning politics of Vermont have anything to do with the shrinking population, the lack of substantial economic development, and current drug issues. If we have the answer to the problem then why is it not being fixed. I can tell you I am thinking of moving out west using my engineering degree in an area where I have job options rather than being stuck in one job because of the lack of industry. Keep telling yourself that there is no problem.

    • Jamie Carter
      January 24, 2014 - 7:43 am

      Act 60/68 has been the biggest boondoggle this state has ever seen………ever. The Supreme Court mandated the funding mechanism to be more equitable, not to implement some insane and convoluted redistribution of wealth.

      While it maybe equitable for the schools, it certainly is not equitable for the citizens of Vermont

    • Debra Wilson
      January 24, 2014 - 8:22 am

      While I do not like outsiders butting their noses into our business, I have to agree that the property tax, and Act 60 and 68, are NOT equitable. Being from one of the so-called, rich communities, I can tell you that the few rich inflate the prices for the rest of us. While our schools are crumbling around our ears, VT sees fit to send our tax dollars to Burlington, really, Burlington, probably so they can improve the swimming pools in their schools. Most of us scratch and scrape by on jobs that offer menial wages, long hours, and hard work. We wonder where the money is going to come from to heat and run our homes. We follow tree companies around to collect wood to heat our homes, and when we get so we can no longer do that, we suffer. It is a very difficult thing for people who were born here, and lived here all our lives to exist, and remain here, but we have no place to go. The housing market is down, and any money we make is tied up in maintaining a life. Vermont has tried to exist on the tourist trade for way too long. While it’s a wonderful industry for the CEO’s of the ski industry, etc., it’s crippling for the residents who try to subsist on the money earned from those businesses. No, I don’t agree that all this is the reason for the heroin addiction. I said many years ago, that as soon as 91 is finished, all the riff raff from other states will be coming into our state. It’s nothing but a corridor for drug runners. I for one, don’t want to see our state all cluttered up with factories, but I know we can’t go on like this much longer. It’s become nothing but a McDonald’s playground for the rich.

    • Jimmy Roper
      January 24, 2014 - 8:51 am

      Thank you for your concern Larry. Now politely vacation elsewhere.

    • Wyla Salo
      January 24, 2014 - 10:16 am

      Did you really read the whole article? Doesn’t sound like it.

    • Tom Johnson
      January 26, 2014 - 8:18 am

      “We don’t need your type stirring up bad press for a great place to live.” -Mayor of Vergennes Wm Benton.

      “Your type” ??? What exactly do you mean by ‘your type’ Mr Mayor?

    • Bruce Entwisle
      January 27, 2014 - 7:57 am

      Mr. Mayor:

      The author is simply pointing out the facts that your policies have engendered. It may be bad publicity, but you lie in the bed you make. Cross over the White Mountains, look at NH policies and quit whining.

  • Joseph Rice
    January 17, 2014 - 9:13 pm

    Don’t blame me, I vote GOP. Moved to VT. in ’75, it was still thriving and the future looked good. But that has changed. My 2 kids left after college, and I, now retired, I am looking to leave also, because I do not see a conservative getting elected anytime soon. Gotta get out before there are no more buyers.

    • Art Vandelay
      January 23, 2014 - 9:03 am

      I imagine your kids are my age (30). All the kids I went to school with that went on to college have moved out as well. I moved back four years ago but I do not know how much longer I will be staying. It is a real issue.

  • Beverly Biello
    January 18, 2014 - 10:57 am

    Thank you for so eloquently identifying the growing problems in our state. No one likes to call their baby ugly, but I hope the fact that are problems are now getting outside recognition will get our lawmakers’ heads out of the sand. We need stronger leadership and some brave decisions. The mentality that growth and business is bad, and that the only solution is to keep taxing the few is destroying our economy and way of life. I have multiple generation Vermont friends who are now talking about leaving the state. And for those of us who adopted the state as our home and hoped to retire here, we are just plain sad, and not a little afraid of where this will end.

  • Brian Harwood
    January 18, 2014 - 4:04 pm

    Stay where you are. I am an old white guy -7th generation Vermonter with very liberal tendencies. Talk to a few of the folks whose homes have been broken into by druggies looking to score. Talk to the folks who run boy and girl clubs about their home situations.
    Trying to leap from the statistically frightening population/employment numbers to the drug situation is a jump I am not ready to take.

  • Steve Currie
    January 21, 2014 - 5:07 pm

    An excellent statement and analysis. As a native born Vermonter, I was gone from Vermont for all of my 36 year working career, but always intended to come back home. We moved back to Vermont in 2005, happy to finally get home. But it’s clear that the decades of anti-growth policies and ingrained egalitarianism (equality of CONDITION, not just of opportunity) that means ever higher taxes on the diminishing few that can pay have made Vermont too expensive for our retirement resources. So, with a heavy heart, we will soon once again relocate and leave Vermont, I guess for good.

    • Elaine Magnan
      January 25, 2014 - 9:00 am

      Well said. I agree, We have lived in VT our whole lives, love it here. We have never considered living anywhere else. But, as retired citizens, we also feel that Vermont’s high cost of living is making it very difficult to stay. We keep finding ways to cut back, but the state’s taxes and fees are the real culprits that make living here difficult. Too many rules and regulations make it unfeasible for new businesses and encourage others to leave.

  • Steve Maslack
    January 22, 2014 - 8:11 am

    I can trace my family’s Vermont roots back to the 1740’s, and things just are not what they used to be.
    Mr. Elkin makes some excellent points. However, in my view, there are several other issues that are relevant to the conversation:

    I wish his analysis had quantified the growth in public-sector and parasitic non-profit jobs, versus private sector employment trends. I think that it would be very enlightening.

    Also, it seems to me, one cannot ignore the fact that Vermont has become a magnet for the ‘dependent classes’, due to the relatively high social-welfare benefits that are available. The self-reliant attitude of our State’s founders is rapidly diminishing.

    Too bad.

  • Lawrence G. Jensen
    January 22, 2014 - 11:19 am

    The relationship between the lack of new jobs and the incidence of drug addiction is not coincidence. People without jobs are more prone to addiction than those without a job I have heard Correction leaders complain that the problem when they release a inmate who has undergone addiction treatment successfully is that they can not find jobs for them when they are released. Many of our best kids leave the state. Many who stay are not able to find jobs elsewhere either. The ones who do stay are often forced to be self employed under the worst conditions for a small business in the country.

    I would take exception to one comment in this column. There are few rich or poor towns. There are towns that planned well and accommodated new industry and housing and those that did not. Towns like Shewsberry keep the number of building permits it issues each year very low. If a town accepts a business, it can expect to absorb all the town expenses associated with the business and then share the school taxes collected with other towns which will not accept new businesses. This has been an antidevelopment measure from its beginning.

  • Matthew Brace
    January 24, 2014 - 7:52 am

    I have lived in Vermont for ten years with my wife. We are leaving this sick little state. There are no programs to help the folks who need to stay warm but just make a little to much money to fit in to any program. Yes there are great and heroic people here and you see this during episodes like the hurricane but forget about your neighbors being all friendly and welcoming. These people eat there own. Customer service is non existent and the more for me less for you take take take attitude is alive and well. Don’t tell a local contractor you are from out of state whatever you do. You will see your estimate go up 40%. I am in the trades and I know this to be a common occurrence. Goodbye Vermont you are a bad bet. Don’t believe the pastoral lies about this wasteland.

  • Mark Milazzo
    January 24, 2014 - 7:55 am

    Well stated. I am a 3rd generation Vermonter and I am looking to move. The taxes are crushing. I am not a rich person but have worked hard for what I have. I put myself through school and worked hard in the technology field. I have no define pension and have to save year after year for my retirement. The market has not been good to my 401k. I watch my taxes in VT grow at a rapid clip every year. The bottom line is I just can’t afford to live in VT. I see how the lack of good jobs is a detriment to young families moving here. I see more of our state being bought by wealthy out of state people.It is good for them to keep VT as it is. I don’t want to strip development VT, but we have lost the balance in this state. We can bring good jobs to this state while balancing the need to protect the environment, but it will not happen under the current leadership in Montpelier.

  • Louis Messier Jr.
    January 24, 2014 - 8:44 am

    Less government oversight/regulation and meddling would be a good start. Career politicians don’t help. What has really screwed Vermont up is the part of the population that moved here and then decided they missed all the things they had back home, so tried to make Vermont into the place they left. Move in, marry our women, just don’t change everything! If you don’t like it here the way it was there is a lane on each road that exits Vermont so you can find your way back. Go, and God speed!

  • Michael Zack
    January 24, 2014 - 9:36 am

    I fully agree with the article. 27 years ago I had started a business in Vermont. Being on the Connecticut River, I had a choice on which side of the river to build on. Land was MUCH less expensive on the Vermont side. The property taxes at that time were far lower as well (or so I thought). I learned that there was a big reason that White River Jct. looks like a broken Appalachian Mining town and 1 mile away in West Lebanon, NH business thrives.

    In the Dartmouth area there are several wealthy towns and my business caters to the above average earner, we service European and Antique automobiles. Over time we have seen a large number of our wealthier customers pack up and move the short trip over the border. Taxes, fees and politics were and still are the reason. As long as Vermont continues their path of Socialism this trend will not end. The middle class will eventually become the wealthy, not by income, just by attrition. With the specter of single payer looming, I am hoping my retirement and subsequent move to New Hampshire will come soon enough.

  • Will Adams
    January 24, 2014 - 9:31 pm

    Why should anyone in Vermont care about the opinions of financial advisors from New York, Florida and Georgia. Moreover, what is their real agenda in giving Vermont a thrashing? Does our state have problems? Sure. Would I trade what we have here for that in New York, Florida or Georgia? Not in a million years.

  • Jeremy Hill
    January 25, 2014 - 3:13 pm

    This is an interesting article, and the property tax situation is becoming an increasingly scrutinized issue, especially this year as we see school budgets being slashed in order to avoid debilitating tax increases. I have heard claims that part of the problem is from the VT dept. of corrections raiding the education fund, and so in order to make up the shortfall, there is less money available for schools, placing an increased burden on the property tax as a source of revenue. Does anyone have better or more complete information on this? I wonder, however, if there’s a correlation between a lack of development/jobs and the heroin problem. There is a heroin problem here, but there’s a heroin problem everywhere. I’m one who loves life in VT, and I surely don’t want our state to start looking like southern NH in the name of economic development. No offense NH, but where’s the soul in selling out our natural beauty for a quick buck? I’ll be sticking around to look for solutions.

  • Greg Lange
    February 3, 2014 - 3:23 pm

    This is a beautiful state to visit but living here is very difficult if you are young and ambitious. I have lived here for over three years due to a work relocation and can’t wait to leave. In addition to the taxes, due to a lack of competition, consumer goods, fuel and food costs are almost at Metro New York City levels. How does a large pizza cost $23.00 and gas in Lebanon, NH is always forty to fifty cents per gallon lower than in Burlington? I have met some great people here and I feel bad that many of our friends who were born and raised here have seen their children and grandchildren leave but I don’t have to wonder why. I applaud those who posted having experienced these changes first hand and want to find answers. Unfortunately the you’re not from here so your opinion doesn’t matter crowd is only going to make matter worse. Until you identify the problem, you will never fix it and ignoring it will only accelerate it. I have a finance background and my company transferred me here because there is not enough talent to recruit from locally. I am sure this is also a factor in why cost have become so inflated because all of money being paid for the importation of skilled talent gets passed onto the consumer.