There’s a triple-headed monster in Vermont. It’s a three-way crisis in education, health care and housing. All three are systemic, highly complex and not easily solved. While we have other issues, fixing these would go a long way toward improving things overall. Until we do solve this Big Three, our residents will continue to struggle financially and it will be difficult, if not impossible, to attract new residents.
We are hearing a lot about affordability these days, at the national level, but also locally. We tend to think about this as a problem for those on the lower rungs of the economic spectrum and perhaps they feel it more acutely. I’ll probably get the world’s tiniest violin for saying this, but affordability is also a concern for more affluent residents. Many more well-off Vermonters are on fixed incomes and facing ever mounting cost increases. Many have already voted with their feet.
I was struck by a Substack post by Michael Green, chief strategist and portfolio manager for Simplify Asset Management. He’s a solid economist quoted by folks like Paul Krugman. He argued that the definition of the poverty level should be changed. Poverty level in the U.S. is $31,150 a year for a family of four. It hasn’t changed much over time. Green argues, using the same “minimal needs” conceptual framework established in the 1960s, that the true poverty line today should be closer to $140,000 for a family of four. This was shocking to me, but made sense considering housing costs, health care, food, and cost of living; plus education, transportation, and everything else we need to lead modern lives. Given how expensive things are in Vermont, I wouldn’t be surprised if that number was somewhat higher here.
I don’t think our Legislature has fully gotten on-board with the affordability program. Let’s take education first. Last week, Vermont Tax Commissioner Bill Shouldice sent his annual December letter to Senate President Pro Tempore Phil Baruth projecting an average property tax increase of 11.9% next year. But it would appear that the education bill passed last session, while at least an attempt to do something, has done little to fundamentally change our broken education system. It is unclear where the Legislature goes from here.
This November, we voted down a proposed $149 million bond initiative for the Central Vermont Career Center that would have “only” increased property taxes 6% to 8%. While I am in favor of more career education, I thought it was tone deaf that some group thought tacking an increase on to our already exorbitant property taxes wouldn’t be a problem, especially if we’re going to get a 12% additional increase. This was a bit of a stealth ballot initiative. It appeared without much fanfare and we had nothing else on the ballot (at least in Waitsfield). Maybe they just thought no one would notice. By now, people should understand we are paying attention. Property taxes are an existential threat to many Vermont citizens and voters are not stupid.
On health care, our insurance rates are likely to increase precipitously this year. Some of this will be a result of federal changes to Medicaid and the expiring of Affordable Care Act subsidies, but it’s also a result of structural problems within the Vermont system. We know what happens when people can’t afford health care coverage (and Peter Welch says that something like 40,000 Vermonters could lose Medicaid coverage). They opt out. The healthy don’t pay into the system and those with health care needs delay care until a problem becomes acute. Then they go to the emergency room and get the most expensive care available. That cost of care is absorbed into the hospital’s cost structure and gets passed on to the rest of us. Enabling the 20% of the people who consume 80% of health care resources to seek preventative and quality care early is one of the easiest and most cost-effective things we can do to reduce health care costs. We need solid action on affordability here, structural change, and we also need to address access and quality across the state.
Finally, housing. I was recently in Boston for a college alumni event and had a chance to chat with a young 30-something alum and her husband. Both were professionals living in the city and gainfully employed. They were very excited to hear I lived in Vermont and told me how much they loved the state. They told me about their side hustle – buying Vermont properties near ski areas to rent out as Airbnbs. They were up to about six properties and, at least they said, were making a ton of money at it. They seemed oblivious to the issues that this created for us residents. I asked them if they’d ever move to Vermont and they said no. They had their careers in Boston, and could visit the state whenever they wanted. I was too polite to say, “you’re just the kind of people we hate up here,” but I was thinking it. They were very nice though, just clueless about how their actions were affecting us.
Multiply this by the others doing the same thing; taking advantage of Vermont as a recreational tourist destination to make a buck. It seems clear that we need sensible regulation to control this. I applaud Warren’s new short-term rental ordinance. We need more of this.
My advice to our Legislature is to stop spending energy on social initiatives or virtue signaling bills. Not that some of these aren’t important, but our triple-headed hydra of Education, Health Care and Housing is a five-alarm fire. It needs to be treated as such. Solutions will require out-of-the-box thinking and we, the electorate, must recognize that we need to accept change. There are no easy answers here and we can’t have our cake and eat it too. Solutions also need to fundamentally reduce cost without compromising quality. Taxing more or shifting tax from one pocket to the other is not the answer. We can all calculate our overall tax burden. As Margaret Thatcher (another highly popular politician here in Vermont) once said, “the problem with socialism is that eventually you run out of other peoples’ money.” I think we are just about at that point here in Vermont. We’re out of other peoples’ money. Taxing a shrinking pie more without controlling the cost side of things is not a recipe for success. Until we get laser focused on making the state more affordable for everyone by reducing costs, we will have trouble attracting new people to the state or retaining those who are already here.
Pete Mooney
Waitsfield
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