Tony Walton

It is too easy — and too convenient — to blame education for Vermont’s property-tax pain. That argument is politically useful, but analytically thin. The deeper problem is that Vermont keeps trying to finance an ambitious, high-service state on a tax base that is not expanding fast enough. When you don’t build enough housing, don’t add enough workforce, and make growth harder than it should be, the cost doesn’t vanish. It gets spread across too few households and businesses.

The market data makes the point more clearly than the rhetoric. In March, Vermont’s median sales price reached $425,000. Active inventory rose to 1,741 homes, up 17.2% from a year earlier, yet properties still moved in an average of just 9 days. Demand is not the issue. People want to live here, buy here, and invest here. The problem is that Vermont still behaves like a place surprised by its own desirability. Scarcity may preserve character, but it also drives price, pressure, and exclusion.

That is what makes the current fight over Act 181 so revealing. The law was meant to modernize land-use review by pushing housing toward designated growth areas, creating interim housing exemptions through 2027, and building a new map-and-tier system through the Land Use Review Board and Regional Planning Commissions. In concept, it is sensible: make it easier to build in the right places and more protective in sensitive ones. In practice, the planning architecture is still incomplete. The maps are still being developed, the rules are still phasing in through 2026, and the rollout has been technical enough to lose much of the public in translation.

That uncertainty is now colliding with politics. Speaker Jill Krowinski has acknowledged that many Vermonters — especially in rural communities — have not felt heard in the process, particularly around the road rule and Tier 3 rulemaking. Lawmakers are now moving to pull back part of the law after backlash from landowners and towns. That does not mean Act 181 was misguided. It means Vermont is trying to execute a major planning reset in real time, with unfinished rules, incomplete maps, and a public that has less patience for process than Montpelier tends to assume.

Meanwhile, the House has advanced legislation that would raise education property-tax rates by an average of 7%, following more than 40% growth in average education property taxes over the past five years. That increase is real, and painful. But the smarter takeaway is not that Vermont should spend the next decade searching for villains inside school budgets. It is that the state cannot keep loading fiscal pressure onto a narrow base while remaining ambivalent about the housing and economic growth that would broaden it.

There are signs Vermont understands this, at least in theory. The state has identified about 140 underused properties that could potentially be sold or leased for housing, and multiple communities have approved local option taxes as they look for revenue beyond the property-tax bill. Those are not silver bullets. But they point in the right direction: more homes, more workers, more commercial activity, and a planning system that can distinguish between stewardship and self-sabotage. Vermont does have a tax problem. More fundamentally, it has a tax-base problem. Until the state gets serious about expanding supply and reducing friction, tax pain will remain less a bug than a feature of the model.