Vermont’s budget basics
According to the National Association of State Budget Officers (NASBO), Vermont’s total expenditures in fiscal year (FY) 2022 were $7.6 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2022 were $2.9 trillion, ranging from $5.6 billion in Wyoming to $510.0 billion in California.
Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.
Per the US Census Bureau, Vermont’s combined state and local direct general expenditures were $8.8 billion in FY 2021 (the most recent year census data were available), or $13,678 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $11,087.
(Note: We cite data from both NASBO and Census to provide a broader picture of each state’s fiscal situation. However, these sources detail spending from different levels of government in different years, and the COVID-19 pandemic and the federal government’s response to it significantly affected these totals in different ways in different years. Please only use one source if you are looking for historical comparisons.)
Vermont’s largest spending areas per capita were public welfare ($3,195) and elementary and secondary education ($2,944). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.
Vermont’s combined state and local general revenues were $9.0 billion in FY 2021, or $13,904 per capita. National per capita general revenues were $12,277. Vermont uses all major state and local taxes. After federal transfers, Vermont’s largest sources of per capita revenue were property taxes ($2,992) and individual income taxes ($1,906).
Governor Phil Scott, a Republican, was elected in 2022 with 67 percent of the vote. The next gubernatorial election is in 2026 because Vermont governors serve two-year terms. (New Hampshire is the only other state where governors serve two-year instead of four-year terms.)
Vermont has a divided government. Democrats control both the House of Representatives (106 Democrats to 38 Republicans and 6 independents) and Senate (22 Democrats to 7 Republicans and 1 independent). The entire legislature is up for election in 2024 because both representatives and senators serve two-year terms.
Vermont’s budget institutions, rules, and constraints
Vermont uses an annual budget. The legislature is not required to pass a balanced budget, the governor is not required to sign one, and deficits may be carried over into the following year. However, the state has budget rules that require lawmakers to balance revenues and expenditures. Vermont does not have any tax and expenditure limits. The state does limit total authorized debt and debt service incurred by the state.
(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)
Vermont’s current budget
Governor Scott released his FY 2024 budget proposal in January 2023. He has not yet given his state of the state address.
Vermont enacted its FY 2023 budget in June 2022. The enacted budget included $8.1 billion in total spending and $2 billion in general fund spending. Vermont also passed a major tax cut in calendar year 2022, Among other changes, the legislation created a new refundable state child tax credit.
Under the American Rescue Plan, Vermont will receive $1 billion in direct state fiscal aid and $142 million in local government aid from the federal government. As of January 2022, Vermont had spent part of its ARP funds on capital construction and broadband expansion.
According to NASBO, Vermont’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:
- FY 2022: $2.0 billion/$7.6 billion
- FY 2021: $1.6 billion/$7.3 billion
- FY 2020: $1.5 billion/$6.2 billion
- FY 2019: $1.6 billion/$5.8 billion
For more on Vermont’s budget, see
Vermont’s economic trends
Vermont’s per capita income (per the Bureau of Economic Analysis) was $63,206 in 2022, ranking 21st among the states. It was below both the national average of $65,423 and the New England regional average of $76,651. The state’s median household income (five-year estimate) was $67,674 in 2021, ranking 21st among the states and below the national average of $69,021. Vermont’s poverty rate was 10.5 percent in 2021 (five-year estimate), below the national rate of 12.6 percent.
Although Vermont’s averages tell a story about the entire state, Vermont is composed of diverse localities. For example, the city of Rutland’s median household income was $51,868, and its poverty rate was 12.2 percent; the city of South Burlington’s median household income was $83,750, and its poverty rate was 7.7 percent.
Vermont’s unemployment rate has historically been below the national average, particularly following the Great Recession, and in recent years it has been among the lowest in the country.
Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. However, Vermont does not currently have enough information available for the Bureau of Labor Statistics to break down its unemployment rate by race.