PROJECTVermont

State Fiscal Briefs

May 2022

Looking for Vermont data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

Vermont’s budget basics

According to the National Association of State Budget Officers (NASBO), Vermont’s total expenditures in fiscal year (FY) 2021 were $7.3 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 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 $7.8 billion in FY 2019 (the most recent year census data were available), or $12,551 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 $10,161.

Vermont’s largest spending areas per capita were elementary and secondary education ($3,490) and public welfare ($2,985). 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 $7.7 billion in FY 2019, or $12,284 per capita. National per capita general revenues were $10,563. Vermont uses all major state and local taxes. After federal transfers, Vermont’s largest sources of per capita revenue were property taxes ($2,938) and charges ($1,476), such as state university tuition and highway tolls.

Vermont’s politics

Governor Phil Scott, a Republican, was elected in 2020 with 67 percent of the vote. The next gubernatorial election is in 2022 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 (92 Democrats to 45 Republicans and 12 independents) and Senate (21 Democrats to 7 Republicans and 2 independents). The entire legislature is up for election in 2022 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 2023 budget proposal and gave his state of the state address in January 2022.

Vermont enacted its FY 2022 budget in June 2021. The enacted budget included $7.4 billion in total spending and $1.8 billion in general fund spending. According to the governor, the general fund total is a 6 percent increase over the previous fiscal year. in June 2021. The enacted budget included $7.4 billion in total spending and $1.8 billion in general fund spending. According to the governor, the general fund total is a 6 percent increase over the previous fiscal year.

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 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