We heard from developers, both subsidized and market rate, this week that things need to change if we are going to hit our target of 7,000 new units of housing annually. It's not one thing, it's all the things. Lengthy appeals processes delay projects and drives up costs. The cost of materials skyrocketed during Covid and has not come back down. The shortage of labor is really impacting both the cost of doing business as well as construction times. Cost of financing development is also too expensive, particularly for developers as they can face interest rates double that of homeowners to cover construction costs.

The Act 250 exemptions do seem to be moving the needle while the new regulatory framework (Act 181) is being drawn up. Even so, it's not enough. We are a long way off from the necessary housing production - less than 2500 permits for new construction were issued in 2023 (the most recent data available).

Education

We learned more details this week a new school choice mechanism that is both an opportunity and a potential problem. While potentially expanding choices for parents statewide and providing individual accountability mechanisms, the system could leave students in "public school deserts." Several parts of the state with a strong history of school choice often do not have any public high schools. Much of the Northeast Kingdom and all of Grand Isle County are in this boat. Putting the power to designate schools into the hands of, what are likely to be, highly political regional boards could leave some students assigned to a school over an hour away from their home. Additionally, students currently in a tuitioning district could loose access to their school if this system goes into place overnight.

There was also more discussion about using the Education Quality Standards to implement a minimum class size target for schools. This is much-needed as roughly 80% of our education expenses are tied up in schools. Also, our research indicates that this is the most significant cost-driver in our education system. The Vermont Superintendent's Association proposed a minimum class size of 15 students for grades K-5 and 18 students for grades 6-12. This is a significant departure from our current class sizes which average around 10.2 students. They also believe the ideal district size should be between 2-4k students.

Regardless of the end-game of the Vermont education system. Local school leaders don't seem to be getting the message. After $115m in projected school budget increases were projected in December, the Agency of Education has revised that number upward by $12m based on what they are hearing from school budgeting processes. This means the increase on taxpayers will effectively be HIGHER than last year. I wrote a commentary in December explaining this (of course back then the increase was roughly equal to last year).

Government Ethics

A group of legislators is leading a charge to roll back some of the ethics oversight that we have been working to strengthen over the past several years. They introduced H.1 which challenges any sort of independent oversight over legislators when an ethics complaint is filed. Current law allows the House and Senate ethics panels to determine punishment for ethics violations, but requires they consult the independent Vermont Ethics Commission on how to interpret and apply the statewide code of ethics.

These Legislators are seeking to remove even that limited requirement:

Rep. Martin LaLonde
Rep. Brian Cina
Rep. Carol Ode
Rep. Laura Sibilia

On behalf of Vermonters,