Editorial: Agenda setting

We reached out to area lawmakers to ask them to share their thoughts about the upcoming legislative session, which gets underway next week. (We will be publishing their answers later this week.)

There were common themes: education funding, concerns over the cost of health care, the state's need for more housing, and especially affordable housing. Ultimately, though, nearly all the lawmakers' responses boiled down to a central issue of affordability.

How to tackle the burden on Vermonters appears to be a matter of party politics, and will certainly begin playing out at the State House almost immediately. We would suggest that more middle-class residents are feeling the pinch. And while there are some very Vermont-specific factors — fees, health insurance premiums, higher utility rates and property taxes — there are broader reasons why more of us are living paycheck to paycheck than ever before.

We do not purport to have any magic solutions to the state's fiscal challenges, but we can attempt to inform, connecting some dots to explain why Vermont families have faced increasing challenges in maintaining their standard of living and financial security.

First and foremost is, actually, housing. Nationwide, it is one of the most significant factors pushing middle-class families to the brink of financial instability is the rapid increase in housing costs. Over the past few decades, home prices have soared, far outpacing wage growth. That is certainly true here in Vermont. According to the National Association of Realtors, the median sales price of existing homes in the U.S. nearly tripled from the early 1990s to the 2020s. This escalation in home prices has made it more difficult for first-time buyers to enter the market (anywhere — not just in Vermont), and for those of us who are already homeowners, it has meant higher property taxes, increased maintenance costs and more significant mortgages. Vermont is feeling it acutely.

Ask anyone who is trying to move to Vermont. The challenges are real. Renting has also become an increasingly expensive proposition — almost impossible in most corners of the state without a significant income to cover rent. Nationally, the rise of institutional investors in the rental market (purchasing large numbers of single-family homes and converting them into rental properties) has led to higher rents in many urban and suburban areas. In Vermont, we also saw a boom of homes sold during the pandemic (often for well above market value) for second homes or to make into Airbnbs. Valuable housing stock is no longer attainable. For middle-class families, the inability to afford a home or the exorbitant costs associated with renting create significant financial strain. While housing is typically the largest expense for any household, the burden of skyrocketing prices is particularly hard on most individuals wanting to move to Vermont. Recent U.S. Census data would suggest most of those migrating to Vermont are above "middle class."

To attract "average" home buyers and renters, we have to be able to pay workers adequate wages. We are falling short. Despite rising productivity, wages for many Vermonters have remained largely stagnant when adjusted for inflation. In the 1970s, a typical worker's wages increased at a pace that allowed families to afford a comfortable life with a single income. Over the past several decades, however, wages across the U.S. have failed to keep up with inflation and the cost of living, leading to a situation where both partners in many middle-class households must work to maintain the same standard of living. Throw the high cost of child care into this formula, and what people earn because even less significant in the grand scheme of home budgeting.

When it comes to wages, too, income inequality has increased, with the wealthiest individuals and corporations reaping the rewards of economic growth, while the middle class has seen relatively little improvement in their earning power. (If you want to know more about this, feel free to ask U.S. Sen. Bernie Sanders about it. He ran for president twice with income inequality as a key tenet of his campaigns.) We see it more and more: Corporate profits have surged, and executive compensation has reached record levels, while workers in middle-income brackets have not seen corresponding increases. Lawmakers are hearing about it left and right.

Where we see the financial impacts directly — as in our daily lives — is at the grocery store and in the cost of education. Over the last several years, inflation has been particularly high in essential categories like food, health care and energy. For many families, pandemic-era price increases that have not gone back down have stretched already tight budgets.

The price of food, for example, has been rising at an alarming rate. In 2022, food prices saw their largest increase in more than 40 years, putting additional strain on household budgets. Families that once had some flexibility in their spending now find themselves allocating a larger share of household income to basic needs. And Vermonters can tell you that health care costs continue to climb, with double-digit increases to premiums, out-of-pocket costs and prescription drug prices. No one should be forced to choose between eating, sheltering and providing health care.

The Clean Heat Standard, too, has brought the debate over fuel prices front and center into the affordability debate in Vermont. Many lawmakers referenced it as a target of a repeal for 2025.

Lastly, the rising cost of education undermines affordability in a host of ways. We know local school district budgets are under scrutiny. But college tuition, once a relatively affordable investment in future prosperity, has skyrocketed. According to the College Board, the average cost of tuition and fees at a public four-year institution in the U.S. increased by more than 200% between 1980 and 2020. While student loans have allowed many middle-class families to send their children to college, they have also resulted in a massive burden of debt that often takes decades to repay. That's debt families seemingly want to avoid. Higher education has also become unattainable for many.

All of these pressures are creating a vicious cycle. Families struggle to make ends meet. They are working harder than ever, and still have to make sacrifices. It is a sad state for the state.

If lawmakers are really listening to their constituents, they have some serious work to do. We hope they are listening to those who seated them. It may feel like business as usual at the State House, but it shouldn't be.