BRATTLEBORO-This year, the Legislature will be concerned with economics, more economics and then, yes, even more economics. As the second half of the Vermont Legislature’s 2025-26 biennium began on Jan. 6, this refrain was on everyone’s lips: “This will be a hard season.”
It certainly was on the lips of Rep. Emilie Kornheiser (D-Windham-7), and she should know. As chair of the House Ways and Means Committee and chair of the Joint Fiscal Committee, she has her pulse on the economics of government.
Or, as she put it while speaking to a legislators’ forum at Brooks Memorial Library a few weeks ago, “I’m able to get a bird’s-eye view of everything we do. And these are really hard times for government. They’re really hard times for Vermonters and for Americans.”
Economics is at the heart of the problems.
“As someone who loves our community deeply, my focus this session is stability,” Kornheiser said. “Keeping each of us safe. Keeping the lights on. Making sure we can pay our bills.”
Can Vermont pay its bills? Going back a few years, Kornheiser told the Brooks’ audience, the U.S. was seeing an economic expansion.
“Across the country and in Vermont, we have seen really record economic growth in a lot of ways,” Kornheiser said. “That is starting to slow. That’s related to the aftermath of the pandemic, responses to inflation, all of those things.”
Meanwhile, “we had record revenue growth for the state of Vermont, which gave us record opportunities to do things, to make a difference for Vermonters, to try to fix some of our really long-standing structural problems,” she said.
That economic growth was not universal.
“Economists describe that particular type of economic growth as ‘an alligator chart,’” she said. “Some people experience high economic growth, like the top jaw of an alligator. And the rest of us experience low economic growth, like the alligator’s bottom jaw.”
For Vermonters, “things were pretty hard here, even before the current political moment that we’re in,” Kornheiser continued.
“We had a lot of long-standing demographic, structural, cultural problems, and we were really at the breaking point of needing to grapple with them,” she said. “We were starting to grapple with all the revenue that we had available to us.”
For many years, Vermont did well in attracting federal dollars, but that was because now-retired U.S. Sen. Patrick Leahy had the political seniority and clout to funnel federal money toward his home state.
“We were building programs for the future,” Kornheiser said. “We were building structural change.”
The state is looking at potential loss of revenue from the economic slowdown and “because of our connection to federal tax law,” she said. With Vermont income taxes based on federal taxable income, changes in federal income tax policy affect the state’s coffers.
Now Vermont is seeing enormous cuts coming from the federal government, and the state is dependent on federal dollars at a time of “tremendous instability in our relationship with the federal government,” she said.
“We receive much more money in federal dollars than we send in our federal taxes as a state,” Kornheiser said. “With the Trump administration, particularly, with the budget legislation that passed in the beginning of the summer, there is significantly reduced revenue coming to the state of Vermont.”
Drastic changes in Medicaid — the consequences of the One Big Beautiful Bill Act enacted last summer — are going to impact us soon, Kornheiser said.
“That has an impact on Vermonters directly,” she said. “They are going to lose their health insurance because they’re not going to be able to fill out their paperwork.”
The state also faces “a really significant reduction in revenue,” Kornheiser added. “A large portion of our budget comes from Medicaid dollars that we spend all over the state — to our schools, to community partners, to all those things.”
Vermont is also going to see a big reduction in funding for SNAP (Supplemental Nutrition Assistance Program, known in Vermont as 3SquaresVT and still commonly called “food stamps”).
The state also anticipates losing federal money for climate solutions, “and climate solutions save Vermonters money in addition to helping the wider world,” Kornheiser said.
Right now, she said, “all attributable growth in the economy is coming from a single sector: artificial intelligence.”
AI’s labor growth, revenue growth, and stock market growth will have an impact on only a small subset of the population.
“This makes it a really, really fragile economy,” Kornheiser said. “And that’s important to know, because with so much of what we do in the state, we need to rely on regular revenue, not just one-time revenue, to get stuff done.”
Vermont is now entering a period of scarce economic resources, Kornheiser said.
Some of the things Kornheiser said she will be fighting for this year: separating Vermont’s corporate tax code from the federal code; closing loopholes that federal changes opened up; and “doing my darnedest to prevent our state from becoming even more unfair.”
Also needing to be done, she said: stabilizing systems that Vermonters rely on every day, like food stamps. Making the bureaucracy easier to navigate. Protecting our schools and hospitals. Continuing to work on education reform.
“We owe it to each other to understand what is changing, where the risks are, and how we truly want our state to show up for people,” Kornheiser said.
“Change is coming whether we want it or not,” she added.
Kornheiser called on her constituents “to protest and collaborate, to imagine what’s possible and to push back against what’s unacceptable.”
“Too many folks in our state are struggling to afford or access health care,” she said. “Immigrants and older Vermonters are scared of what comes next. I’m committed to doing the work with clear eyes and a focus on what’s next.”
Every committee in the Legislature will be working in this new environment of economic instability, Kornheiser said. This is why legislators have been calling this new session a hard one.
“Each committee is going to be grappling with both this sort of economic instability, reduced economic opportunities, and an obligation — a responsibility for us to do absolutely everything we can to make sure we’re protecting Vermonters, protecting Vermonters’ basic human rights, protecting Vermonters’ economic well being, and making sure that, if the federal government’s coming for us, the state’s doing absolutely everything it can to protect us,” she said.
Very few legislators ran for office to “hold the line or keep the status quo,” she said.
“They mostly ran because they wanted to make Vermont better,” Kornheiser said. “But most of them now — Republicans, Democrats, and independents — need to work to protect the advances Vermont has already made.”
She believes that the Windham County state legislative delegation “is deeply committed to that, and I also know that the vast majority of my legislative colleagues are,” she said. “And I would even say that’s mostly true across party lines.”
She said that much of this session’s activity will be “fighting to hold the line.”
“None of us is willing or interested in going back on the work we’ve done on climate change, on protections for trans folks and queer folk in our community, for basic health,” Kornheiser said. “That’s what we’re all going to be up there fighting for, and we’re going to be doing it under some pretty wild circumstances.”
This News item by Joyce Marcel was written for The Commons.