When Vermont lawmakers passed Act 250 in 1970, supporters said the land-use law would protect the state from unchecked development. Now, more than five decades later, the legislature is back — not to repeal it, but to rewrite it. Act 181 is Act 250’s genetic modification: same regulatory organism, new instructions. Before Vermont encodes those changes permanently, a reasonable question deserves an answer: what has the original law already cost?
Proving a negative is always hard. The investment that never came, the factory that chose New Hampshire instead, the housing development whose permit costs made the numbers not pencil out — those don’t appear in any ledger. But that doesn’t mean the cost is unquantifiable. Using a methodology called synthetic control analysis — the same technique academic economists use to evaluate policy shocks — FYIVT built an estimate from public federal data. The floor is in the billions. The ceiling is unknowable. Here’s how we established the floor.
The Method: Building a Vermont That Didn’t Pass Act 250
Synthetic control analysis works by constructing a statistical twin of the treated unit — in this case, Vermont — using states that matched its economic trajectory before the policy shock. The logic is straightforward: if Vermont tracked closely with comparable states for the 20 years before 1970, and then diverged after 1970, the divergence is attributable to whatever changed in 1970.
The strongest comparison is New Hampshire. The two states share similar geography, similar pre-1970 economic profiles, similar rural character, and similar populations. Critically, New Hampshire enacted no equivalent land-use regulatory regime in 1970. It is the cleanest natural experiment available.
In the seven years before Act 250 — 1963 through 1969 — Vermont’s per capita personal income tracked at an average of 90.5 percent of New Hampshire’s. That ratio was stable. There was no pre-existing divergence trend. The two economies were converging.
🍁 Make a One-Time Contribution — Stand Up for Accountability in Vermont 🍁
The Divergence
After 1970, the ratio stopped recovering. Vermont never again sustained the 90-percent threshold for more than brief periods. By 2000, Vermont had slipped to 82.1 percent of New Hampshire per capita income. The 2023 figure is 84.6 percent.
The gap in dollar terms: in 2023, if Vermont had simply maintained its pre-Act 250 income ratio with New Hampshire, Vermont per capita personal income would be approximately $71,400. The actual figure is $66,800. That’s a gap of $4,632 per person — for every man, woman, and child in the state — every single year.
Multiplied by Vermont’s current population of roughly 647,000 people, the annual income shortfall runs to approximately $3 billion per year.
Cumulated from 1970 through 2023 in nominal dollars, the total foregone personal income — using only the NH counterfactual and only personal income, with no economic multiplier applied — comes to approximately $43 billion. Apply a standard 1.5x regional GDP multiplier to account for economic activity beyond direct personal income, and the estimate rises to roughly $64 billion. At 1.8x, it approaches $77 billion.
These are floor estimates. They account only for the income divergence. They do not capture foregone business investment, tax base erosion, the compounding effect of population that left and never came back, or the commercial and industrial development that went to competing states instead.
Manufacturing Tells the Same Story
The income divergence has a sectoral explanation. Manufacturing — the primary industry subject to Act 250’s most intensive permitting requirements for physical plant and site development — tells a parallel story.
Using Census of Manufactures benchmarks from 1963 through 1987, combined with Bureau of Labor Statistics data from 1990 forward, Vermont and New Hampshire manufacturing employment tracked within a consistent ratio before 1970. After 1970, they didn’t. New Hampshire manufacturing employment grew 36 percent above its 1969 level by 1987. Vermont’s peaked, stagnated, and has since fallen 39 percent below its 1969 base. Vermont has never recovered the absolute number of manufacturing jobs it held when Act 250 was signed.
Manufacturing matters here because it is the sector most sensitive to land-use permitting cost and delay. A 24-month permitting process and $200,000 in compliance costs don’t deter a hospital or a university. They do deter a manufacturer calculating whether to build a plant in Vermont or across the border.
What This Is — and What It Isn’t
This analysis does not claim Act 250 caused every dollar of divergence between Vermont and New Hampshire since 1970. New Hampshire’s tax climate, Vermont’s property tax structure, regional demographic shifts, and national manufacturing decline all played roles. The synthetic control methodology controls for national-level shocks by comparing two states that would have faced the same external conditions — but it cannot perfectly isolate a single policy.
What the data do show, clearly, is that Vermont’s economy diverged from its closest peer state beginning at the moment Act 250 took effect, in a direction and at a magnitude that has compounded for more than 50 years. The pre-treatment fit was tight. The post-treatment gap is large and persistent.
Vermont’s political culture has long treated Act 250 as costless — a shared sacrifice for the common good of environmental protection. The data suggest the sacrifice was borne disproportionately by Vermonters who never got the manufacturing jobs that went elsewhere, never got the housing that wasn’t built, and have spent five decades earning less than their counterparts across the Connecticut River.
The cost wasn’t zero. The floor is $43 billion. So far.
Methodology: Per capita personal income data sourced from the Bureau of Economic Analysis via the Federal Reserve Bank of St. Louis (FRED), series VTPCPI and NHPCPI, 1929–2024. Manufacturing employment sourced from Census of Manufactures benchmark years (1963, 1967, 1972, 1977, 1982, 1987) and BLS/FRED series VTMFG and NHMFG (1990–2024). Synthetic counterfactual constructed using the pre-treatment (1963–1969) Vermont-to-New Hampshire per capita income ratio of 0.905, applied to NH’s full time series. All dollar figures nominal. Analysis conducted by FYIVT.
Dave Soulia | FYIVT
You can find FYIVT on YouTube | X(Twitter) | Facebook | Instagram
#fyivt #Act250 #Act181 #VermontEconomy
Support Us for as Little as $5 – Get In The Fight!!
Make a Big Impact with $25/month—Become a Premium Supporter!
Join the Top Tier of Supporters with $50/month—Become a SUPER Supporter!
Subscribe to RSS
Leave a Reply