Vermont Economy Shows Steady Results as AI Spending Lifts National Growth, Officials Warn of Risks

Analysts emphasized that AI is carrying the economy with considerable danger attached.

Vermont’s finances ended the 2026 fiscal year in solid condition, according to the state’s top economists, who told lawmakers and Gov. Phil Scott on Tuesday that revenue landed almost exactly where they had expected. The latest figures showed the General Fund, Education Fund and Transportation Fund together brought in 1.2% more than forecast, or about $44 million, over the year that began July 1, 2025 and ended last month.

The state’s economists said that result suggests Vermont is holding steady even as federal policy choices create uncertainty for the broader economy. In a written assessment, they pointed to immigration restrictions, mass deportations of immigrant workers, tariff disruptions and overseas conflict as factors that have made conditions less stable and more costly.

Tom Kavet, one of the economists, told the Emergency Board that the fiscal outcome was encouraging, though the gain amounts to only a small share of Vermont’s roughly $9 billion annual budget. He said the state is managing to stay on track despite a difficult national environment.

The report also identified a major source of support for the U.S. economy: the huge amount of money flowing into artificial intelligence development. Economists said that wave of corporate investment has helped keep economic growth and the stock market moving, and that some of the resulting wealth has reached Vermont consumers as well. They also noted that the state collected record personal income tax revenue over the past year, topping what had been projected.

Still, the analysts emphasized that AI is carrying the economy with considerable danger attached. They warned that investment is concentrated in a limited number of companies that are racing to build similar products, creating the possibility that a setback in the sector could spread widely through financial markets and the broader economy.

They also said the benefits are being captured unevenly, with recent stock market gains concentrated among the wealthiest 1% of households, which own about 50% of all stocks.

After the meeting, Scott said the concerns raised in the report reinforced his view that the companies building AI tools need tighter oversight. He had vetoed a bill in May that would have established a state regulatory system for large data centers, including facilities that could support AI development. He said any meaningful rules would likely have to come from federal authorities, and possibly international ones, rather than from Vermont alone.

The Emergency Board, which reviews the state’s financial condition twice each year, has heard a similar message at recent meetings: Vermont’s outlook remains stable for now, even as the larger picture is unsettled.