Obviously. You’re here, aren’t you?

(To any outsiders, you’re most welcome, but you are not the target audience here).

There has been a lot of grousing about Vermont’s “affordability.” But it’s hard to dispute that everyone who lives in Vermont can afford to live in Vermont. Otherwise, he or she would not be living in Vermont.

Which is not to say that everyone can afford to live easily, comfortably, or well in Vermont. Many can not.

But those same people probably couldn’t live all that well in New Hampshire, Tennessee, or New Mexico, either. All over America, comfort and ease are hard to come by for people who don’t earn much money.

But there is no convincing evidence that they are any harder to come by between the Connecticut River and Lake Champlain than, say, between Lake Michigan and the Mississippi or the Colorado and Lake Tahoe.

All this is to begin consideration of another chapter – the one entitled “Affordability” – in the 160-page Vermont in Transition report by St. Michael’s College professors Vince Bolduc and Herbert Kessel. (The chapter on agriculture was the subject of the March 31 post. The report was part of a project undertaken by the Vermont Council on Rural Development.).

For the last several years, of course, the discussion of “affordability” has been more than an academic or scholarly question in Vermont. It has been a political ploy, with Gov. Jim Douglas regularly describing his policy proposals as part of an “affordability agenda,” often suggesting that Vermont is less affordable than most states because of one state policy or another.

The report, though, found little evidence to support that contention. Vermont is more expensive to live in than most states. But so is the rest of the Northeast, especially New England.

“We are in a high-cost area of the country,” said St. Michael’s economics professor Herb Kessel, who wrote the chapter with his colleague in the Economics Department, John Carvellas. ” Lower middle income people suffer in all states.”

In all states, they are probably suffering more these days. Income inequality is increasing, even in Vermont, Kessel said (though not by as much as in most other states) and the report finds that “the growth rates in the four lower wage areas have fallen behind the state average as a whole.” For instance, in constant dollars, “real annual earnings for personal care and laundry workers (rose by less than) $500″ between 1988 and 2007.

Perhaps slightly off-setting that wage stagnation for many Vermonters is that they are more likely than their counterparts elsewhere to live in two-earner households. The state has a “relatively low divorce rate,” Kessel said, “and many more intact families” than do other states.

In at least one case, state policy is holding costs down. Vermont’s electric utility rates used to be higher than average, “but in the last year or so our rates are lower than our New England neighbors,” said Kessel. ” They all went to deregulation  in retail energy. We did not, and our energy costs are actually lower.”

Douglas and his allies claim that Vermont’s relatively high income tax rates and its strict development regulations make the state less affordable than most. The taxes, they say, discourage business growth, and the regulations raise the cost of housing.

Kessel did not dismiss either of those claims as groundless. Vermont’s relatively progressive income tax rates do mean that wealthier people probably pay somewhat more in taxes than they would elsewhere. And obviously the cost of complying with the regulations has to have some impact on the price of housing.

On the other hand, the economy (until the recession started) has grown, more people and more businesses have been moving into the state than moving out, and the number of wealthy taxpayers has been going up at a healthy clip.

Houses are more expensive than in many states. But, perhaps because  interest rates are low, they must be affordable because Vermonters are more likely than other Americans to be homeowners. Vermont’s “housing affordability ratio…is currently the best in New England,” the report said, adding that the  state “is near the top of the U.S. in the percent of owner-occupied shelter and has the least crowded housing. According to Statemaster.Com, the percentage of Vermonters spending more than 30% of their income on rental housing places the state among the lowest 10 states.”

But when it comes to home owners, a higher proportion of them spend more than 30 percent of their income paying on housing. Perhaps that’s because some of them bought houses too big for their budgets (or their needs?). All over the Northeast, the report said, the size of houses “began to increase more than houses in the nation as a whole.”

If environmental regulations kept the price of housing up, they also seem to have held the foreclosure rate down. “We get more rational development,” Kessel said. “We don’t have the over-supply of housing that we see in neighbors.”

As to taxes, they have been going up steadily, in the aggregate, “but taxes as a percent of per capita personal income shows no clear trend. Vermont continues to rank among the higher taxed states…but the progressivity of the state’s tax regime lowers the impact for Vermonters at the lower end of the income scale.”

And, presumably, raises it at the upper end. A Vermont household with a $250,000-a-yer income probably pays more in state and local taxes than its counterpart elsewhere. A $40,000-a-year household probably pays less. A $75,000-a-year-household? Oh, it probably depends on how big it is, where it lives, and other variables.

To some extent, Kessel said, taxes are always going to be fairly high in Vermont because it is a “very small state (with) a whole state government infrastructure that has to be maintained without (benefitting from) the economies of scale.”

But state policy does matter, Because of “a decision by the state not to force consolidation of public schools,” Kessel said, Vermont has many small public schools and the lowest pupil-per-teacher ratio in the country. That’s expensive.

While high taxes do make Vermont less affordable for some (if especially those who can best afford it), those taxes provide services that make the state more affordable for others. Ironically, the report notes that two costs that have “been rising much more rapidly than the incomes of Vermonters” are higher education and health care. Bringing down those costs would almost certainly require more public spending, possibly requiring higher taxes.

Affordability, it seems, doesn’t come cheap.

(One section of this chapter deals with the idea of the “living wage,” how many Vermonters don’t earn it, and what it would take to bring them up to par with it. A controversial concept that deserves its own treatment some day)