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Joint Fiscal Office reviews Basic Needs Report and new livable‑wage method
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Summary
The Joint Fiscal Office briefed the Ways & Means Committee on the Basic Needs Report, explaining statutory categories, recent methodological changes and the new household basis for the official livable wage.
Pat Titterton, Joint Fiscal Office staff, briefed the Ways & Means Committee on the office’s 2024 Basic Needs Report and recent methodological and statutory changes to the state’s livable‑wage calculation.
Titterton told the committee the Basic Needs Report is a biennial, statutory required calculation that sums costs for essentials defined in statute—“food, housing, transportation, childcare, utilities, health and dental care, taxes, rental and life insurance, personal expenses and savings”—and estimates an hourly wage needed to cover those costs without public assistance.
The report includes some spending categories not explicitly listed in statute. “Clothing, telecommunications and, new for this report, personal care products” are treated as basic needs, Titterton said, and were added after technical advisory and Joint Fiscal Committee review. He said the report is intended as a reference point, not a legal mandate or a minimum‑wage setting tool.
Titterton described a set of seven household configurations the JFO models. A key recent statutory change enacted during the 2024 session makes the single person living in shared housing the statutory basis for the official livable wage; previously the standard used a two‑adult, no‑children household. He said JFO now publishes separate urban and rural livable wages rather than averaging the two.
JFO defines “urban” for the report as Chittenden County and “rural” as the rest of the state. For housing costs the office uses U.S. Department of Housing and Urban Development rental data and selects a mid‑percentile (neither top‑tier nor dilapidated) rental unit in the relevant geography. For food budgets the office follows U.S. Department of Agriculture guidance, and the report incorporates childcare subsidies (the Child Care Financial Assistance Program) where those subsidies apply.
Titterton said methodological changes approved by JFC and the advisory committee include updating telecommunications assumptions to reflect cell‑phone‑only households, adding personal care products as a spending category, and revising the household configuration assumptions (including moving to an average adult food budget instead of assuming the adult was female). He said most technical changes required JFC approval and most were approved; two proposed statutory changes were handled by the Legislature.
The report compares the calculated livable wages with Vermont’s minimum wage (which is adjusted by consumer price index), the federal minimum wage and federal poverty thresholds. Titterton showed the office’s most recent comparison in which the previously statutory local wage for the two‑adult household type ran roughly $3 above Vermont’s minimum wage historically; for the latest year he cited a Vermont minimum wage of $13.67 and a local livable wage example of $17.41 for the previously used household type.
Titterton described how inflation and the timing of childcare subsidy expansions affected changes from the 2022 to 2024 calculations: households whose budgets include large childcare subsidies saw some declines in the calculated budget between 2022 and 2024, while other household types—particularly those with large housing or health‑care cost increases—saw substantial increases. He noted transportation costs can be higher in some rural areas while housing is generally higher in Chittenden County.
Committee members asked clarifying questions about assumptions (for example, why savings differ between urban and rural figures and whether debt is included). Titterton said savings in the model are set equal to 5% of the annual budget and confirmed the report does not account for credit card debt or student loans. He also said the JFO relies heavily on survey data and that Vermont’s small sample sizes can limit geographic granularity.
No formal action was taken during the briefing. Titterton said the next report cycle will begin ahead of the next biennium and that JFO can provide comparisons to actual wages or additional historical charts if requested.
