Economic Impact Review – Vermont’s Act 250

Vermont pioneered a cooperative approach to large-scale development on a statewide level in 1970 with Act 250, which arose in response to the arrival of Vermont’s first interstate highway in the late 1960s. Residents feared that the highway would lead to rapid, uncontrolled growth and ultimately the destruction of the state’s rural character and picturesque towns.

Act 250 requires developments of regional impact to obtain approval both from the local town and from one of nine regional commissions, known as District Environmental Commissions. In most cases, commercial developments require Act 250 review when they encompass ten or more acres of land, a threshold substantially higher than under Cape Cod’s rules.

Act 250 approval depends on meeting several conditions that focus on the project’s environmental and economic impact. In addition to the law’s criteria concerning water and air pollution, energy conservation, and soil erosion, Act 250 specifies that developments must not place unreasonable fiscal burdens on the ability of local governments to provide education and other services, must not exhaust the town’s ability to accommodate growth, and must be consistent with local land use policies. Act 250 discourages scattered development by requiring a project to be contiguous to existing settlements unless the tax revenue generated by the development exceeds the additional cost of public services required by the project. Act 250 also considers a development’s impact on scenic and historic sites.

Decisions by the state’s nine District Environmental Commissions may be appealed to the state Environmental Board and ultimately the Vermont Supreme Court. Members of both the district commissions and the state board are appointed by the governor.

Act 250 has limited the number of large-scale retailers in Vermont. The state was the last U.S. frontier for Wal-Mart, which built its first store there in 1995. Vermont now has four Wal-Mart stores, but as a result of Act 250, three of these are about half the size of a typical Wal-Mart and were located in existing buildings. In Bennington, Wal-Mart opened a 52,000 square foot store in a former Woolworth’s building, and, in Rutland, a 75,000 square foot store was located downtown. Most recently, Wal-Mart opened a 66,000 square foot store in Berlin. The store occupies a building that previously housed another department store.



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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.