I would suggest looking at the way town boundaries in mass are. I believe that each boundary segment is a way, and town boundaries are a relation. Is that what you are intending to do?
Have you confirmed that the state boundary in osm matches the outer boundary of towns? Is Vermont like Mass, in that every bit of land is in exactly one town? Do the Vermont state people think that the state boundary is exactly the outermost town boundary, or is there somehow land in Vermont not in any town?
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