Scott Lays Out Vision In Inaugural, Saving Specifics For Budget Address

Jan 5, 2017

In his first speech as governor of the state of Vermont, Republican Phil Scott outlined a four-pronged agenda that focuses on combating the state’s opiate “crisis,” growing jobs and wages, reforming the public-education system and balancing budgets without the use of new taxes or fees.

Promising to bring a “centrist” approach to his governing philosophy, Scott said he’ll bring structural reforms to state government that will yield the financial efficiencies needed to fill perennial budget shortfalls. And he said that by recruiting well-educated young adults to a state desperately in need of a more qualified workforce, Vermont can ignite economic development and “grow (public) revenue organically.”

“We must focus on creating more economic opportunity for all Vermonters,” Scott said during a 31-minute speech in the House chamber Thursday afternoon. “My administration will work to significantly reshape our approach to economic development, tying it more directly to our workforce expansion efforts.”

Scott’s inaugural address was broad in vision and short on specifics. He promised to “significantly reshape our approach to economic development,” for instance, but said lawmakers won’t see details of that plan until later this month.

Scott also announced a plan to overhaul executive-branch operations – he’ll create what he calls a “Government Modernization and Efficiency Team" – but it remains unclear still what areas of government he intends to reform, and how specifically they’ll change.

The focus on opiate abuse, economic development and fiscal restraint were all hallmarks of Scott’s campaign stump speech. But his emphasis Thursday on reforming Vermont’s K-12 education system was perhaps more than far-reaching than anything he articulated on the trail.

Scott said boosting insufficient funding streams for early-childhood education and higher education systems will require Vermont to reallocate some of the $1.6 billion now going to the public school system.

“We must rethink our entire education spectrum,” Scott said.

"We cannot continue passing budgets that grow faster than the economy or wages of working Vermonters. I will set clear limits that reflect the changes working families see in their own finances. I will not support or carry out experiments at taxpayers' expense." - Gov. Phil Scott

Scott went on to say that he wants an education system where local school boards no longer have to “focus your time … worrying about budgets, and tax rates you can’t control.” And he said he wanted superintendents to be able to “think creatively about how to optimize resources … instead of worrying about building management.”

It’s unclear how Scott intends to execute these reforms. Vermont Public Radio asked administration officials on Thursday evening whether Scott is planning to ask lawmakers to consider major legislation related to his education reform plan, or if his plan involves a restructuring of the education-financing system.

“The budget address will provide more detail on this,” communications director Rebecca Kelley responded. “Stay tuned.”

Scott will deliver his budget address on Thursday, Jan. 26.

House Speaker Mitzi Johnson said after Scott’s address that she had no idea what the governor might or might not have in mind as it relates to his proposed education reforms. She said she’s ready to listen to whatever proposals he has to offer.

“But I think we have to look very carefully. I haven’t heard from people asking for Montpelier to take more control over budgets at schools,” Johnson said.

As for reallocating K-12 school funding toward early childhood programs and higher education, Johnson said she’s not sure how Montpelier can go about making it happen “without more mandates.”

Johnson and Senate President Pro Tem Tim Ashe will lead the Democratically-controlled Legislature in its negotiations with the Republican executive. And both leaders signaled an interest in working with Scott on what they say could be shared priorities.

Gov. Scott's pledge not to balance the state budget or pay for new programs 'by raising taxes or fees' triggered one of the loudest standing ovations from House Republicans and supporters of Scott watching from the gallery. House Democrats stayed notably seated, most not even clapping.
Credit Angela Evancie / VPR

“I think Phil’s speech really highlighted one of the things that we all have known about him and all appreciate about him, which is not an ideological position that boxes the administration in to any one way to solve the problems that I think are commonly understood to be the priorities that need addressing,” Ashe said. “I didn’t hear a blueprint for how you address any of those priority areas, and yet he reemphasized his character traits that I think have made him so appealing in Vermont but have also made us all able to work together here.”

Scott did, however, box his administration in in one notable way.

When it comes to balancing the state budget, or paying for new programs, Scott said will do neither “by raising taxes or fees.”

“Vermonters do not have the capacity to pay more,” the governor said.

It was a moment in the speech that crystallized what could emerge as one of the fundamental disconnects between the Republican governor and a Democratically controlled Legislature. The line triggered one of the loudest standing ovations from House Republicans and supporters of Scott watching from the gallery.

House Democrats stayed notably seated, most not even clapping.

“I think you saw not everybody stood and jumped up,” Ashe said. “And it wasn’t because those people wanted to raise everyone’s taxes and fees ... it’s because sometimes policy making, especially when the state budget is disproportionately used to support low-income people and people who are having trouble fending for themselves in this economy, to have a hard and fast rule about anything is a little bit challenging.”

Johnson said she’s all for any exercise geared toward making government more efficient. But she said, having spent 10 years on the appropriations committee, she knows that’s easier said than done. And she said it’s premature to assume the state can solve its budget shortfalls without resorting to new revenues.

Also, Johnson said the state faces some potentially costly new obligation, namely funding a water-quality improvement plan needed to reduce pollution flowing into Lake Champlain and other waterways.

The Agency of Natural Resources has projected costs of more than $1 billion over the next 20 years to pay for that clean-up plan.

As for funding that new program with existing dollars, Johnson said, “I can’t for the life of me picture how you would do that without substantial cuts somewhere else.”

The water-quality issue, Johnson said, is a critical problem affecting one of the state’s key economic resources.

“And so would I be willing to think about some sort of revenue in order to make sure that generations hence have clean water to drink, for tourism, for recreation,” Johnson said. “I’m willing to have that conversation and I’m sorry that he’s not at this point.”