Updated on January 29, 2025.
Gov. Phil Scott outlined his proposed $9 billion budget on Tuesday, saying it would prevent another increase in property taxes for education. After a 14 percent average statewide increase last year, the governor said he wants to keep property taxes flat until education reform efforts bear fruit.
Democrats reacted with skepticism about just how the governor plans to achieve that, with some delivering sharp criticism.
In order to prevent a projected average 5.9 percent increase in property taxes next year, Scott is proposing to move $77 million in surplus cash from the general fund to the education fund. He also wants to eliminate an $18.5 million program that ensures all 83,500 public school children in the state eat for free, regardless of the income level of their family.
Supporters say the universal meals program ensures all kids are fed so they can focus on their studies. Scott argues that the program gives free food to kids from families who don’t need the benefit.
“My sense of the Senate is we’re not going to follow him on that,” Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) said. “Typically speaking, Democrats do not support lowering property taxes by taking food away from kids.”
That’s just one topic that Scott and lawmakers will likely clash over this session as they grapple with systemic problems.
Scott argued in his budget address that he and lawmakers should work together to enact major reforms that could not only make dysfunctional systems more affordable but also more effective.
“Taxpayers made it clear they want us to fix broken systems, not just fund them,” Scott said. “So, I will forward four bills that address housing, public safety, education and affordability to improve in each of these areas.”
The state is enjoying unexpectedly strong revenues due to a robust economy. Total revenues were 3.7 percent above forecasts for the year, economists told lawmakers last week. Corporate and personal income taxes are up, as are vehicle sales.
But Scott warned lawmakers not to assume that the higher revenues meant there was much more to spend.
“Even with a strong economy, balancing this budget wasn’t easy,” he said.
The state needs an additional $133 million next year just to “keep the lights on,” Scott said, meaning little money exists for new programs. “So even with a surplus, we can’t do everything we want,” he said.
One thing he does want to do is address the housing crisis by making some one-time programs permanent. He’s proposing to spend $4 million every year on the Vermont Housing Improvement Program. It helps investors rehab substandard homes, which abound in a state with older housing stock.
He also wants to spend $30 million to help fund the construction of homes affordable to middle-income residents, $9 million to help cities and towns build infrastructure needed for housing, and $2 million to help people repair mobile homes.
Scott did not limit his address strictly to budget matters, however. He also outlined a host of public safety reforms that he said would make people feel safer.
Crime rates, he said, are soaring, citing a 40 percent increase in aggravated assaults since 2018, a doubling of motor vehicle and retail thefts, and a 40 percent increase in shoplifting between 2022 and 2023 alone.
“These crimes impact our communities. They hurt our retails and downtowns. And customers, residents and visitors are staying away,” Scott said. “I believe one solution is more accountability.”
He laid out a host of changes to the criminal justice system, one of which is repealing a law allowing 19-year-olds to be treated as juveniles. Scott said the system isn’t set up to handle these offenders.
Other initiatives include making it easier to revoke bail and hold repeat offenders accountable for their crimes.
“Enough is enough. Let’s fix it,” Scott said, delivering one of several lines that received a standing ovation.
On climate change, Scott, who once embraced the framework of the landmark Paris Agreement, now argues that the state’s versions of those climate deadlines are “arbitrary” and unmeetable. He wants to change the Global Warming Solutions Act to calculate climate emissions differently and to remove the teeth from the law — the ability for people to sue Vermont if the targets are not met.
Instead, he said, he’ll direct the Agency of Natural Resources to come up with a more “practical plan” to reach the climate goals by 2050.
Sen. Anne Watson (D/P-Washington), the new chair of the Natural Resources and Energy Committee, said she was struck by Scott’s reference to emissions reduction deadlines as “arbitrary.” They are, in fact, deeply rooted in widely accepted climate science and therefore must be adhered to, she said.
“We’re not going to go backwards on climate,” Watson said.
One climate initiative Scott proposed might hold promise, however, she said.
He wants to direct $15 million of the surcharge on electric bills now received by Efficiency Vermont to be used for emissions-reduction work. That’s something Watson said she can get behind.
“I would like to make Efficiency Vermont’s mission more climate change-oriented,” Watson said.
From her perspective, however, $15 million is far from what’s needed to meet the climate emission requirements, which leaves her with lots of questions.
“All of his suggestions were rollbacks,” Watson said. “So when he says he wants real climate solutions that Vermonters can afford, I want that, too. But my two- word response to him is: ‘Like what?’”
House Speaker Jill Krowinski (D-Burlington) said she welcomed the governor’s ideas about how to make the state more affordable, including making sure “our kids can get the best education at a price we can afford.” But some issues of concern to Democrats went unaddressed in his speech, she said.
“I am disappointed that we didn’t hear more on health care,” she said, noting that rising health care costs are affecting budgets across the state. “I think that is a critical piece that we need to hear from the governor on.”
This article appears in Jan 22-28, 2025.
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