MONTPELIER — Gov. Phil Scott last week signed an expansive $7.35 billion state budget that, buoyed by federal Covid-19 relief funds, invests heavily in broadband, affordable housing projects and measures to fight climate change.

This year’s spending package benefited from a financial windfall produced by the federal American Rescue Plan Act, providing the state with more than $1 billion and the flexibility to use the money to respond to the coronavirus pandemic and fund infrastructure projects.

The budget allocates $599 million of those federal funds, including $150 million for broadband expansion, $120 million for clean water projects and $52 million to update aging state information technology infrastructure.  

The budget also directs a combined $190 million in state and federal dollars to affordable housing and efforts to relocate people experiencing homelessness from the hotels and motels where they’ve lived during the pandemic. Another $50 million is earmarked for climate change measures, including nearly $20 million for weatherization projects.

In a statement, Scott said that this spending bill puts Vermont on the road to economic recovery as well as setting the groundwork to fix “longstanding challenges” — including a workforce shortage and getting all homes connected to high-speed internet — that the state has faced for years.

“This is a truly transformational budget,” Scott said. “With smart state investments and a very strategic approach for using federal funds, this budget puts us on a new path to a more prosperous and equitable future for all of Vermont.”

Scott also signed off on a broadband bill, which will use $150 million to expand internet access throughout the state.

The legislation, H.360, makes communications union districts a centerpiece of the state’s efforts to extend fiber networks to rural areas that lack adequate internet service.

Communications union districts are community-owned fiber-optic networks that serve multiple towns. The Vermont Legislature established a legal framework for them to operate in 2015, and more than a dozen have been formed or are under study, covering much of the state.

The new law will give communications union districts and small private internet providers access to the $150 million so they can work to expand broadband to areas of the state that are not served. 

The Vermont Community Broadband Board, a new governmental entity, will be responsible for managing the broadband money and providing resources for the communications union districts.

Throughout the legislative session, the governor and Democratic leadership in the Statehouse agreed about making broadband buildout a top priority as well as crafting a budget that addresses short- and long-term issues in Vermont.

While Scott and lawmakers faced some technical disagreements over how the $1 billion in federal money should be spent, they generally agreed on the major investments they would like to make in the coming years.

Scott thanked the Legislature for its “partnership” in working on the sweeping state budget and that it has ensured that Vermont is making the “most of the once-in-a-lifetime opportunity” that comes with a $1 billion influx of federal money.

“We showed that good, balanced bipartisan government can truly make a difference for the people and state we serve,” Scott said.