Eric Davis: Scott talks new issues, but not all


Last week, Gov. Phil Scott delivered his State of the State speech to the remotely assembled members of the Vermont Legislature. Many of Scott’s themes were a reprise of his five previous annual messages: Vermont needs more people and a larger workforce, economic and job development needs to be better balanced between northwestern Vermont and the rest of the state, and Vermont’s tax and regulatory structure makes costs for businesses and households higher than they need to be.

Along with this continuity, Scott emphasized some new themes this year. Unlike previous years, when he often stressed the need for fiscal austerity, the governor noted that the state’s coffers are now quite full. This is a result of both the strong performance of the Vermont economy recently and the infusion of federal funds into the state treasury from the CARES Act, the American Rescue Plan Act, and the bipartisan infrastructure bill enacted last fall.

Scott said that he wanted to work with the Legislature on a series of targeted investment programs using the state’s current surplus. More than in any of his previous annual messages, the governor stressed the need for more housing in Vermont, particularly affordable living accommodations for those households with incomes at and below the statewide median. Scott said that he was prepared to invest $180 million in state funds — far more than in previous budgets — in incentives for the construction and rehabilitation of low- and moderate-income housing.

The governor said that land acquisition costs, often made higher than they need to be by zoning and other regulations, were one of the main barriers to the construction of more affordable housing in Vermont. As he has said in previous years, Scott would like the Legislature to make some changes in Act 250 that would allow development projects to be approved more quickly and with fewer of what he considers to be procedural hurdles.

The governor held out the possibility of an income tax cut in his speech, particularly for retirees and former members of the military, and said he would provide more details on those proposals in his budget address later in the month. The Legislature has not acted on similar proposals from Scott earlier in his governorship. House Speaker Jill Krowinski said that while she will wait to see the details of Scott’s tax plans, her preference would be that any income tax cuts should be directed toward families with children. Many households in that category will be facing a federal tax increase in 2022 because of the expiration of the enhanced child tax credit program.

There are several important issues that Scott did not address in his speech. Other than acknowledging, and saying he respected, the Legislature’s decision to meet remotely for the first two weeks of the session, and stressing the importance of in-person learning for K-12 students, the governor had little to say about COVID-19 safety and mitigation measures. This was in spite of the marked increase in cases in the new year and the near-impossibility many Vermonters are encountering of obtaining supplies of at-home tests.

Additionally, the governor did not talk about two important policy issues on the Legislature’s agenda for 2022. The first involves the large unfunded obligation in the state employees’ and teachers’ retirement plans, and whether to use any of the current surplus to make up that deficiency. A related question is whether to make any changes in the retirement programs for new state and school staff going forward.

The second issue involves the state’s response to climate change. While Scott did acknowledge federal funding for weatherizing more homes and building out  infrastructure such as charging stations to support electric vehicles, he did not mention the state’s newly adopted Climate Action Plan. This plan, approved by the Vermont Climate Council in December, sets out ambitious goals for greenhouse gas reduction, many of which will require legislative action.

Eric L. Davis is professor emeritus of political science at Middlebury College.

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