As he kicked off his fifth term leading Vermont, Gov. Phil Scott on Thursday used his inaugural address to preview his two top legislative priorities: creating new housing and reforming the state’s education funding system.

Before a packed House chamber, the Republican governor said voters believe the state has gone in the wrong direction. The solution, he indicated, was collaborative policymaking with a Legislature dominated by Democrats, focused on areas he said were long overdue for change.

Those changes, Scott said, would impact not just already thriving northwestern Vermont, but the state’s rural corners. Lawmakers who represent towns outside the state’s economic hub, what Scott called “left-behind communities,” make up a majority, he noted.

The governor spent much of his speech addressing rising education spending, which he said needed immediate attention. Part of the problem, Scott said, was the state’s idiosyncratic funding formula.

“Let’s have the courage to fix the entire system,” he said, rather than just “tinker.”

Scott has faced criticism from Democrats in recent years for not bringing fresh ideas to the table. But in his inaugural address, Scott promised his administration would offer major proposals, including a new funding formula, a simpler school governance structure and guardrails for local communities to reduce cost pressures.

In all, the ideas would represent a “multi-year plan to transform education,” and he said he expects to present the ideas in two weeks alongside his budget recommendations.

On housing, Scott suggested a “creative expansion” of Vermont’s Tax Increment Finance system, which helps municipalities fund infrastructure development. He also called for expanding Act 250 exemptions, which passed last year, to include rural communities.

Quoting a housing advocate, the governor said it’s time the state “legalize housing” through regulatory reform and changing the onerous appeals process.

Asked about the governor’s speech, Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, said he thought the governor was “spot on” by underscoring the need to seize the moment for bold change.

Big change in education wouldn’t come easy, Baruth acknowledged.

“I’m sure there are people organizing, even as we speak, to defend against this or that change in the system,” he said. “What I think is different now is that the governor, and, I think, leadership in the House and the Senate, are actually truly on the same page when it comes to the need to, if not fully replace the system, then overhaul it.”

Baruth’s counterpart in the House, Speaker Jill Krowinski, D-Burlington, said in an interview that she was feeling “optimistic” about the session and the potential for collaboration.

“We don’t have a choice. Vermonters are expecting us to come to the table, roll up our sleeves and get things done together,” she said. “It takes legislators and the governor holding firm together, locking arms, saying, ‘We have to make bold changes this session.’”

Scott, one of the nation’s most popular governors, first took office in 2017. This session, his fellow Republicans will hold more sway in both chambers, with increased numbers and committee leadership positions, thought Democrats and Progressives still hold firm majorities.

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Read a full transcript of Gov. Scott’s speech by clicking here.

Gov. Phil Scott takes his oath of office from Vermont Supreme Court Chief Justice Paul Reiber at the Statehouse in Montpelier on Thursday, January 9, 2025.
VTDigger photo/Glenn Russell