This is an excerpt from the Campaign for Vermont Jan. 23, 2023, legislative update.

Governor Phil Scott presented his FY2024 budget to the Legislature on Friday, calling on them to help rejuvenate small towns during the 2023 legislative session, following up his call to action in the inaugural address from a couple weeks ago. The governor’s $8.4B budget is generally broken up into the following categories:

• $2.3B in General Fund spending
• $2.1B in Education Fund spending
• $335M in Transportation Fund spending

It would also:

• Fully funds pensions to the tune of $444M.
• Lays out $108M in capital investment.
• Continue allocating $1B in ARPA funds drawn down over the last two years for broadband; water, sewer and stormwater; climate change; housing, and economic revitalization.

The proposed budget would direct surplus and growth funds towards one-time expenses and Initiatives, because, as Scott puts it, “if we allow the base budget to grow with temporary and unsustainable revenue, we will create a cliff when these stimulus dollars go away — putting us on a path that eventually leads to deep and painful cuts.”

He highlighted the importance of trying to leverage the historical amount of federal aid available to sates currently, levels which have not been seen since the New Deal nearly a century ago. “Over my life,” he said, “I’ve found that spending money is actually pretty easy. But investing it to get the best return is much more difficult … But to draw down this money, we must be able to pay our state share. So, my budget commits $150 million to take full advantage of these federal programs.”

He reiterated that there are many projects that “have been on the books for decades” and we now have a chance to complete them. He warned the legislature that he feels “very strongly about this strategy” and to keep that in mind as they go through their process.

Without mentioning the Climate Council or the Climate Action Plan directly, Scott’s budget dedicates $900M in funding to “our Climate Office to develop a real plan, outlining exactly what work needs to be done, on what timeline, and at what cost. And we’ll bring this plan back to you, so everyone can see the details.” A subtle dig at the lack of details or analysis provided by the climate council’s plan the legislature is currently debating.

Less subtly, he followed with “like roads, bridges and buildings, the Legislature has an obligation to debate and vote on these specifics, in bill form, and then send it to the Governor for action. Real plans get real results, so let’s join together to do what we’ve done with transportation projects, capital projects and clean water – and do this work right.”

Scott also proposed addressing mental health challenges by increasing capacity for residential treatment. This effort would first start in the Northeast Kingdom, but then spread across the state. The Administration would dedicate $10M to help communities “unify the work of local public safety and human services teams on the ground.”

Even though he is recommending putting another $26M towards General Assistance housing, Scott stressed that this is meant to be transitional housing and we need to continue to build affordable housing. Two tools he identified to work towards this are VHIP and Healthy Homes Initiative. He is recommending investing $21.5M towards VHCB and $20M for a “missing middle” revolving loan fund. Finally, he is putting $500 towards helping municipalities updating their zoning laws and strongly encouraged the legislature to update state regulations as well.

This budget makes an additional ongoing annual investment of $56M per year to expand access to and affordability of child care. To further our workforce development efforts, Scott proposed another $2.5M in annual base funding, $19M in one-time investments in infrastructure, and another $10M in a two-year pilot program to cut CCV tuition in half. An additional $6.4M would go to the 802 Opportunity program to give low-income Vermonters access to free courses.

Scott again proposed a $17M tax relief package that would fully eliminate the tax on military pensions. It would also expend the social security tax exemption for seniors and leverage to Earned Income Tax Credit to put reduce the tax liability for working families.

He described his budget as “focused on investing, not just spending, to get the best results and grow revenue, so we can move families and communities ahead.”