MONTPELIER — Gov. Phil Scott on Thursday laid out numerous budget priorities for Vermont ranging from a vaping tax and clean water funding to electric vehicles and Act 250 exemptions for developers.
The governor’s third budget address appeared to be better received by legislators than his last two budget addresses, based upon the volume of applause.
In a speech delivered from the House chamber, Scott presented a balanced fiscal year 2020 budget that is up slightly from last year’s proposal of nearly $6 billion. As described by his staff beforehand, the address was aimed at pitching reforms to expand the economy, reverse demographic trends, increase the labor force and turn the state’s education system into the best in the country.
While the governor struck a mostly optimistic tone, he didn’t say all is rosy in the Green Mountain State. In particular, Scott sounded the alarm about the state’s aging labor force, saying that “every county except Chittenden has seen a decline in the number of people working. Every county, including Chittenden, has fewer people available for work.”
Right out of the gate, Scott delivered details on his proposals, starting with water cleanup. He reaffirmed his plan to make Vermont’s water cleaner, including Lake Champlain.
“It’s not an exaggeration to say that the 20-year, $2 billion project ahead of us is as much a major infrastructure and jobs program as it is essential environmental policy,” Scott said.
Scott noted that $19 million in federal funds plus $48 million outlined in his budget will be used to fund clean-water-related infrastructure projects.
The clean water proposal includes using $8 million in ongoing revenue from the estate tax to go to the Clean Water Fund.
Next the governor returned to the themes of his first administration, such as the call to make Vermont more affordable.
More affordable housing and ‘no’ to land gains tax
This included funds to revitalize vacant homes and underused downtown areas.
“Another area where we’ve agreed is the need for more housing that’s affordable,” Scott said. “I’m sure you hear it as much as I do from young families trying to find that first affordable home, seniors looking to downsize and even employers trying to recruit workers.”
To help remedy vacant and blighted properties that are hurting property values, he proposed eliminating the land gains tax that was pass in the 1970s to stop rapid housing and development speculation.
Scott said that when a property owner sells within six years of purchasing, there’s the likelihood of a substantial penalty.
“Eliminating this tax will reduce a major barrier to investment in our neighborhoods, create more capacity, and increase grand lists as low-value properties are restored to their full potential,” he noted.
Scott also called for making properties more efficient.
“Eighty percent of our housing stock is at least 40 years old, and nearly half of that is 80 years old,” he said. “We know the cost to heat these older homes can push them out of reach for some. So, my budget includes $1 million to restore these units if weatherization is part of the project… let’s continue to make these areas attractive places to put down roots by increasing the Downtown and Historic tax credit to $2.6 million.”
Attracting new workers
On the issue of bringing more people to the state, the governor championed the paid family leave plan he announced last week with New Hampshire Gov. Chris Sununu.
“Our proposal would provide universally accessible and competitively-priced plans for all employers and employees in both states,” he said, adding that his plan would be reliable, easy to set up, and no additional cost to taxpayers.
Education and child care
Continuing with the theme of attracting new residents, Scott proposed a push to make Vermont education “the very best in the country.”
“Combined with our quality of life, good jobs and working to make Vermont more affordable, this could be the most effective economic development tool we could ever ask for. It’s an alignment of assets and priorities to accomplish what most of us have told our constituents we would do: give every family, in every community, the chance to succeed and prosper. It would also enhance our brand.”
The governor’s budget increases funding for Vermont Student Assistance Corporation non-degree grant program by over $1 million. He also proposed $3.2 million more for Vermont State Colleges and $700,000 for University of Vermont to replace declining Medicaid revenue.
“With this funding, the state colleges will stop a planned 3 percent tuition increase on Vermonters for this coming school year. It will also support the creation of an associate degree program, delivered in at least three tech centers throughout the state, where students earn the first year of their degree as a high school senior and the second as a Vermont State College student,” he said.
The governor’s higher-education proposals came just one day after the president of Green Mountain College, a 185-year-old private institution located in Poultney, announced that the liberal arts/environmental studies college would be closing permanently at the end of the current semester due to declining enrollment. Last year, the Catholic-affiliated College of St. Joseph in Rutland announced that it, too, may be forced to close at some point due finances and enrollment challenges.
Scott also affirmed his strong commitment to child care and pre-kindergarten funding, as seen in previous budgets.
“First, I propose we invest an additional $7 million into our child-care system to make it more accessible and affordable for low-income and working families,” he announced. “… If we keep the focus on our kids and the good we can do for them, we can continue to strengthen our system, giving every kid the best possible education and the tools to reach their full potential, from cradle to career.”
A fair reevaluation of Act 250, the state’s land use and development law, also received priority status in Thursday’s address. The governor’s approach is not to create more regulations, but to revisit existing ones that could streamline the process for new development.
“Let’s modernize regulation to support growth in our local economic centers, expand broadband access and take action on climate change to strengthen our environment and economy,” he said. “Last term, we agreed on the need to evaluate Act 250. These regulations were put in place when we were growing too fast. Over time, they’ve become complex, and in some cases, redundant with other regulations.”
In particular, he suggested that some communities could be exempted from Act 250 for meeting planning and environmental goals.
“Let’s give communities the opportunity to raise the bar when it comes to planning and environmental protection. And when they meet these new standards, let’s reward them and encourage growth by exempting them from Act 250,” he said.
Addictions: Vaping tax proposed
While the opioid crisis did not loom large in this year’s budget address, Scott expressed his personal concern over vaping and e-cigarettes. Over the past year, an estimated 1.5 million kids began using e-cigarettes and vape products nationally. Use of such products doubled in Vermont.
“We all know the serious and harmful impact of our opioid crisis and with your help, we’ll continue to address it. Today, I’d like to address another threat to public health: Between 2017 and 2018, 1.5 million more kids began using e-cigarettes and vape products across the nation.
“The surgeon general has declared this an epidemic,” Scott said. “After all the progress made to lower nicotine addiction, this is not only concerning, it’s frustrating. I think you all know it’s not my first instinct to add a tax, but with a growing health risk for our kids, I’m proposing to levy the same tax as we do on tobacco products. Let’s learn from the past, let’s not make the same mistakes with e-cigarettes or anything else. Our kids must know the dangers of these behaviors, and we should stop it in its tracks.”
The idea of a vaping tax got sustained applause from Democrats and Progressives in the chamber.
Electric vehicles and ‘no’ to a carbon tax
Scott emphasized that a stronger state economy is assured by building a cleaner economy. He called for transitioning to electric vehicles across the state to save millions of dollars. In 2015, according to the governor, approximately $830 million was spent on gasoline sales in state.
“If this travel had all been powered by electricity, the cost would’ve been significantly less, saving drivers more than $500 million,” he said.
A part of the cleaner economy is the Scott “Comprehensive Energy Plan,” which recognizes that more electric vehicles are essential to meeting the state’s lofty climate and energy goals.
“We need 10 percent — about 50,000 — of the cars and trucks on our roads to be electric by 2025, and 25 percent by 2030,” Scott stressed. I” don’t believe we can meet those goals unless we help people make this transition. Today, we only have about 1,000 EVs on the road — less than one percent of new passenger vehicle registrations. We all know transportation costs are high for rural Vermonters—that’s one of the reasons I will not support a carbon tax.”
Scott added that he agrees with the Vermont Climate Action Commission report that recommends an incentive to make electric vehicles more affordable.
“So, I’m proposing $1.5 million in rebates to help more people purchase or lease new or used EVs,” he said. “And to lead by example, I’m asking for your support in using $500,000 to invest in more EVs and EV infrastructure for the state fleet.”
Cyber security and expanded broadband
Ironically, Scott returned to the internet broadband and cyber-security issues that were spearheaded by his 2018 Democrat opponent Christine Hallquist. About 75 percent of Vermont has high-speed broadband access.
“I’m proposing to make bonding available for municipal broadband in areas that need it. To expand service, I’m proposing to invest $1 million for connectivity, and let’s eliminate the sunset on 248(a )— it’s worked to speed up telecom projects and we must continue to make progress. My team has been working closely on a partnership with Microsoft to expand broadband access and computer science education to communities with the greatest needs. This partnership will come with an investment in Vermont to support expanding broadband and to help kids and families in our communities learn more of the digital skills they need,” he said.
Scott then called for a one-time investment of $2.3 million to strengthen the state’s cyber firewall and upgrade critical IT infrastructure.
Call for unity
To close out the budget address, Scott emphasized the need for House, Senate and the governor’s office to work together to improve the state and solve its financial and social problems.
“We can be the example,” he said in summarizing his budget plans and style of governing. “We can reject hate and anger, partisanship and division. We can recognize Vermonters call for balance, for civility and for us to work together. And we can commit to solving the problems ahead of us and helping the people who sent us here to do so. If we do, we will make a difference in the lives of Vermonters, and our actions will prove that the best work still comes when we’re guided by our core beliefs in freedom and unity.”
At one point near the conclusion of the speech, a heckler in the assembly interrupted Scott, but was escorted out by the sergeant at arms. It was unclear to many in attendance what the protester actually said. But Scott responded to the heckler’s garbled shouting with a quip about maintaining “civility” in the Statehouse. Legislators on both sides of the aisle responded with thunderous applause.
Lou Varricchio is a freelance reporter for True North Reports. Send him news tips at firstname.lastname@example.org.