On January 11, 2023

Gov. Scott calls for revival of Vt. economy in inaugural address

By Sarah Mearhoff/ VTDigger

Kicking off his fourth two-year term as Vermont’s top government official, Republican Gov. Phil Scott in his inaugural address on Thursday echoed familiar calls for statewide economic recovery in the face of unprecedented opportunity.

But from Scott’s seat, this legislative biennium looks quite different from the past two years and presents the state’s chief executive with new challenges.

For two years, Vermont’s state government had a historic amount of federal pandemic aid to throw at long-standing challenges. Now, those funds have run dry.

And after November’s election, Scott has to contend with a historic Democratic majority in the Legislature — one that, if united, could routinely override Scott’s vetoes, should he try to block Democrats’ priority legislation. The supermajority is a powerful new check on Scott, who has issued a record number of gubernatorial vetoes in his six years in office.

Scott was inaugurated to his fourth two-year term in a packed House chamber on Thursday, in the first large-scale event of its kind under the golden dome since the Covid-19 pandemic struck in 2020. He was met with raucous applause as he strode down the House’s center aisle toward the chamber’s dais, beaming and shaking hands with top officials in attendance.

After taking the oath of office, Scott opened his fourth term with an inaugural address in which he imagined a Vermont flush with affordable housing, accessible childcare, “mom-and-pop” small businesses and “wicked-fast” broadband access.

For many Vermonters, these are not currently reality — but Scott said on Thursday that they are “within reach.”

“Before the pandemic, we shored up our foundation by passing responsible budgets and focused on longstanding challenges, like workforce and housing,” Scott said. “This work — and the course we have set — has put us in an incredible position to make the most of this once-in-a-lifetime opportunity offered by historic federal aid and record state surpluses.”

The inaugural address typically provides the governor with an opportunity to sketch out broad priorities, while more detailed proposals are expected in the annual budget address, which Scott is scheduled to deliver on Jan. 20.

On Thursday, Scott went on with promises to tackle some of Vermont’s most difficult challenges — some of which were born amid the pandemic and resulting nationwide economic fallout, but others that long predated Covid-19.

Vermont continues to face an affordability crisis, which has only been exacerbated recently by rising inflation, an oil crisis, a runaway housing market and increasing health care costs. Vermont’s workforce is ever shrinking, as the state’s population ages into retirement and young people leave to live elsewhere. And climate change remains an existential threat.

Scott offered some perennial solutions: continued investments in workforce development — especially within the trades, and expansion of home weatherization efforts and electric vehicle infrastructure.

Addressing rising costs of living, Scott reiterated a pledge to avoid any new taxes or fees. “I want to be clear: this isn’t the time to increase the burden on anyone,” he said.

“And we certainly can’t ask lower-and middle-income families to cover the costs for their wealthier neighbors,” Scott continued. “We must find ways to achieve our shared goals without adding taxes and fees because this only increases the cost of living.”

Scott also promoted his administration’s recently released statewide family and medical leave program. To be administered by the Connecticut-based insurance company The Hartford, the program will reimburse up to 60% of a person’s wages for at least six weeks while they look after a newborn or newly adopted child, care for a sick family member or address their own health condition. It will first be implemented with state workers, and will later open up to any worker in Vermont who wants to opt-in.

Who pays?

Vitally, to Scott, paying for the program would not require raising taxes. Paid leave programs have historically been a touchy subject between Scott and Democratic legislators, with Scott vetoing Democratic lawmakers’ plans twice in recent years.

In the wake of Scott’s release of the plan, some longtime advocates called on the state to go bigger — a tension that Scott acknowledged on Thursday. Others, like Senate President Pro Tempore Phil Baruth, D/P-Chittenden, sought to temper expectations from early on.

“Now, I know some of you don’t think this goes far enough and feel Vermonters can afford another tax,” Scott said on Thursday. “But by doing this without a payroll tax on workers, we are not forcing those who don’t need it, and can’t afford it, to pay for someone who can.”

Paid family and medical leave is just one of the pieces in Scott’s workforce development puzzle. Vermont’s workforce shortage did not materialize overnight, but “the last two years put the number of people leaving the workforce on steroids,” he said.

To chip away at the problem, Scott said he plans to introduce in his upcoming budget further investments in internship, apprenticeship and training programs, as well as tech schools. “But,” he said, “we can’t just train our way out of this.”

“It’s not as simple as just getting the unemployed back to work, because there are currently about three job openings for every one unemployed Vermonter,” he continued. “Everything I’ve talked about today — from making Vermont more affordable, building more housing, creating the best education system in the country, and ensuring safe, clean, healthy communities — all these things are necessary to keep and attract more people.”

On the issue of climate change, Scott celebrated the near-quarter-billion-dollars lawmakers have devoted over the past two years to cutting emissions, weatherizing homes, building out electric vehicle charging stations and bracing infrastructure for increasingly severe weather events.

But there’s more to do, he said, including leaning hard into expanding electric vehicle infrastructure. Even in a state with the greatest number of charging stations per capita, he said he sees while traveling the state that some communities don’t have equal access to charging stations. And for many Vermonters, he said electric vehicles remain too costly.

“(I)t needs to be easier, more convenient and more affordable to make the switch,” Scott said. “We have made great strides, but we need to make sure we are investing in the fastest chargers available. And with all the new EVs and electric heating and cooling systems coming online, we have some serious work to do to make sure our electric grid can accommodate it.”

While Scott reiterated that he believes “EVs are the right way to go,” he said to the Democrats in the room that climate change mitigation “is an area where we share goals but may disagree on how to get there.” Scott last year issued a crushing blow to Democrats when he vetoed legislation to create a clean heat standard, and the House failed to override the veto by just one vote.

The response to Scott’s speech from Democratic leadership was brief. In a one-paragraph written statement, House Speaker Jill Krowinski, D-Burlington, and Baruth said they each “share Governor Scott’s desire to work collaboratively and support a more vibrant and resilient future for all 14 counties.” They declined to hold a press conference after Scott’s speech concluded.

“The Legislature and the executive branch will continue to work together to increase access to affordable housing, support our working families, tackle our workforce challenges and find effective climate change solutions,” Krowinski and Baruth continued. “Together, we will govern with purpose, meet the challenges before us, and build a stronger future for all Vermonters.”

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