When you’re in a hole, stop digging.
That’s the philosophy supporters saw Gov. Phil Scott follow during his first year in office, a post the moderate Republican assumed after six years of Democratic Gov. Peter Shumlin, whose party continues to boast a large majority in the Legislature. Spending under Shumlin and his predecessor, Republican Jim Douglas, regularly outpaced inflation; some budgets were aided by large infusions of federal money after the 2008 recession and disaster relief from Tropical Storm Irene in 2011.
Scott campaigned in 2016 on the lack of “affordability” of living in Vermont and promised no big proposals, such as “activist” Shumlin’s quest to radically change health care insurance to a single-payer system. Scott’s biggest success in 2017, in his eyes and others’, was persuading lawmakers — with almost zero pushback — to pass a state budget with no increases in taxes or fees.
“Just think about that,” Scott said in an interview last week. “I can’t remember that ever happening when I was in the Legislature.” He served six years as lieutenant governor and 10 as a state senator.
Lawmakers took seriously Scott’s threat to veto a budget that grew at a rate greater than inflation or that raised new revenues. The $5.83 billion budget was 1.3 percent higher than the year before; the total amount of state funding in the budget was a mere 0.7 percent more than the previous year. (In 1993, under Democratic Gov. Howard Dean, the Legislature cut the general fund by 2 percent.)
In reviewing 2017, the governor insisted he didn’t just play defense and pointed to a $35 million investment in affordable housing included in the budget as a major step forward. In addition, he claimed gains in the three areas measured by his political mantra “6-3-1,” denoting the daily loss of Vermonters working, the daily drop in the number of public-school students, and the birth almost every day of a child to a drug-addicted mother.
Scott also admitted he made mistakes during his first year, notably his push for communities to vote on level-funded school budgets in May and not on the traditional Town Meeting Day in March. “Lesson learned,” he said.
The governor also acknowledged the distraction created by the drumbeat of controversial policies from President Donald Trump he was asked to comment about. His political opponents did give him high marks for pushing back and opposing some of the president’s more controversial ideas.
“It compounded the level of difficulty,” Scott said about the president’s tweets and proposals. But he said it allowed him to show Vermonters he could be independent and not always toe the party line. “Almost daily I was asked to respond to what he was advocating or the tweets,” Scott said. He said he tried to be respectful but “call them as I see them.”
The biggest controversy during Scott’s first 12 months involved a push to rein in teacher health care costs, calling for a single deal to be negotiated with all Vermont teachers. Some lawmakers called Scott’s proposal poorly thought out and said it undermined collective bargaining. The fight led Scott to veto the state budget, causing a delay in adjournment and prompting harsh comments between lawmakers and Scott.
The eventual compromise that led to adjournment included formation of a committee to study the teacher health care issue. Scott will use the committee’s recommendation for a statewide solution to augment his argument again in 2018. School funding remains a primary concern for him, with fewer than 80,000 students and a statewide budget of $1.6 billion. Some Democratic lawmakers appeared conflicted, wanting lower taxes while also supporting teachers.
Democrats describe lack of leadership
While generally complimentary about his tone and civility, especially compared with Trump, some Democrats said Scott’s first-year successes were superficial and paper-thin.
They note, for example, that holding the line on state spending creates a short-term satisfaction for tax-weary residents. Underneath, they say, many Vermonters continue to struggle with poverty, and forgoing investments now will cost the state more money later.
A glaring example, they say, is the failure of the administration to identify a funding source to clean up Lake Champlain. Scott argues the plan hasn’t been fully figured out and says he doesn’t want to “simply throw money at the problem.”
Sen. Becca Balint, D-Windham, the majority leader, said she and many of her colleagues were surprised by what they viewed as too often a hands-off approach by the administration, failing to come up with proposals the Legislature could review and shape together, instead telling lawmakers “you figure it out.”
“We welcome the confidence he has in our ability,” Balint wisecracked, “but we need a more dynamic working relationship,” including “giving his commissioners and secretaries more room to be leaders.” Too often, she said, they provided limited testimony or just spoke from talking points.
What concerned Balint most was the focus on curbing spending while she said needs were growing.
“We’ve all faced those tough conversations with folks at the supermarket” about high property taxes and the cost of living in Vermont, she said. “The tricky part is you ultimately have to pay the piper. (Democrats) need to be stronger in our articulation that we have real needs that cost money.”
For example, she said more needs to be invested in programs to help children in state custody because of the opioid crisis, or the state will have to spend “a massive amount of money to reverse the trauma” years down the road.
Scott’s approach at times, she said, amounted to “kicking the can down the road for a future administration to deal with.”
“It’ll work for a while, but at some point we’ll see the pain, probably at the local level first,” Balint said.
Lt. Gov. David Zuckerman, a Progressive/Democrat, said Scott’s view “seems to be more into an austerity version of governing, while mine is recognizing the vulnerable and the challenges a lot of folks are facing that we could be doing more for. His vision is of government doing less.”
Trump and other challenges
Doing less than his predecessors is just fine with supporters like Chet Greenwood, chair of the Orleans County Republican Committee.
“He’s done a good job holding the line on the spending,” Greenwood said. “He doesn’t have a lot of support in the Legislature, but he’s got to hold his ground.” He applauded Scott’s efforts to strike a deal on teacher health care.
Greenwood listed an alphabet soup of groups he said Scott needs to keep at bay in 2018, including the teachers union over health care benefits and environmental groups that support a carbon tax — the Vermont Natural Resources Council and the Vermont Public Interest Research Group.
VPIRG Executive Director Paul Burns gave Scott a mixed review for 2017. He said Scott’s administration deserved credit for helping Bennington residents affected by PFOA contamination in their water, but said Scott “retreated” from previous administrations on other toxic threats, including some children’s toys. Burns gave Scott credit for acknowledging climate change, but said his “deeds have failed to live up to his rhetoric” and that Scott needed to “walk the walk.”
On rhetoric, Balint and Zuckerman praised Scott for opposing some of Trump’s policies, on immigration and most recently the tax cut bill that may put pressure on Congress to cut funding to states. Observers said Scott’s opposition to Trump is genuine and also scores political points with independents. The governor also appeals to moderates by emphasizing his libertarian streak, such as when he discusses marijuana legalization, which he generally opposes.
The first bill Scott signed restricted Vermont police cooperation with federal immigration authorities and prohibited the state from assisting in creating a database based on religion, a rebuke to Trump’s immigration policies.
Balint called that measure a “small but meaningful gesture” in response to fears among immigrant farmworkers and others.
“I do appreciate that he’s not added to the histrionics we’ve seen coming from the White House,” Balint said.
Scott said he and some other Republican governors have opposed some Trump policies and still been able to work with Washington on other issues, including opioid addiction and economic development.
“We’ve been able to do what’s right without suffering the consequences,” Scott said.
Political analyst Eric Davis termed Scott’s first year “reasonably successful.”
“If the ‘swing of the pendulum’ theory of politics applies to Vermont gubernatorial elections, the voters in 2016 said they wanted a governor who would hold the line after six activist years of Peter Shumlin,” Davis said. “If that interpretation is correct, Phil Scott has delivered what the voters asked for. Longer-term, the question will be whether voters will come round to a desire for a more active state government before the time when Scott decides he no longer wants to be governor.”
Some of the challenges are daunting and hard to control, said Davis, a retired Middlebury College political science professor. He noted the economic challenges with a stagnant and graying population and the prosperity gap between Chittenden County and the rest of Vermont. And he said the low unemployment rate masked that many new jobs pay lower-end wages.
Property taxes continue to rise, which Scott emphasizes are set at the local level and the bill passed on to the state. If no changes are made, statewide rates will jump 7 percent, which Scott says is too high. He wants per-pupil spending to increase no more than 2.5 percent. The Agency of Education is projecting spending on schools for fiscal year 2019 to grow 3.52 percent, or $46 million. Last year, spending increased 3.1 percent.
Vermont continues to have higher-than-average health care costs, according to the Kaiser Foundation. Scott’s campaign promise to dismantle Vermont Health Connect or join another state did not materialize. There was uncertainty over whether the federal Affordable Care Act would be overturned. In the end, Scott opposed repeal efforts in Washington because they would hurt Vermonters on expanded Medicaid coverage.
Affordable housing expert Michael Monte, with Champlain Housing Trust, captured the significance and unmet challenge in what Scott pointed to as a major achievement: the $35 million in housing bond revenue that is predicted to spur up to $100 million in private development and create affordable housing for 550 to 650 Vermonters. Scott said affordable housing is one of the biggest obstacles to job growth and retention, the “6” in the “6-3-1” mantra he admits some are tired of hearing and some view as too simplistic.
“This is the largest single housing investment in the state’s history,” Monte said. “And even with this investment, the need in Chittenden County and northwest Vermont will still be great if we are to prevent displacement, address homelessness and provide affordable homes for the workforce.”
Tougher fight in Round 2?
Analyst Davis described Scott as being in a political stalemate with lawmakers, having enough Republican support to veto measures but not enough to get his own proposals through without relying on Democrats. (There are 53 Republicans in the 150-seat House, enough to sustain a veto if they stick together.)
House Speaker Mitzi Johnson, D-South Hero, Senate President Pro Tem Tim Ashe, D/P-Chittenden, and Scott have all used the phrase “getting our sea legs” in describing their respective first years in the new jobs.
Ashe called the dispute over teacher health care benefits “an outlier” in an otherwise professional back and forth. Zuckerman called Scott “a very reasonable person to work with.”
The governor stressed his desire to find common ground with lawmakers, a theme he has pushed throughout his political career in a state that leans blue. Zuckerman questioned why Scott has stayed in the Republican Party and said he should jump ship as Sen. James Jeffords did when he grew dissatisfied and became an independent in 2001.
A year ago, Scott said he was trying to put together his staff and a budget and that they would be more seasoned this year. Sometimes, he said, the past year has seemed like the longest; other times, the shortest.
“I wish I knew a year ago what I know today, but that’s part of the learning and the growing and just part of the experience,” Scott said.
Balint echoed that theme and said senators would be better prepared, push harder for more answers from the administration, and perhaps be less willing to compromise, which she said they tried last year with limited success.
Scott said he wants lawmakers to again pass a state budget without increased taxes or fees. Last year, he held a smile and a veto pen simultaneously and appears prepared to do the same this year.
“Vetoing the budget was not something I wanted to do. I wanted to come to an agreement. In the end, it just didn’t happen,” he said. In talks with legislative leaders after the veto, Scott said he would sign a budget by July 1 no matter what, undermining — by his own admission — his negotiating position.
“In the end, I think it worked out well,” he said. “I did what I thought was right.”
To stop the digging.
Davis said Scott will be under greater scrutiny in 2018 because it’s an election year. And he said some of the issues will “generate executive-legislative conflicts” and perhaps vetoes, including the minimum wage, lake cleanup, school financing and marijuana legalization.
“So the governor should plan for more conflict ahead,” Davis predicted.
