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State of the State: 2025 vs 2026
Governor Phil Scott -- comparing priorities year over year
From Broad Affordability Agenda to Singular Education Focus
Governor Phil Scott's 2025 address was a wide-ranging speech that framed Vermont's challenges through the lens of demographics and affordability, touching on housing, education, public safety, healthcare, workforce shortages, flood recovery, and the cost of living. He positioned housing and education as twin priorities, dedicating roughly equal rhetorical weight to each, while promising forthcoming proposals on healthcare stabilization, public safety, and climate policy. The 2025 speech was laden with specific data points — 7,200 homes needed to break even, 8,000 per year for five years, the Education Fund growing from $1.6 billion to $2.3 billion — and outlined a four-part housing strategy involving TIF expansion, VHIP, appeals process reform, and ACT 250 exemptions.
By 2026, the address is overwhelmingly dominated by a single issue: education transformation through Act 73, which passed between the two speeches. Where the 2025 speech previewed a multi-year education plan in broad strokes — new funding formula, simpler governance, spending guardrails — the 2026 speech dives deep into implementation specifics. Scott cites the $2.5 billion education price tag (up from the $2.3 billion cited in 2025), compares Vermont unfavorably to Mississippi on outcomes and efficiency, highlights the $22,000 salary gap between the highest and lowest paying supervisory unions, and makes a passionate case for district consolidation, citing the decline of schools like Black River High School (from 167 to 75 students), Windham (15 students), and Rochester (2 students). The governor explicitly threatens to veto any budget that "deviates from Act 73 or fails to fix what's broken."
Housing, which consumed a major portion of the 2025 speech, is reduced to a brief mention in 2026 — listed among proposals to be shared "right after this speech" but given no substantive floor time. Healthcare, public safety, climate policy, flood recovery, refugee resettlement, and workforce development — all discussed in 2025 — are either mentioned only in passing or dropped entirely. The 2026 speech also introduces a significant new contextual element: the loss of one-time pandemic recovery funds and uncertainty around federal support, which creates fiscal pressure that reinforces Scott's argument for education cost containment.
The rhetorical tone also shifts notably. The 2025 speech used personal stories of struggling Vermonters (Travis from Moretown, Carrie from Lyndonville, Representative Terri Lynn Williams) to build a broad case for affordability and responsive governance. The 2026 speech channels that same emotional energy almost exclusively toward education — invoking a baby born on New Year's Day in Newport, favorite teachers named by his staff, and his own experience with school consolidation in Barre in the 1990s. The message to the legislature shifted from "let's work together on many fronts" to an urgent, almost singular demand: follow through on Act 73 or face a veto.
New Priorities in 2026
- +Implementation and follow-through on Act 73, including drawing new district consolidation maps as the 'first order of business' for legislative committees
- +Direct appeal to teachers with specific commitments to close the $22,000 average salary gap between highest and lowest paying supervisory unions
- +Explicit benchmarking against Mississippi's education outcomes — citing their higher graduation rate and similar or better test scores despite spending thousands less per student and educating five times as many kids
- +Veto threat: Governor stated he 'will not sign a budget or an education bill or tax bill that deviates from Act 73 or fails to fix what's broken'
- +Acknowledgment that one-time pandemic recovery funds are exhausted and federal support is uncertain, creating a new fiscal reality for budgeting
- +Specific focus on early literacy crisis, citing a Boston Globe report that 'no state fell as far in early reading as Vermont' — dropping from top 5 nationally to 37th in 4th grade reading over a decade
Dropped from 2025
- −Detailed four-part housing strategy (TIF expansion, VHIP growth, appeals process reform, ACT 250 exemption expansion) that was a centerpiece of the 2025 address — housing is mentioned only in passing in 2026
- −Flood recovery efforts and disaster resiliency, which were prominently featured in 2025 with stories from Lyndonville and the AOT mobile home placement program (34 lots improved, 32 mobile homes placed)
- −Climate policy commitments — in 2025 Scott promised proposals for 'climate policy that's achievable and affordable'; climate is absent from the 2026 address
- −Refugee resettlement (1,000+ refugees welcomed over three years) received no mention in 2026
- −Specific public safety proposals and the decline in overdose/suicide deaths and highway fatalities highlighted in 2025
- −Healthcare system stabilization, which Scott promised to address in 2025 but only briefly lists among issues in 2026
- −Workforce development accomplishments including broadband expansion for 100,000+ households, unemployment IT modernization, and brownfield cleanup enabling 700+ homes
- −The rural vs. urban divide framing — the 2025 speech extensively contrasted Northwest Vermont's prosperity with struggling communities in the Northeast Kingdom and southern Vermont, calling out specific towns; this geographic equity argument is largely absent in 2026
- −Outdoor recreation economy ($2.1 billion contribution, VOREC program) and state parks milestones received no mention in 2026
Shifted Emphasis
- ↔Education moved from being one of two co-equal priorities (alongside housing) in 2025 to consuming approximately 90% of the 2026 address — shifting from previewing a reform plan to demanding implementation of the now-enacted Act 73
- ↔The Education Fund discussion evolved from diagnostic ($1.6B to $2.3B growth, broken funding formula, too many districts) in 2025 to implementation-focused in 2026 ($2.5B spending, need for district map consolidation, specific school closure examples like Black River, Windham, and Rochester)
- ↔The fiscal message shifted from 'no new taxes and spend within Vermonters' means' in 2025 to a more constrained framing in 2026 acknowledging that pandemic funds are gone, federal support is uncertain, and another $200 million education increase with double-digit property tax hikes is projected
- ↔School consolidation went from an abstract goal in 2025 ('simpler governance structure') to specific advocacy in 2026, with Scott sharing his personal experience of Barre consolidating seven schools into one in the mid-1990s and calling the recent failure to produce district maps 'a political strategy to preserve the old system'
- ↔The tone toward the legislature shifted from collaborative invitation in 2025 ('I'm asking each of you to think') to a more confrontational posture in 2026, including an explicit veto threat and accusation that map-drawing failure was a deliberate political strategy
- ↔Property tax relief shifted from a proposed systemic fix through a new funding formula in 2025 to a reluctant 'band-aid' approach in 2026 while longer-term Act 73 reforms take effect
- ↔Demographic decline was the foundational framing device in 2025 (14,000 fewer under-18, 28,000 fewer working-age, 48,000 more over-65) but in 2026 is referenced only briefly in service of the education argument rather than as a standalone crisis
Policy Topics Addressed
Affordability
Governor Scott framed education reform as central to affordability, noting Vermonters face $2.5 billion in pre-K through 12 spending (up from $1.6 billion when he took office) and another double-digit property tax increase. He argued that education system inefficiency — 52 supervisory unions and 119 districts for only 80,000 students — drives unsustainable costs. He also highlighted eliminating sales tax on household utility bills, saving $178 million over two years, and noted middle-class taxpayers received a 23% income tax cut, the lowest in 50 years.
Economy & Jobs
Governor Scott's address focused primarily on education reform rather than economic development specifically, but he emphasized that education transformation is essential to growing the economy, building a skilled workforce, and making Vermont more affordable. He noted the need to attract more people to live in Vermont and add taxpayers rather than always looking for new taxes.
Education
Governor Scott devoted the vast majority of his address to education reform, calling it 'essential, not optional.' He defended Act 73 — Vermont's comprehensive education restructuring law — and called for consolidating 52 supervisory unions and 119 districts serving only 80,000 students. He cited Vermont's fall from top-5 to 37th in 4th-grade reading over a decade, pointed to Mississippi's success as a model, highlighted a $22,000 teacher salary gap between districts, and warned he would not sign any budget deviating from Act 73.
Environment & Energy
Governor Scott briefly noted bipartisan success in removing sales tax on household utility bills (saving $178 million over two years) and discussed energy costs in the context of education funding, noting that diversifying energy sources is needed to address high electricity prices.
Government Reform
Governor Scott devoted his entire address to education system reform through Act 73 implementation, calling for consolidating 52 supervisory unions and 119 districts serving only 80,000 students into far fewer, larger districts. He argued the current fragmented system creates massive inefficiency and inequity, with education spending reaching $2.5 billion and driving unsustainable property tax increases, and warned he would not sign any bill that deviates from the reform path.
Healthcare
Governor Scott's address focused primarily on education reform but noted the importance of addressing healthcare accessibility and affordability challenges in the context of overall state budget pressures.
Housing
Governor Scott referenced housing within his broader discussion of education reform's impact on affordability, noting that education transformation is essential to making Vermont more affordable and providing more housing in communities left behind.
Infrastructure
Governor Scott focused primarily on education infrastructure reform but also announced a partnership with UW-Madison to study nuclear energy opportunities and a commitment to purchase 225,000 megawatt hours of renewable energy annually for 20 years — enough to power more than half a million homes.
Public Safety
Governor Scott's address was almost entirely focused on education transformation and did not substantively address public safety or crime policy.
Tax & Budget
Governor Scott focused his address almost entirely on education reform and its fiscal implications, noting Vermonters are set to spend $2.5 billion on pre-K through 12 (up from $1.6 billion when he became Governor) and face another $200 million increase with double-digit property tax increases. He committed to providing property tax relief as a band-aid while pushing Act 73 education reforms to change the long-term cost trajectory, and pledged not to sign any budget deviating from Act 73.
Technology
Governor Scott's address focused primarily on education reform but included discussion of technology's role in modernizing education and government. He emphasized the importance of investing in solid and secure technology systems to prevent fraud, waste, and abuse in government programs, noting Wyoming's low error rates as an example of technology investment paying off.