By Guy Page

Governor Phil Scott used his 2026 State of the State address Wednesday, January 7 to deliver a blunt message to lawmakers: Vermont must fully implement Act 73 education reforms this session, or risk worsening inequity, rising property taxes and declining student outcomes. He also issued his strongest warning yet, pledging to veto any budget, education or tax bill that deviates from the law’s framework.

“Education transformation is not optional, it’s essential,” Scott told a joint session of the General Assembly, framing Act 73 as a long-overdue structural overhaul rather than another temporary fix.

Scott’s speech was long on the need for change at the school district level, but did not dwell significantly on potential areas to reduce in-school staffing and curricular costs. In fact, he specifically said teachers aren’t the problem and that teachers in lower-paying districts earn up to $22,000 less than their peers in other, more well-heeled public schools. Three times he mentioned the hard choices the Legislature must make, but he did not mention school choice at all. 

In one of the most consequential moments of the speech, Scott drew a firm line for the months ahead.

“I want to be clear,” he said. “I will not sign a budget or an education bill or tax bill that deviates from Act 73 or fails to fix what’s broken.”

Unlike his tenure from 2017-2024, previous to the 2024 Red Wave election that ended the Democrat supermajority in both House and Senate, Gov. Scott’s threat to veto carries weight. It is highly unlikely his veto will be overturned – thus making him an active ‘player’ in the legislative process to put skin and muscle on the bones of Act 73 established by the 2025 Legislature. 

Scott said Act 73 represents a turning point after decades of partial reforms that failed to control costs or improve outcomes. Unlike earlier laws such as Acts 60, 68 and 46, he argued, Act 73 addresses governance, equity, accountability and spending growth together.

“This does so much more than just rearrange the deck chairs,” Scott said, citing expanded pre-kindergarten, greater course equity across districts, broader access to career and technical education, and higher pay for teachers in lower-income areas.

A central theme of the address was the growing cost of education. Scott said Vermont now spends about $2.5 billion annually on pre-K through 12 education, up from $1.6 billion when he took office, with roughly $800 million coming from non–property tax sources such as sales and lottery revenue. Without structural change, he warned, education spending is on track to require another $200 million next year and drive double-digit property tax increases.

Scott said he will, again, ask the Legislature to spend reserves to keep this year’s spending down, but considers such actions band-aids, not fixes. 

To rein in costs and expand opportunity, Scott called for aggressively “rightsizing” Vermont’s education system by consolidating districts and redrawing supervisory union boundaries, as required under Act 73. Vermont currently educates about 74,000 K–12 students but still maintains 52 supervisory unions and 119 districts, many serving only a few hundred—or fewer—students.

The governor pointed to stark disparities between districts as evidence the current system is inequitable. In some parts of the state, students can choose from more than 100 courses, while others have access to roughly a third fewer options based solely on geography. Larger schools may offer a dozen or more foreign languages, while smaller schools offer only a handful.

“This isn’t meaningful local control,” Scott said. “It’s significant inconsistency, unequal opportunity, and frankly, it’s just not fair.”

Scott also emphasized that the reforms are intended to support teachers, not blame them. He noted a $22,000 gap between average teacher salaries in the highest- and lowest-paying supervisory unions and argued that consolidation would help close that divide while providing better professional support and resources.

“If we want to build the best education system in the nation, we must make sure teachers have what they need,” he said. “We can no longer ask teachers to go it alone.”

During his remarks, Scott name-checked several teachers from around the state, including Oxbow High School American history teacher Andrew Chobanian, after asking members of his staff to identify their favorite teacher. Oxbow graduate Amanda Wheeler is Scott’s press secretary, the Journal-Opinion notes.

While acknowledging that change could lead to school mergers and repurposing of buildings, Scott said the alternative—maintaining a system designed for a much larger student population—would continue to erode opportunity and affordability. He argued that Act 73 does not mandate school closures but creates standards that allow change to be managed deliberately, rather than through slow decline.

Scott closed by urging lawmakers to resist pressure to delay or weaken reforms and to keep faith with taxpayers, educators and students.

“We didn’t pass Act 73 because it was easy,” he said. “We did it because solving this problem matters. What you do next matters even more.”

House Speaker responds – House Speaker Jill Krowinski agrees that education spending reform is vital, and especially liked his emphasis on school district inequity, Krowinski’s Chief of Staff Conor Kennedy told VDC today. “Year over year property taxes are unsustainable for Vermonters,” especially with the impact of President Trump’s tariffs, Kennedy said on Krowinski’s behalf. ‘She didn’t find the veto threat super helpful… this is not the best way to set the table. “

Krowinski is concerned about proposals to cap school spending this year, because many school districts already have their budgets set, but is open to discussions for future years, he added.

GOP House, Senate leaders back speech – Senate Minority Leader Scott Beck and House Minority Leader Pattie McCoy issued a joint statement praising Scott’s ‘clear and courageous path’ for education.

The statement is printed below verbatim:

“Today, Governor Scott delivered a State of the State address that sets a clear and courageous path forward for Vermont. We strongly support the Governor’s call to restore trust in government through cooperation, civility, and a focus on real solutions—not political theater.

“Governor Scott’s commitment to fiscal responsibility, including a balanced budget without new taxes, reflects the values Vermonters expect from their leaders. At a time when families face rising costs and economic uncertainty, this approach prioritizes smart investments in housing, energy, healthcare, and public safety while protecting taxpayers.

“Most importantly, the Governor correctly identified education reform as our most urgent challenge. Act 73 was a historic step toward equity and opportunity, and now Vermont’s Legislature must follow through in the second year of the biennium. Vermont cannot afford an education system that is increasingly unaffordable. By streamlining governance, expanding pre-K, providing equity and opportunity, strengthening career and technical education, and ensuring fair pay for teachers, we can build the best public education system in the nation—one that serves every child, in every community.

“This is not about politics; it’s about the future of Vermont. Education transformation is essential to reversing demographic decline, growing our economy, and giving every student a fair shot at success. We stand ready to work with Governor Scott and legislative colleagues to keep our promise to Vermonters: to finish what we started and deliver the reforms our kids deserve.

“Together, we can make Vermont stronger, more affordable, and more vibrant for generations to come.”