 Vermont PBS in cooperation with Orca Media and the Vermont Press Bureau presents Capital Beat, the Week in Review from the Vermont Statehouse. Here's host, Neil Goswami. Welcome everyone, we're very pleased to have you with us for Capital Beat. I'm Neil Goswami with the Vermont Press Bureau. And town meeting has come and gone, the unofficial midway point of the legislative session. Joining us today on this week's program is Governor Phil Scott to talk about the first two months of the session. Governor, welcome. Well, thanks for joining us. Thank you very much for having me, Neil. Yeah, my pleasure. As I noted, two months into the session, I believe we had you on the week after you were sworn in. A lot has transpired since then. That seems like a year ago at this point. It does. You've presented your budget to the legislature and we had a new president, I should say, sworn in. So as we kick off the show today, maybe you can just fill us in a little bit about how you think things are going two months into your tenure and what's working for your administration so far. Well, certainly. This is, I've been through a number of sessions over my years of political service. So 16 years and either 10 with the Senate, five or six as a Lieutenant Governor, this seems fairly typical. There's a lot of back and forth. I believe that we're somewhat on schedule in terms of the budget. The House will be coming out with their proposal fairly soon and debate that on the floor and then send it over to the Senate where they will drastically change the House version and we'll be involved along the way. But I feel good about where we're at at this point. We've got a good administration, a good team that we're developing and we have our opportunities, the highlights, but we're focusing on growing the economy, making Vermont more affordable, taking care of the most vulnerable. And those are the three things that guide us every single day and that's what we're focused on, economic opportunity. And when I get outside the building, I think it still has a lot of merit. People are somewhat, I think there's some optimism with the new administration. I believe that there is a little bit of excitement. We see some opportunity. There's some potential for growth throughout Vermont and across the border as well. And I've traveled to Canada on a couple of different occasions. So I think we have some optimism ahead. All right, we'll get to some specifics about this in a minute, but I wonder how much of an impact has the Trump presidency had on your administration here in Vermont so far? Well, we certainly talk a lot about the administration in Washington, President Trump. And it seems as though every press conference we have or highlight we see in the newspapers revolves around something that we're reacting to out of Washington. So it takes up some time, admittedly, but we're still focused on, again, trying to do whatever we can to help us out of the situation we find ourselves in economically from a budget perspective. And I believe that we have some challenges but opportunities as well ahead. All right, it's no secret at this point your budget plan that you proposed to lawmakers very much centered on some education proposals. You wanted to fund some new investment in early and higher education by moving some things from the general fund to the education fund and by level funding school budgets. Now, the legislature, as we know, declined to move the date out to allow school boards more time to recraft their budgets. On Tuesday, we had Town Meeting Day and we now know that more than 90% of school budgets passed. I think there were 18 that failed and 183 that passed on Town Meeting Day. So the savings from level-funded budgets that you were seeking has essentially evaporated. First of all, give us your thoughts on what transpired on Town Meeting Day and having only 18 school budgets fail. Yeah, I think it was a few more were defeated this year than last year. But again, it's somewhat typical of every year. I don't think that tells us a whole lot about the way people are feeling as somewhat of a disconnect between those who are voting on their school budgets and property taxes for some unknown reason. But we make it complicated in Vermont. There is many communities who have voted down their or level-funded their budgets over the years continue to see a rise in property taxes. So there's a futile effort in some respects and I think that that leads to some of the apathy we see when you only have, I don't know if the numbers are out yet or not, but I would suspect that it may have been around a 25% turnout rate of voters throughout Vermont. I still see opportunities ahead. I believe that there are ways we can save money within education to fund some of my initiatives, early childhood care and learning, and higher ed, which I think are essential as we move forward. What I've said repeatedly is that we have this K-12 budget where we spend $1.6 billion and we're educating 86,000 students, less than 20 years ago. So what we need to do is, which equates to about 19 on average, $19,000 per student, which is one of the highest in the country. So Act 46 is starting to take effect. There were a number of communities that voted in favor of merging and I applaud them for taking that action. It's not easy to take those steps, but that's the situation we find ourselves in. Less students, higher costs, we need to do whatever we can to live within our means. So I think they're taking action in some respects, but it's not happening fast enough. So I believe that there's still opportunities when you consider how much money we're spending there, not to take some of that and put it into early childhood care and learning, which is so essential. The child's brain develops incredibly fast within zero to five years. As well, we need more training to train for the positions that are open right now. So I still believe there's an opportunity to have some of those investments. You asked voters around the state to sort of do the math on their school budgets and I understand you did the math on yours in Berlin and voted against it. It was one of the 18 that failed. Was there not enough checking of the numbers by Vermonters? Well, again, it's difficult. I'm not sure that they were listening to what I had to say. If we have a 25% turnout for a town meeting, it's not the vast majority of voters who are speaking up. And I think that we need to engage people. We need to have more people show up and vote and participate as well. I saw on town meeting day, even in our own community, a number of positions that were either open, nobody running for certain positions or there was no race at all. Those who have done it previous were unopposed. And I say that there seems to be a lack of participation on the local level, state level, and so forth. So I'm just going to continue to advocate for people to take charge. Get active within your community and do the math, as I said, because it's a direct relationship as to what we're spending for education in our property taxes. So we now know that the tens of millions of dollars in savings you were seeking from level-funded school budgets will not transpire at least this year. And yet you are still saying that you believe you can fund the $9 million that you called for in early education and five or six million or so in higher education. Lawmakers are calling for a plan B from you. It sounds like you still believe there are savings. So can you tell us where those savings might come from? Well, I think in health care costs alone, I think V-High has identified about possibly $30 million worth of savings with reduced costs in health care. So there's an area that we could take a look. And again, for those who say plan B, I would say the plan I put out was balanced. It spent within its means. And there was a portion of that that the legislature didn't accept. But the vast majority of the budget that I put forth, they've taken advantage of. They took advantage of some of the cuts and some of the redistribution of funds and so forth that we savings we found within state government. So they took advantage of that. They have accepted some savings. So I wouldn't say that there's a need for plan B. I think we just move on with plan A where we're going to find other savings in other areas. Well, to be fair, the level-funded school budgets was the single biggest chunk of savings that you identified in your budget proposal. And I think we agree that it's no longer feasible for this 2018 fiscal year budget. So to fund those new initiatives, do you have any other... Well, I think as I said, I mean, there's one initiative. We're looking for 15 to 30 million dollars is what we're looking for at this point. But wouldn't those numbers only account for half of the 2018 fiscal year? Well, again, they're saying at a minimum, 30 million, there's 15 right there. And you think you would like to see that applied to your 9 million in early ed and 5 or 6 million in high-red? And I think there are other opportunities that we just have to be creative, think outside the box and be willing to, again, utilize our different approaches, agree on the goal. I believe that most would agree that we should do whatever we can to keep property taxes under control. I believe everyone feels that way, or most people do as well. I think that there are many who agree that we should be spending more on higher education than we do because if we're going to develop a temporary workforce, we need to have proper training in order to do so as well. Early childhood investments, I think are essential if we're going to change the behavior and save us money in the long run and give quality education at that tender young age. So if we can agree on the mission, agree on the goal, we just have to find ways to get there. Public leaders in the legislature say they do like the idea of investing in higher ed and early education. They're just seeking some new ideas of how to fund it from you. And it sounds to me like you're saying there won't be a document that you hand over that says plan B at the top. I think we all have to do our part. And you believe you've done years? Well, I think I'm willing to work with them. We're going to continue to work with them and trying to find those opportunities again at the end of the day, we want to help Vermonters. And I believe that this package that I presented would have helped would have been beneficial for Vermont. But I still believe there's a path to doing so. Okay. As you're aware, the House Appropriations Committee has been working over the last two months to essentially come up with what they call a their own version of the state budget for 2018. They say they've been able to reduce the projected gap from $72 million to $18 million. How much do you like or dislike their work so far? Well, again, I think that most of the reductions have been taken from what I presented to them. So I think most of them I would agree with. I haven't seen too many at this point in time that I disagree with. But it's a long process. You know, this is something that we work through. The House comes up with their proposal. It will go through the House debate. They'll come out with something that they vote on. It'll be sent to the Senate and again be completely reworked. I don't believe there'll be any rubber stamps on any budget proposal, whether it's mine, the House's or the Senate's. And I believe that at the end of the day, at the end of the session, there'll be a conference committee and there'll be the House and the Senate and we'll be continuing to be involved during the whole process to lend what I see as helpful advice along the way without raising taxes and fees. And I think that's essential for Vermonters. They've been taxed enough. They don't have the appetite for any more spending, additional spending, any more taxes and fees. And I believe there's a path to doing that. To get to the 18 million left in the projected gap, the House Appropriations Committee has utilized what they say is, anticipated additional spending in the Children's Health Insurance Program. That was an 18 million dollar whole or some that they plugged in to their budget. They're using about 6.75 million, I believe, from the Medicaid Global Commitment Fund. These are federal funds that we expect to receive from the federal government. Are you concerned, given the uncertainty with how things are in Washington right now and the discussion of federal funds and whether or not they will continue to flow at the way they have been, are you concerned that we're relying too much on perhaps one-time federal funding? Well, we do rely heavily on federal funding. Almost a third to half of our budget is federally funded. So we have to be concerned. When there's any change and what's happening in Washington, it could have a direct effect on Vermont. And we're staying on top of that. We have a great team in place. We're continuing to monitor the situation. We have a good delegation. We're working with our congressional delegation in making sure that Vermont is protected. But there are a lot of steps along the way there as well. They have a house and a Senate and a president as well that they have to deal with and we'll see how the process goes. But for those states who have expanded Medicaid as we have, this is a concern. Any changes will have a dramatic effect on us. But there are other governors throughout the United States that have taken advantage of expansion of Medicaid. Many Republican governors as well. So we'll continue to work together in that regard. And by reducing the gap to $18 million, they have stripped out your new spending initiatives on early and higher ed. Obviously, that's not something you would like to see remain. But if you add those in, that's at least 15, 16 million more on top of the 18 million. And they're already discussing things like the need to make drastic cuts perhaps to the Vermont home and other places. That seems pretty significant. Any concerns that they're going to have to cut deep into programs that Vermonters have come to rely on? Yeah, obviously. We'll work with them. There's a lot of posturing going on. Making draconian cuts is always a threat in some respect. No different than any other year that I've seen in this building. I guess we'll see what they come up with at the end of the day when they finally pass it through the house as to whether they cut things such as the veteran's home. All right, fair enough. Let's return to the Trump presidency and how it's impacting the state of Vermont. You came out very quickly alongside Attorney General TJ Donovan and a tripartisan group of lawmakers to support legislation that would in some ways counteract an executive order or a series of executive orders the president signed dealing with immigration and border security. That, the executive order that you found most offensive was stopped by a federal court order and the president has now issued a revised order. Your office sent out a release saying you were encouraged that it was a more narrowly crafted executive order. Can you explain why you believe it's more narrowly crafted or how it's less offensive at this point? Well, again, from a travel ban perspective it's been narrowed quite drastically. Those who have visas from those countries are going to be able to stay. So there's not as big a concern from that perspective but that wasn't, the issue that I had with the first executive order still exists and that is pertaining to government's overreach and dealing with public law enforcement whether it's local or state and I want to be sure that the governor is in place that I will have a say in whether any of those resources are used and that's my erosion of constitutional rights. The fourth and the tenth amendment I think are in danger of erosion and I think we still have to protect that and as I've said so many times before we can't pick and choose which constitutional rights we want to protect. We have to protect all of them because the next one might be something that you really care about you may not care about the fourth and the tenth at this point in time maybe the second amendment the next time so let's protect all of them. Yeah, the CBC in Canada reported this week that a Canadian born woman with Indian parents tried to cross the border at Highgate Springs here in Vermont to go to a local Vermont spa with two of her friends and was denied entry and was told that she needed a special immigrant visa even though she's a Canadian citizen. This isn't the first instance that we've heard of Canadian citizens with either parents who were immigrants or might be considered a minority group being stopped at the border. How concerned are you with how the border patrol is handling Canadians and others who are legally entitled to visit the United States but not allowed to? Yeah, I don't want to second guess border patrol customs and border patrol they have their job to do they have to protect their border just as the Canadian government is protecting the border going north. I will say that we've reached out to seek some clarification some guidelines that are associated with that so that we know we can offer to either Canadians or Americans what they can expect when they go to the border we have not heard back at this point but we'd like just to get some clarification on that. If it's widespread it's obviously a concern but I have to say I've traveled across the border back and forth over the last 30 years up through into Quebec through Ontario as well and there are many times that we came through with some on our team and other teams as well that weren't able to get across the Canadian side and were turned away so this is not abnormal that people get turned away but I'd like to know some of the specifics if they can give them to us but I don't want to again second guess what they're doing they have a job to do they're protecting our borders maybe a legitimate concern I just don't know at this point. Okay. President Trump and Republicans in Congress campaigned very heavily on repealing and replacing Obamacare or the Affordable Care Act as it's formally known this week Republicans and Congress introduced a plan to begin doing that I think everyone's still trying to digest the facts and figure out what it will do and how it will impact Vermont but what are your initial thoughts on what the GOP in Washington is looking to do in terms of federal health care policy? Well again at first blush it would appear that any states that took advantage of expanding Medicaid this would have some probably negative overtures to it so we want to look into it we're trying to digest ourselves we have our secretary and commissioners taking a look at this to see what effect it would have but again at first blush I'm not sure that we would be supportive of this but at the same time this has a long ways to go this is an initiative put out by the House Republicans this still has to go through the House and then of course they have a Senate to deal with as well so the Senate has to weigh in and again the President so we're going to offer our thoughts on this to Congress and to at least educate them as to how this might impair Vermont My understanding is it would continue to fund the expansion of Medicaid through 2020 and then transition to a sort of per capita amount on Medicaid which presumably would mean less money to Vermont under such a circumstance could the state continue the Medicaid program as it exists now it's really tough to say because those details do matter when you present it such as that and you're just assuming making assumptions that there's not going to be more money obviously that would impact Medicaid so we want to be careful we're not making those assumptions we're trying to deal with reality as it comes forward and voice our concerns such as that what happens after 2020 because when you have a certain population one third of our population is somehow enrolled in Medicaid and so it's and one third of our budget is impacted by Medicaid as well so this is a big deal for us and so we want to make sure that we protect ourselves Do you believe that Obamacare should be repealed? I've said in the past I believe that what we should have is it needs some changes there are some good parts of it there are some that need some work and I believe that that can be done that may still happen I'm not sure I've heard some talk in other circles of maybe coming up with a plan to actually just make some changes to Obamacare but we'll see it's got a long ways to go Your counterpart Governor John Kasich in Ohio, Republican came out with some pretty strong sentiments against this Republican plan in Washington Do you plan to reach out to other governors around the state to figure out how to work with Congress to make sure that it doesn't impact you too greatly absolutely as I mentioned before there are a number of other states who have taken advantage of expanding Medicaid Ohio being one Massachusetts being another Michigan being another those happen to all be Maryland I believe as well those all happen to be Republican governors as well so we'll be working with any and all in terms of finding areas where we agree coming up with a proposal that could work for our states as well and giving our input having Governor Kasich and Governor Baker who are highly regarded and I respect as well on the same side I think will be beneficial for Vermont Alright, well that is all the time we have for today so Governor thanks so much for being here Well thank you very much and on behalf of Orca Media and Vermont PBS I thank you for joining the program be sure to tune in thanks