 Vermont PBS in cooperation with Orca Media and the Vermont Press Bureau presents Capital Beat, the Week in Review, from the Vermont State House. Here's host, Neil Goswami. Welcome back everyone to Capital Beat. I'm Neil Goswami with the Vermont Press Bureau and we are pleased to be back in the State House this year working with Orca Media and Vermont PBS to bring you interviews each week with key lawmakers and administration officials as the session wears on. We are in the Governor's ceremonial office this week and we are very pleased to welcome in Governor Phil Scott for his first extended interview since taking office last week. Governor, thanks so much for being here. Well, good afternoon. Thank you for having me on. So as I mentioned, it's been a week now. Any surprises? Have you found out any cool secrets that you can share with the people of Vermont? Well, I can share one story which is somewhat unique. It was the day after the inauguration and I'm an early riser. I've been in the construction industry almost my whole life. So I get up early and it didn't stop. I went, of course, I don't have any business to go into anymore so I went right to the fifth floor of the pavilion where the executive office is and it was around 6.30 or so. Not much going on on the fifth floor at 6.30 in the morning. So I did some things there and then thought I'd come over here to the State House and went in with my detail, ran up the stairs, came to the office door, no key. So at that point to ask the detail if he had a key, he did not. Went down to the Sergeant and Arms office, nobody there. Went to the Capitol Police, nobody there. And at that point I thought, what am I going to do? Going aimlessly throughout the building that I've served in for 16 years with no place to go. And then I thought, I know how to get in. I'll talk with Kevin. Kevin from the custodial staff and he came up and let me in. And I thought to myself after the day after the inauguration, I talked about this and my inaugural address about those on the front line, those in the trenches, those are the folks that we should be listening to. If we have a problem, we should be asking them to help solve it. So you found that out right away? First day. Yeah. Yeah. Aside from no longer having to carry keys, have you found anything surprising about this new role for you? It's just, it's non-stop. We're pressing go most of the time. And I'm used to working long hours. That doesn't bother me. The pace is tremendous, but it's great. It's exhilarating, exciting. But we have a lot to do in certainly facing the budget challenges that we have. It's a bit daunting. Yeah. You are one weekend to the job on your first day in office, and mere hours, I guess, after being sworn in. You signed four executive orders. Can you tell us a little bit about what those executive orders are and how they will shape your administration as it moves forward in this first term? Well, one of the executive orders was to set the agenda in terms of what my administration is going to be, my vision, in terms of the overall, the 30,000-foot vision. And it's about improving, growing the economy, about making Vermont more affordable and taking care of the most vulnerable. So that executive order went out to the administration, and I'm asking each and every one of our department heads, our secretaries, commissioners, to think of that every time they do anything, think about that executive order and what can we do to improve the lives of our monitors? Treat them as customers. And so that was part of the basis for that executive order. The other was the Opioid Coordination Council. And it's something, again, I spoke about on the campaign trail, that we have a tremendous challenge ahead of us. And I give credit where credit's due. Governor Shulman had brought this to our attention in the State of the State Address a number of years ago, and it proved to be the case that this may be one of our greatest challenges at this point in time. So we are wanting to move forward with that. I've announced a Coordination Council director, executive director of that, and that will be Jolinda LeClaire, as well naming those on this council that will seek to coordinate with others throughout Vermont in trying to adopt common themes and messages and what are we doing right, what are we doing wrong, how can we work together and really confront this problem that's before us. The last two were about the government modernization. And I believe that there are many opportunities throughout state government to take a look and see what we can do to streamline the process to make it more efficient, utilizing IT and trying to cut through some of the layers of bureaucracy. Your inaugural address was... there were no real unexpected issues brought up. There were four key points that I think everyone that works in the state house, works in state government would agree with that are things that should be addressed over the next two years. You talked about combating opiate addiction. You talked about transforming the education system here in Vermont. You talked about realigning our budget choices to grow with the growth of state government. And then you talked about reinvigorating the economy and taking a new approach to our economic development tools that we have. As I said, I don't think anyone would disagree with those four key points, but what can you tell us about transforming education here in Vermont? What does that mean? And I will say that there are a number of people that work in the state house, lawmakers and others that thought they were hearing you say you wanted to take some money from K-12 education and redistribute that to early education and higher education. So maybe you can clarify for us a little bit more what transforming education means to you. Sure, and we'll have more details as the next couple of weeks come together, particularly in the budget address. But you're right. What I spoke about on the campaign trail was, again, the challenges before us. We spend a billion six to educate 86,000 kids. That's 20,000 less than we were 20 years ago. So the budget increases. The amount of student population decreases. So at the same time, we are finding that early childhood education is extremely beneficial in the long run. The studies, the science shows that the brain develops tremendously during the first five years of a person's life. So the sooner we can get to them to properly educate and to try and utilize that portion of their life in a much better way, the better off we'll be as a society in years to come. So that coupled with the fact that we're one of the least spending in terms of higher ed of any state amongst the bottom. So we have both sides of that, but yet through K through 12, we're spending almost $19,000 per student and we're not number one in the nation in that regard. So my thought is that we're focusing all on K through 12. We're spending enough money. We just need to redistribute some of those resources to broaden pre-K as well as the higher ed as well and training for the jobs that are here today that we need to help in. So do you plan to propose a way to redistribute some of the K through 12 funding yourself, or what should Vermonters expect when you fill them in on Tuesday, the 24th of January? Well, again, we're trying to determine how we're going to move our way through that. Certainly, we need the legislative legislators to get on board with us and we're working on some of those maybe proposals right now and how we engage. Because as I've learned, I've served in this body for 10 years as a senator, six years as lieutenant governor. While you need a vision, you need a leader that will bring about new ideas and proposals. You can't do it alone. You need to have a legislative buy-in. And so I am looking to find ways where we have common goals and so that we can march in the same direction together, collectively, in order to accomplish that. And I believe that we may not agree how to get there, but I think most would agree with some of the proposals that I'm laying out and that being one. And do you see your goal to transform education in Vermon as coming in one big, bold proposal or a series of steps over a number of years moving forward? Yeah, probably a little bit of both. And we're trying to determine what the best approach is at this point in time without giving away the store. I know you won't tell anybody. No, nobody will know. You can tell me. Exactly. But we'll learn more in another couple of weeks. You noted a few minutes ago that Governor Shumlin started this conversation here in Vermont about opiate addiction and really, in some ways, launched a national conversation about how to deal with opiate addiction and whether it's a criminal justice problem or a public health problem. You spoke about in your inaugural address of continuing that and moving forward in an effective way. So in your view, what are the next logical steps for Vermont to take as it looks to reduce the number of Vermonters that are addicted to opiates and finding new ways to help them? I look at the crisis that we're facing today as a three-legged stool. And one leg of the stool is prevention. The next leg of the stool is treatment. And the third leg is enforcement. And it really is about a balance of the three in order to accomplish. We're not going to treat our way out of this, nor are we going to enforce our way out of this. So it's going to be a combination of both of those, as well as trying to prevent it from happening to begin with. And that's a tall order. And it's not as though we're the only state that's facing this issue. We're not unique. But at the same time, it seems to have affected our economy and the daily lives of Vermonters more significantly. And maybe it's because we're such a small, rural state. But if those out there who are listening don't think that this has an effect on them, then they're just unaware because it does. It affects our economy. It's leading to many crimes throughout Vermont. And it's really an epidemic that we should be treating much differently. If this was an epidemic, a real health epidemic that we, a disease of some sort that came to our state and started taking lives as fast as this is today, we'd be treating it much differently. And I would say that we need to treat this the same way. You want to create this new council. You created this, I don't know what the exact title, I'll call it the opiate czar. And you want to hold this convention or forum about opiate addiction later this year. So how broad, in terms of this new position, how broad will their powers be to get in, get their hands dirty and figure out what the next step should be? Well, this, the, Jolinda, the coordination of this czar will report directly to me on an ongoing basis. That's important to note. So their power is somewhat broad. And we don't know where this is taking us. As I, during, when I was Lieutenant Governor, I had the opportunity to go to Rutland and see Project Vision that they had implemented successfully in their community. And I watched what they did. I sat in on a couple of their meetings and I was struck by how outside the box this really was that you would contemplate having someone from corrections, enforcement, even maybe a building inspector, many different people from all walks of life within government and outside to be part of this so that you could really watch for the hot spots. Where, where are you, where's the most, where's the biggest challenge? And really trying to help one another out to solve this problem because many times, you know, if you work in a silo, so to speak, you think that the problem has been solved but it's really just been pushed to another area. And this is a way to really look broadly about where the problem areas are. And I'd like to take this somewhat, this concept somewhat to a statewide level so that we don't just solve the problem in Brutland, let's say, that it just moves it to Springfield, for instance. I think that what we need to do is to look at this broader and holistically. When you, two years from now, if you're entering your second term or when you look back, what will you see, what will it take to be successful? What does success look like in the battle against opiate addiction? Losing less of our youth and having less of those, fewer of those needing treatment. Certainly we need to track that and develop a baseline and then see some of those issues where it's affecting the daily lives and really ripping families apart and literally figure out as well that we need to address the issue. So when we have less of that, then we're moving in the right direction. Are we going to solve it totally in two years? Probably not. Your team is working on a 2018 fiscal year budget right now. You have a plan for the mid-year budget adjustment for the current fiscal year right now. And we know that we are very likely looking at a revenue downgrade next week from the state's economists. So how is that budget process going? Yeah, very difficult, challenging. It appears that there's going to be a revenue downgrade in total of about $70 million for the next fiscal year. We'll be starting out with less revenue than we had starting out last year, even after the changes and the increases in tax and fees. So that's daunting in some respects. I've been fortunate though in surrounding myself with good people soon after during the transition. Not only do we have to hire a number of the whole administration, but as well putting your policies into place, promises you made along the campaign trail that I believe we should follow through on, as well as developing a budget that lives within our means that doesn't grow faster than the economy of wages. So in doing so, I was fortunate to coerce Neal Underville into coming back into service. The mayor was gracious enough to let us use Neal during this time, and he built a team as well. We asked people, Jim Reardon, a former finance commissioner, is also on board, as well as a number of others, business people and people from all persuasions. Even people that didn't vote for me, which is okay because it told me a lot about them that they want, they're doing it for the right reasons, for the betterment of Vermont, and they know the challenge we're facing, and I appreciate that. That means a lot to me. You mentioned promises made during the campaign, and there were a couple of big ones. The budget growth issue, not growing faster than the rate of Vermont's economy and wages. And then you also promised that you wouldn't accept higher taxes or fees. When you have a budget gap, when you have a revenue downgrade, as we expect next week, you've sort of boxed yourself into a very tight position here, and are you going to be able to hold on to those promises when you deliver the budget address in a couple of weeks? Yeah, this short answer is yes. Is it going to be challenging? Yes. And it's going to be difficult. We're going to need a lot of cooperation in order to do so. But budgetary issues are something that I face throughout my whole life in business personally, and you fall back to finding ways to become as efficient as you can. Delivering the services that you must while staying in business, so to speak. And I believe that we'll find enough efficiencies in government. We'll think outside the box. We put our talented team in place in order to do so. And we'll follow through on my promise. Are you bracing for a lot of blowback or pushback from groups that are always hoping to see more funding rather than less or equal funding? I would say that I may not be the most popular person in the room in two weeks, but I might be one of the more practical people. And I would only say that we may have this bit of pain over the next couple of years, but if we play our cards right, if we do this and we roll this out and we implement procedures and policies and put those into place, we'll be much stronger in the long run and then we'll be more sustainable and short-term pain, long-term gain. And I truly believe that. So it's going to take all of us working together. I don't have all the answers. And my budget, I'm willing to listen. If somebody has a better idea on how to do this without raising tax and fees, I'm here to listen. It's something I've done my entire political life and tend to continue to do so. There are sometimes fees in state government that are indexed to rise automatically with the rate of economic growth. Would you consider that to be a fee increase? Would you ask lawmakers to sort of change legislative language to stop them from rising at that level? I wasn't considering those when I made that statement. My belief is that without taking physical action, without raising fee increases from a legislative standpoint and our taxes for that matter. I want to switch gears a little bit to health care. Mon Health Connect was an issue during the campaign and about how the state should deal with its health care exchange in the future. You said during the campaign that you wanted to look toward the federal exchange or toward a partnership with other states. There was the report that came out, the independent report that said, perhaps the state is best off trying to fix Mon Health Connect so that it works properly rather than going in a different direction. I presume in a couple of weeks you will touch on this issue in your budget address but in your own mind behind your office door when you talk to your aides have you determined which direction we're going yet? We're working on that. Obviously we're in a bit of a holding pattern because of the federal government. What's going to happen to the Affordable Care Act? What is there going to be a repeal? We certainly don't want to waste our limited resources with another mistake. I'm being a bit cautious at this point. I believe even the report that was given may have a different feeling after the election than before. We're in uncharted waters and so we're going to continue to move forward. I still believe that the exchange is not functioning properly. It should be replaced. We should transition to something else that is accessible. I haven't been an advocate for repeal of the Affordable Care Act. I think there's some provisions in there that are helpful. But we'll live with whatever they do. But I'm looking forward to whatever the replacement might be and how that might benefit Vermont. Will Vermonters have a clear sense of where you want to go in two weeks in that budget address? We're certainly hoping so. Again, it will be a very honest approach. We're going to lay our cards on the table and we'll give my vision as to where I think we should be going. You're not the only new leader in state government. In fact, the top four positions are all new. Lieutenant Governor, Speaker of the House, Senate Pro Tem. You're known as a laid-back, nice guy who works well with others. How do you view the personalities of the other three top leaders now? And how do you see the four of you working together this session? Well, I certainly find areas of common interest with all. I'm here to help Lieutenant Governor Zuckerman any way I can because I served in that position over the last six years. We have a good rapport. I enjoy working with him and talking with him. So I'll be helpful in that respect. I've also worked with Senator Ash within the legislature as president of the Senate as well as the senator myself. And I appreciate his intellect. I appreciate his willingness to think about things pragmatically and his respect for the office. So I respect what he's already done thus far. And I think that we'll have a good working relationship as well while I haven't had a close relationship with a speaker, Speaker Johnson. Over the years I've known her for a number of years but never worked with her. But thus far she's talking about the same things that I am about looking at state government, finding ways to do things more efficiently and really thinking outside the box. So I believe that we can always find ways to work together and find common goals and let's focus on those and get to have some progress. Inevitably in any legislative session, even when the governor and the legislature are from the same party, there are sticking points. Do you have any in the back of your mind? Are you looking at anything now that you think could be a sticking point between you and the democratically led legislature? Well, time will tell. I think we'll learn more in a couple of weeks, certainly. Even, as you said, even if you're of one party, you don't always agree. And I'm prepared for that. And we'll, again, I look for ways where we can work together, where we can agree. And we'll disagree. I'll do so respectfully and civilly and show maybe the rest of the country how we can work together and not be so polarized. I've got about 30 seconds left. I just want to ask you, what would prevent you from signing a medical marijuana expansion or a legalization of marijuana for recreational use? Legalization. I've spoken about that a number of times. When I was in the Senate, I actually voted for medical marijuana. So that's not an issue. But the legalization issue is impairment on our highways, edibles, trying to figure out a tax structure that works. I think we should be learning from the other states that have legalized before we move forward with this initiative. I'm not saying no, I'm just saying not now. All right. Governor Phil Scott, thanks so much for inviting us into your ceremonial office here. We appreciate it. It's ours. It's the people's house. All right. Well, we'll come back then. Thank you. And we thank you for tuning in and watching. I'm Neil Goswami from the Vermont Press Bureau. And on behalf of Orca Media and Vermont PBS, we hope you'll tune in next week to see some more interviews from key lawmakers.