MONTPELIER — Vermont Gov. Phil Scott signed lawmakers’ state budget proposal for the 2026 fiscal year into law Wednesday. The plan lays out $9.01 billion in state spending for the yearlong period starting July 1 — and includes a handful of new measures designed to limit the impacts of potential cuts to the state’s federal funding. 

Scott, a Republican, was notably complimentary of the House and Senate’s budget bill in a letter to legislators that accompanied his signature. Democratic leadership in both chambers, knowing they almost certainly could not override a budget veto this year, trimmed tens of millions of dollars in proposed “base” spending — money expected to be appropriated year-over-year — from the legislation after Scott insisted on cuts. 

The governor had proposed an $8.99 billion state budget in January.

“I appreciate that this budget makes important affordability investments,” Scott wrote, pointing to lawmakers’ use of about $75 million from the state’s general fund that’s expected to help reduce the property tax bills people pay to support education. 

Scott also complimented how lawmakers set aside about $13 million in the budget to offset a slate of proposed tax credits that would benefit low-income families, workers and veterans, as well as retirees and people receiving military pensions.

The credits are included in a separate bill, S.51, over which House and Senate leaders still need to work out their differences in a joint conference committee.

While the state budget is typically lawmakers’ last act before adjournment every year, this year, there are still several major bills working their way through the Statehouse that deal with some of the headline issues from last fall’s election. 

In his letter, the governor urged legislators to pass a version of this year’s landmark education reform bill, H.454. The bill is being debated on the Senate floor Thursday as school district leaders — and a number of senators themselves —  have panned the language that several of the chamber’s committees drafted in recent weeks.

Senators were weighing to what extent they should revise their version of the bill to be more in line with what passed out of the House last month. That version appeared to have more support among the members of the Senate’s Democratic majority. 

Scott has threatened to use his power to summon lawmakers back to the Statehouse if they adjourn for the year without reaching agreement on an education bill. 

“While not perfect, (the budget bill) makes critical investments in affordability, housing, education and public safety,” the governor wrote Wednesday. “But we must focus on the policy bills that fix what’s broken so the funding can have its intended impact.”