Gov. Phil Scott’s budget address was larded with the customary straw-man punching. Irritating, predictable, grind your teeth and move on. But one of those throwaway lines implied the abandonment of a policy idea that’s appeared inevitable for quite a long time. See if you can spot it:

…for those looking for a quick and easy fix to the [Transportation Fund] short fall, I want to be crystal clear, I will not support raising the Gas tax.

Okay, first of all, NO ONE is even suggesting, let alone supporting, an increase in the “Gas tax.” I haven’t heard a single person in Vermont politics even mention such a thing. (Leave the straw man alone!)

What I have heard for years, from everyone involved in transportation policy, is that we will need to transition to a broader tax mechanism that includes electric vehicles and hybrids. Cars and trucks are more fuel-efficient than they used to be, and we are embarking on a massive shift away from gas-powered transportation. Gas tax revenues are down and will keep on declining. We’ll still be using the roads, and we’ll still need to pay for their upkeep.

Various ideas have been tossed around. Most involve a miles-driven assessment (clunky acronym MBUF, see below) where you pay based on how much you drive, not how often you get gas.

But the idea was absent from the governor’s presentation, replaced by a boilerplate rejection of an idea that nobody has proposed. Given how he frames every tax reform proposal as a tax increase (because there’s always somebody who might pay more even if the aggregate impact is a tax cut), he’s implicitly signaling his opposition to any kind of transportation tax shift. If the Legislature did approve a new tax regime that properly assessed electrics for their use of the roads and highways, I believe the governor would veto it.

Not that it will come to that. At the beginning of this biennium legislative leadership, in its finite wisdom, installed Republicans as chairs of the House and Senate Transportation Committees. What are the chances of tax reform moving through those committees?

(Late add: In his newsletter Meadow Hill Sunday News, fuel industry lobbyist Matt Cota writes that “Vermont lawmakers are laying the groundwork for a mileage-based user fee — also known as MBUF” as an alternative or supplement to the gas tax. Maybe they are, but I can find no specific legislation among the hundreds of bills in the legislative hopper for this biennium. “Laying the groundwork” is highly nonspecific; it might mean nothing more than the kinds of broad discussions that have been going on for years.)

We may be stuck with a shrinking transportation tax base as long as Scott is governor. Add that to the long and growing list of challenges that will face the next chief executive, pretty much all of which have gotten worse under Scott’s, should we call it leadership?

The consequences are already being felt. Vermont Public’s Peter Hirschfeld recently reported that the transportation fund is being pushed to “a breaking point.” He reported that at current funding levels, “the percentage of state highway miles in very poor condition will rise from 6% today to 48% by 2035.”

But the Scott budget doesn’t maintain current funding, which means that dire projection is overly optimistic. His budget would lay off up to 19 people in the Department of Transportation and eliminate some positions that are currently vacant. Last summer, DOT slashed 31 jobs and delayed some projects due to lower than projected gas tax revenue. The Department may be able to patch things up and keep moving, but this is a decline that will get worse and must be addressed.

So how does the governor plan to help the T-Fund? By cutting funding for public schools, naturally.

In his budget address, Scott highlighted all the non-property-tax revenue sources that help pay for public education: the sales tax, the lottery, and portions of the rooms and meals tax and the vehicle purchase and use tax. His clear intent is to wean public education from all those sources. He doesn’t want to rein in the price tag for education — he wants to slash the cost of the system.

And he needs to, thanks to his staunch opposition to any kind of tax reform. His FY2026 budget would cut the schools’ portion of the purchase and use tax (currently $42 million, per Scott) by $10 million this year, and he wants to phase it out entirely over time. The funds could then be directed to DOT. If Scott’s $10 million cut in school funding doesn’t happen, there could be more layoffs and delays at DOT.

But that’s not the bad news. As Hirschfeld reported, state transportation spending relies heavily on federal dollars — which are now at risk because of DOT cutbacks:

Analysts for the Legislature say state transportation revenues are about $33 million short of what Vermont would need to maximize its federal drawdown in the next fiscal year. That deficit would cost the state an estimated $163 million in lost federal revenue, unless lawmakers and Republican Gov. Phil Scott decide to plug the gap.

Scott’s proposed 19 DOT layoffs would save an estimated $4 million in FY2026. How many more cuts would come if we don’t draw down that $163 million in federal funding?

Hirschfeld’s report was posted on January 13, before Scott delivered his budget address — which did not include a plan to qualify Vermont for full federal funding, leaving it to the Legislature to clean up his mess. And putting pressure on lawmakers to go along with his plan to strip the Education Fund of its non-property-tax revenue sources.

It’s clear from the budget address that Scott’s vision for higher education involves substantially lower cost. It’s his only option for maintaining state government in the absence of (a) tax reform or (b) the kinds of savings that never materialized from his long-abandoned “lean management” concept.

He’s not presenting it that way because cutting schools would be deeply unpopular. But that’s the road he’s driving us down. Be prepared for a bumpy ride.