(The Center Square) — Vermont Gov. Phil Scott warned of financial challenges in his annual address to lawmakers, urging them to show fiscal restraint in crafting a spending package for the next fiscal year.

In his 2024 State of the State address on Thursday, Scott cautioned that the state faces tough decisions as it recovers from last year’s devastating floods and adjusts to dwindling federal pandemic aid in a changing economy. He said that will require the state to slow curb growth to 3% in the state budget.

“Once again, we’ll face the discomfort of saying ‘no,’ choosing between many good things and maintaining the discipline to focus on what Vermonters need most,”‘ he told lawmakers.

The Republican, who took office in 2016, acknowledged that with supermajorities in the House and Senate, Democratic legislative leaders hold the cards when approving a final spending package.

“I’m a realist, and I know you have a supermajority. You’ve proven the final budget, and the growing burden of taxes, fees, and other policy-driven costs is in your hands,” he said. “So all I can do is make my case.”

Scott noted the projected 18.5% increase in education property tax rates that the Department of Taxes for next year. He said the estimate represents a potential $250 million in new tax obligations, or about $650 a year on average for a household that lives in a $250,000 home.

“Think about those folks that are just barely getting by, living paycheck to paycheck, already deciding what bills to pay and what to do without,” he told lawmakers.

He suggested that lawmakers could help lower the cost of education by taking steps such as consolidating schools, setting minimum classroom sizes, and pushing for a statewide teacher contract.

He also highlighted the impact of an ongoing labor crunch on the state’s employers and the dwindling number of school-age children whose families are leaving the state.

Scott noted an uptick in violent crime in some communities, and while he didn’t mention specific policy proposals he’d be pursuing, he called on lawmakers to improve public safety. He said violent crime has increased by 56% in the past decade, while aggravated assault has risen by 65% during the same period.

“We cannot deny these trends,” Scott said. “When those who victimize others are put back on the streets hours after being apprehended, only to reoffend again and again, Vermonters question law enforcement, prosecutors, our courts, and they question the wisdom of the work done here in this building.”

Scott urged Democrats to work with his administration to craft an austere spending plan that minimizes the financial impact of average Vermonters.

“To meet this moment, we are going to have to prioritize, set aside good things that are less urgent, and rise above the toxic polarization of America’s political parties to focus our work directly on these fundamental issues,” he said. “If we do, we’ll turn catastrophe into opportunity once more.”