Not only is this flag the usual bad design (ranking 61 out of 72 US State, Territory and Canadian Province flags) but it appears to be unpopular, with various calls to bring back the Green Mountain Boys flag, which was the flag used from 1777 to about 1791, it was also carried by the state Militia from the US was of independence and is still carried by the Vermont Units of the National Guard. It is also used by Castleton State College. So giving the history behind it, and it being something that is uniquely Vermontian my idea is the Green Mountain Boys flag, defaces with a simplified version of the state seal (based on the state flag of 1837 to 1923.)
I know its not perfect but it is much better than the flag in current use.