Preheat the oven to 350°F and lightly grease a baking dish with a small amount of the butter.
In a saucepan over medium heat, melt the remaining butter. Whisk in the flour and cook for about 1 minute, stirring constantly.
Slowly whisk in the milk and heavy cream until smooth. Add the salt, black pepper, smoked paprika, and garlic powder. Cook for 3 to 5 minutes, stirring often, until the sauce thickens slightly.
Arrange half of the sliced potatoes in an even layer in the prepared baking dish. Spoon half of the cream sauce over the potatoes.
Layer the remaining potatoes on top and pour over the rest of the sauce, gently spreading it so all the potatoes are coated.
Cover the dish tightly with foil and bake for 45 minutes. Remove the foil and continue baking for 15 minutes, until the potatoes are tender and the top is lightly golden.
Let the scalloped potatoes rest for 5 to 10 minutes before serving so the sauce sets.
