Budget adjustment: Municipal planning grants reinstated, $400,000 found for homeless programs

On Tuesday the Senate will take up H.534, the Budget Adjustment Act, which was passed by the House last week.

This routine accounting bill, in which the state makes sure its budget is on target halfway through the year, paves the way for the Legislature to move on to more pressing matters – namely resolving the $151 million budget gap for fiscal year 2011. The Douglas administration has asked lawmakers to find permanent, or “base,” savings that will carry over from 2011 to 2012 and 2013. That’s because tax revenues are expected to continue to stagnate for the foreseeable future. Next year’s budget gap is projected to be $250 million.

The Budget Adjustment Act includes about more than $16 million in changes for fiscal year 2010, and by comparison, are fairly straightforward. Most are technical, but a few stirred controversy:

• Three lawmakers spoke out against the 5 percent legislative pay cut when H.534 was introduced on the House floor last week (see Jon Margolis’ story). The cut passed with little ado, despite concerns from legislators that it was merely symbolic, particularly since reimbursements for rooms and meals were substantially increased.
• The administration proposed zeroing out the municipal planning grant program, much to the consternation of members of the House Appropriations Committee. The program had already been cut from $800,000 down to $400,000 the year before. The committee was concerned that the grants would disappear altogether from the budget for years to come, as they had during an earlier fiscal rough patch in the 1990s. Commissioner Tayt Brooks of the Department of Commerce and Community Development said if the program wasn’t eliminated, he would have to make staff cuts. The committee salvaged the program by reinstating $240,000 using $90,000 in leftover old road research funds and $150,000 in interest on investments.
• Four compliance positions in the Tax Department were left unfilled against the express wishes of lawmakers on the Appropriations Committee and the Ways and Means Committee. Legislators wanted the department to hire nine “limited service” employees to provide auditing and related services for the collection of unpaid taxes. Tax Commissioner Richard Westman said the department had a hard time filling the slots because of the temporary nature of the positions. In addition, the department, which employs about 160 workers, lost 20 staffers during the cuts last spring. Committee members were concerned these layoffs and unfilled positions were hampering the department’s ability to collect unpaid taxes, so they made the four compliance positions full time and set aside $250,000 to reinstate the five original positions as full-time slots. The cost of the hires is to be offset by tax collections.
• Advocates asked for an additional $1 million to provide overflow shelter, back rent and hotel rooms for homeless Vermonters. Thanks to some last-minute scrambling by administration officials, shelters around the state will receive $400,000, which Melinda Bussino, a longtime homeless advocate in Brattleboro, says will help, but won’t be enough to meet the demand. The money came from the Department of Children and Families weatherization program.

The big-ticket items on the table are caseload increases in the Department of Corrections and in the Department of Children and Families. Corrections asked for $2.64 million to cover the cost of 118 additional out-of-state beds for new inmates in the system. The Budget Adjustment Act also includes a $10 million increase in state funds needed for global commitment or Medicaid costs. The administration requested about $1.5 million to cover increases in the number of people seeking general assistance and disability supports. These costs were largely covered by $12.9 million from the Agency of Human Services’ caseload reserve. At the end of June, when the 2010 fiscal year ends, the reserve will be nearly wiped out; there will be about $70,000 left.

There are also a few smaller add-ins of note:

• The Department of Information and Innovation will receive $120,000 for a web content filtering device license.
• The Vermont Lottery is slated to receive $200,000 to advertise its new Megamillions game, which is to be launched this spring.
• The Public Safety Division needs $600,000 to cover shortfalls in special fund receipts. Fewer fire inspection and other permits were issued last year because of the downturn in the economy, resulting in declining fee collections.
• The Treasurer’s Office lists nearly $1 million in unanticipated health insurance costs for newly retired state employees.
• About $750,000 is needed from the General Fund to cover a shortfall in the Petroleum Cleanup Fund; and $449,166 for the Sarcoidosis Fund.

The Senate is expected to pass the bill with little fanfare.