Some of the moving pieces in the state’s budget have changed since the Vermont House passed the Big Bill and sent it to the Senate a few weeks ago.
The numbers before state senators today, as they debate their own version of the bill for final passage, include a gaping hole of unanticipated costs totaling $17.25 million – on top of unresolved Challenges for Change savings of $18 million the Legislature is counting on to balance the budget. The appropriations bill passed on a voice vote on second reading Monday.
The budget gap at the beginning of the year was $154 million; the additional new costs now bring the total to $167 million, state officials say. The Senate Appropriations Committee budget is balanced for fiscal year 2011 and leaves the state with a deficit of $111.9 million in fiscal year 2012.
About half of the new costs, however, are resolved through Education Fund shifts. The Senate Appropriations Committee proposes moving $6.89 million in special education Medicaid money from the Education Fund to the General Fund and nixing the General Fund payment of $2.3 million to the Education Fund.
The original estimate for the fiscal year 2012 shortfall was roughly $250 million. The governor’s budget includes a $110.29 million deficit for 2011, and the House budget gap is listed at $95.52 million for fiscal year 2012. Neither balance sheet includes the new $17.25 million gap.
The Senate Appropriations Committee budget, which was passed out of committee last week on a 6-0 vote, uses $62.8 million in additional federal Medicaid money (available through stimulus funding) for a series of one-time expenditures, while the House budget set the whole amount aside in a human services “caseload reserve” or savings account. Senate Appropriations spends $20 million of the Medicaid money on information technology upgrades; $15 million on a 15-bed secure mental health facility and $7.2 million for budget adjustment.
Here is a rundown of the $17.25 million in new costs, and the Senate’s proposal for resolving the new shortfall, as cited in Joint Fiscal Office documents:
* The Vermont State Hospital was not recertified by the Centers for Medicaid and Medicare Services; hence, the state won’t be receiving that $8 million that lawmakers and the Douglas administration were banking on for a break-even bottom line.
* The newly passed federal health care reform law comes at a cost of $4.82 million to the state.
* “Technical changes” in the Agency of Human Services global commitment estimates will cost the state $900,000.
* The 6 percent production tax deduction cap the House thought would reinstate $4.3 million in state revenues will actually only put $1.7 million back into Tax Department coffers. The upshot? A $2.6 million budget hole.
The Senate Appropriations Committee has filled these gaps through an assortment of small, unexpected savings and shifts including: A technical change in the tobacco tax ($1.1 million); revenue from a Fairpoint fine ($400,000) to the Vermont Telecommunications Authority; debt service savings ($2.7 million).
About half of the new costs, however, are resolved through Education Fund shifts. The Senate Appropriations Committee proposes moving $6.89 million in special education Medicaid money from the Education Fund to the General Fund and nixing the General Fund payment of $2.3 million to the Education Fund. Another big-ticket item – part of the long-term care budget, which pays for the care of elderly Vermonters — is paid for through anticipated federal Medicaid funding ($2.1 million).
