House lawmakers late Friday afternoon did a major budgetary shuffle, cutting Gov. Peter Shumlin’s planned $16.7 million child care subsidy down to only $3.323 million and eliminating $6 million earmarked for energy efficiency. The proposal is a milestone in a tense budget year.
The House Appropriations Committee retained $2.5 million in scholarship funds for Vermont college students, an item the governor requested in his inaugural and budget addresses, which both centered on new education initiatives.
The committee kept $6 million for the Low Income Home Energy Assistance Program (LIHEAP), which subsidizes fuel for poorer Vermonters. Meanwhile, lawmakers docked funding for the Clean Energy Development Fund, which promotes renewable energy, from $5 million to $2 million.
Appropriations Chair Martha Heath said in contrast to the governor’s budget plan, the House proposal restrains spending and sets aside $7.7 million in reserves as a hedge against federal sequestration cuts.
“Because the funding sources didn’t work, there were some proposals we just couldn’t fund,” Heath said on Friday. “The major difference is that it leaves something like $7.7 million in reserves, and the governor put nothing in reserves.”
“We have federal sequestration facing us, and so it feels really good to have put some money away, so that we can make wise decisions,” said Heath.
House Speaker Shap Smith has said previously that the House would reject much of Shumlin’s proposed new spending. Federal sequestration cuts are estimated to reduce Vermont’s federal grant funding by $15 million. So far it appears that the state’s General Fund could see a $6 million to $10 million hit from the federal cuts, according to Steve Klein, director of the Joint Fiscal Office. More reductions are likely coming as Congress settles on a continuing resolution for next year’s budget this week and as they make more spending adjustments to stay under the debt ceiling in May.
The committee spent much of Friday afternoon trimming down a “wish list” of about $63 million in spending requests to just $35.9 million in budget items, which balances with the funds available.
Lawmakers identified five or six major priorities they’d like to fund, with each item surviving several rounds of votes before the committee came to a consensus on how to deal with smaller budget items.
In House Ways and Means, too, the chamber’s key tax committee voted on how new taxes would fund this increased spending.
Perhaps the most visible and severe reduction came as the House Appropriations panel took $13 million from Shumlin’s desired $16.7 million towards child care subsidies, which he hailed in his budget address as the largest investment in early education in the state’s history.
Shumlin had wanted to fund that by transferring $16.7 million from the state’s earned income tax credit, an approach widely criticized by lawmakers from all three parties. The Appropriations Committee on Friday didn’t address capping the welfare Reach Up program, a move which would save about $6 million, saying they’d keep that debate for Monday.
In other items, the committee agreed to keep health care subsidies for those forced into the new health care exchange next year at $4.35 million. Those previously on the VHAP and Catamount state health programs are expected to pay thousands more in the exchange next year as those state programs disappear.
Heath said her committee approved the level of subsidies which the House Health Care Committee agreed upon in recent weeks. She said her committee couldn’t boost subsidies because they made tough investment choices in other areas like education, in a tight budget year.
The committee also provided the Vermont Veterans’ Home with $1.34 million in funds, for the home’s overtime, temporary, and shift staffing costs, but decided against helping with the home’s $2.1 million budget deficit.
They plan to decide in October on further funding for the veterans home, as they await more detailed information on the status of the facility, which has suffered much turmoil in recent months.
House Appropriations also pegged funding for the arts at $240,000. This money would support the Council on the Arts, the Vermont Symphony Orchestra, the Vermont Historical Society and the Vermont Humanities Council.
Medicaid reimbursement rates for health care providers were increased by $10.6 million, and school lunches became free for students now on reduced cost lunches, at a total expense of $322,250.
Programs that lost out on Friday include the Working Lands Enterprise fund, which lobbied for $3.5 million extra money, but only received $325,000 more. Vermont Public Television and the Tourism and Marketing department, among others, also failed to convince lawmakers that their projects were worthy of additional funding.
“We clearly spent less than the governor, and we put a significant amount of money in reserves,” said Heath. “But we’ve made investments in areas that we think will make a difference.”
