The House Appropriations Committee is getting an early start on the Budget Adjustment Act — the mid-year realignment of state expenditures and revenues.
The committee began with an overview from the Shumlin administration on Monday and this month will go through every line item with department commissioners and agency secretaries.
As per usual, spending is up and down in an equal number of categories, but the ups are larger than the downs. The end result? The state needs $12.53 million to close the fiscal year 2014 General Fund budget.
The increase amounts to 1 percent of the $1.3 billion General Fund for fiscal year 2014. The state’s total budget for the current year — including federal funds, transportation expenditures, special funds and capital improvements — is $5.3 billion.
To an extent, the budget adjustment changes are a preview of things to come. As lawmakers discussed the budget with Jeb Spaulding, the secretary of the Agency of Administration, and Jim Reardon, the commissioner of the Department of Finance and Management, the conversation naturally turned to 2015, speculation about federal cuts to programs and the state’s $75 million budget gap.
Some of the unknowns include just how much the state will need to come up with to carry over VHAP and Catamount Health patients from Jan. 1 to March 31. The Shumlin administration recently extended coverage for those patients by three months because of problems with Vermont Health Connect.
The Shumlin administration is not only working with the Legislature to get an early jump on the Budget Adjustment Act, but is also accelerating the schedule for taking up the Big Bill. Gov. Peter Shumlin plans to give his budget address on Jan. 15 — a full week ahead of the traditional timeframe.
But back to the budget adjustment.
The total amount overspent in 2014 so far is actually $18 million — if you include a $5.5 million transfer of funds for a state building in St. Albans. The complex deal with Mylan Technologies involving a $5.5 million loan from the Department of Corrections that is going to be paid back with the sale of the facility is part of the General Fund budget instead of the capital budget.
The remaining $12.53 million will come from a cash reserve the Legislature set aside last year for emergencies.
That figure would be closer to $20 million if state employees hadn’t saved the state about $7 million in health care premium costs. Meanwhile, state workers will get a premium rate holiday for four pay periods. The state pays 80 percent of the cost of health care for state workers. The $7 million in health premium savings to the state budget is part of an overall reduction in premiums of more than $17 million across state government for positions that are paid through federal funds and special funds, according to a spreadsheet from the Department of Finance and Management.
The “ups” — the line items that are higher than expected — are mostly in the Agency of Human Services.
The state has $4.4 million remaining in a reserve to cover costs associated with federal cuts. The budget stabilization fund balance of $66.16 million will not be touched by the increases in 2014 spending.
Here is a rundown of the big ticket items:
- Medicaid spending is up by $7 million due to more utilization ($1.6 million), higher cost treatments ($1.3 million for liver transplants and newborn care), a $1.8 million drop in the federal/state match formula and a $2 million uptick in Catamount Health enrollment.
- The Vermont Veterans Home in Bennington will cost the state another $2.85 million this year because of an ongoing decline in admissions. About $1 million of that total includes a repayment to the Department of Disabilities, Aging and Independent Living for “overpayments related to Medicaid.”
- The state is looking to give the Brattleboro Retreat an additional $570,000 to cover increased utilization costs. In fiscal year 2014, the state has budgeted a total of $22 million for a variety of Retreat services. The increase in the General Fund appropriation is half of the amount requested by the administration, according to budget analyst Emily Byrne.
- A delay in opening the Vermont Psychiatric Care Center in Berlin, the replacement for the Vermont State Hospital, will cost the state an estimated $500,000.
- An increase in temporary support services for Medicaid patients who need personal care support is a $1.54 million ticket item. Last summer, the Shumlin administration changed eligibility rules for personal care. These funds are for “transitioning people off of personal care as their eligibility is redetermined,” according to Byrne.
- The state is paying rent again for state workers who have been permanently relocated after Tropical Storm Irene. Over the last two years, the Federal Emergency Management Agency and the state’s insurer, Lexington, paid for temporary office space leases. The state has set aside $1.7 million for National Life, which now houses the Agency of Natural Resources on an ongoing basis. Rent for departments in the Agency of Human Services will total about $910,000 through the end of the year.
- Emergency housing for Vermonters who would otherwise be homeless has increased by $3.22 million in fiscal year 2014.
- An increase in the number of prisoners who are shipped to out-of-state prisons will cost the state an additional $1.55 million this year. There has been an influx in the number of detainees awaiting trial. These prisoners have taken up space that would otherwise be occupied by inmates who have already been sentenced.
CORRECTION: The Retreat needs $570,000 in additional funds, not $1.2 million as originally reported.
