Fiscal year 2015 did not go as predicted for the state, but the end result is a mid-year budget adjustment that will bring state spending down by another $12 million.
The Shumlin administration and the Vermont Legislature approved a budget bill in May that has been subject to more change than usual.
Gov. Peter Shumlin will give a much-anticipated budget address for next year’s state spending plan on Thursday afternoon and he will outline how his administration will address a $100 million budget gap in fiscal year 2016.
Meanwhile, his staff has been in the Statehouse this week explaining to lawmakers how they plan to finish balancing last year’s budget.
Economists downgraded the state’s revenues by $30 million in July, and the administration and a group of lawmakers decided to cut spending to make up the difference.
Then in the fall, as personal income tax receipts continued to decline, Jim Reardon, the commissioner of the Department of Finance and Management, asked commissioners and secretaries to find the money in their budgets. Reardon instituted a hiring freeze and asked state leaders to eat an 18 percent increase in state employee health care costs.
The cost-cutting measures appear to have been successful. Though a number of agencies and departments had ups and downs in the first six months of the year, the mid-year budget adjustment has resulted in a $12 million reduction in spending.
The General Fund budget as enacted in May was $1.447 billion. If the budget adjustment proposal doesn’t change, state spending will go down to $1.413 billion. That number represents a 1.8 percent increase over the fiscal year 2014 budget, which was $1.388 billion.
In the 2015 budget adjustment, Reardon sets aside $17 million in a reserve fund that could be used in the fiscal year 2016 General Fund budget.
In remarks to the Democratic Caucus on Tuesday, Mitzi Johnson, the new chair of the House Appropriations Committee, described the budget adjustment bill as a “true up” of state spending. Johnson said the committee had only had the bill in its possession for 24 hours at that point, and details are still emerging.
Johnson highlighted a few salient ups and downs, including:
The Shumlin administration wants to continue to support the Vermont Veterans’ Home with a $2.1 million appropriation.
A few of the downs include permanent reductions to base spending. Two notable changes include: a $500,000 reduction in funding for the Judiciary Branch in fiscal year 2016 and a $435,000 cut to temporary housing vouchers for the mentally ill in the current year. Reardon did not explain how the judiciary would find the savings; Shumlin administration officials said a nonprofit program could help with housing for homeless people with mental illness.
The Vermont House Committee on Appropriations will hold two public hearings: 1:15 p.m. to 2:15 p.m. Wednesday, Jan. 21, in Room 11 at the Statehouse and 9:30 a.m. to 10:30 a.m. Thursday, Jan. 22 in Room 10 at the Statehouse.
The proposal can be viewed at http://www.leg.state.vt.us/jfo/budget_fy2015.aspx.
Members of the public who wish to testify on the budget adjustment proposal should reserve a 3-5 minute time slot in advance. To do so, please contact Theresa Utton-Jerman at 802-828-5767 or toll free (800-322-5616) or e-mail tutton@leg.state.vt.us.
