[L]awmakers got a preview of the budget struggles ahead in an all-day meeting at the Statehouse Tuesday.
When legislators return to Montpelier in January, they’ll need to put together a budget for fiscal year 2017 that will make up for a projected gap between state revenues and spending of some $58.5 million.
But first, they will need to pass a bill amending the current budget to address an estimated $40 million shortfall, according to the non-partisan legislative Joint Fiscal Office.
In both cases, Medicaid spending is a major factor.
Senate President Pro Tempore John Campbell greeted the joint meeting of the House and Senate, acknowledging that lawmakers have another tough budget year ahead.
“But I think as always we’ll be able to work to find that Vermont solution,” the Windsor County Democrat said.
The administration will deliver the budget adjustment proposal to the House Appropriations Committee in two weeks, giving lawmakers a chance to get a jump on the bill before the Legislature convenes in January.
Rep. Mitzi Johnson, D-South Hero, who chairs the committee, said that none of the information presented to lawmakers Tuesday came as a surprise.
“We know that Medicaid enrollment has been a bit higher than predicted and that utilization has been higher, which is going to be a challenge,” Johnson said, but she went on to say that the high utilization rates reflect the success of the state’s effort to improve access to health services.
Johnson also cited opiate addiction as a factor in driving up state spending, from child protection, to public safety, to the judiciary, as well as having impacts on many other areas of state government.
For Johnson, a major concern is ensuring the state budget is in shape to weather more difficult economic years ahead. Recessions tend to come in cycles, she said, and it’s possible economic growth could slow in the near future.
In light of that concern, she said she feels it’s important that lawmakers “really make sure we’re investing Vermont’s dollars in the top priority areas for what our state needs.”
In terms of the FY 2016 budget adjustment, Johnson wouldn’t speculate on the impact the $40 million figure may have on state services. However, she said, it does not necessarily mean that the state will raise additional revenue to that level, she said.
“It does not at all take into account any of the places where expenses are less than predicted,” Johnson said.
House Minority Leader Don Turner, R-Milton, questioned whether the administration would propose policy changes in the budget adjustment act.
Turner said that he would like to see lawmakers consider making changes in budget adjustment, such as delaying the roll-out of programs, “things that could be done starting in January to limit the amount of projected budget gap going forward.”
“Now I’m not proposing, and please, I want to be clear, draconian cuts to anything,” Turner said. “I’m talking about shaving around the edge.”
Medicaid spending is of significant concern for House Republicans, Turner said.
He praised the administration’s effort to verify eligibility of Vermonters on Medicaid, but he said there is a need to balance expansion with the scope of benefits the state offers.
House Majority Leader Sarah Copeland-Hanzas, D-Bradford, said that “as a general rule” lawmakers do not change policy in the course of the budget adjustment bill.
“In order to give that the fair consideration that would need, it might take us as long as it does to pass the FY 17 budget,” Copeland-Hanzas said.
Like other lawmakers, she cited healthcare as a major concern, but noted it’s not a surprise.
“It’s no surprise that healthcare continues to chew up a bigger and bigger part of our budget,” Copeland-Hanzas said.
