Business & Economy

House budget panel narrows spending gap to $18 million

House Appropriations Chair Rep. Kitty Toll, D-Danville. Photo by Anne Galloway/VTDigger
On Friday, as lawmakers were leaving for the Town Meeting Day break, the House budget panel whittled down the state’s budget gap from $72 million to $18 million.

The House Appropriations Committee performed that miracle by accepting a number of budget proposals from the Scott administration.

At the same time, lawmakers made a point — one more time — of wholly rejecting Gov. Phil Scott’s big idea: Shifting costs for teacher retirement from the general fund into the education fund. The money ($39 million) was to come from level funding local school district budgets that are voted on locally.

As Town Meeting Day looms, school districts are expected to pass budgets as is, raising property taxes by about 2.35 percent, according to Shumlin administration figures from December.

And House budget-writers are keeping the $35 million teacher retirement nut in the general fund budget.

Scott’s proposal to save $15 million from a mandated teacher health care contribution of 20 percent appears to be a goner. That money would have been used to pay for higher education ($4 million) and child care ($9 million). Both proposals are now dead.

Democrats in the House say Scott’s proposed structural changes in the state’s $1.6 billion K-12 education system “had serious flaws.” They accuse the governor of balancing the general fund budget on the backs of property taxpayers.

Rep. Kitty Toll, D-Danville, and chair of the House Appropriations Committee, said Scott’s plan “wasn’t ready for prime time.”

“It didn’t work in Senate Education Committee, it didn’t work on House floor, and it didn’t allow for the committee process which truly needs to be respected,” Toll said.

Scott asked the Legislature to move the date for school budget votes from March to May.

Toll said school districts wouldn’t have been able to level fund budgets without laying off teachers. Reduction in force notices have to go out to school employees by April 1.

“The timing had serious flaws,” Toll said. “I’m a strong proponent of local control, but more importantly, the proposal for the budget needed to be vetted through a committee process.”

Meanwhile, there is a budget to close. The House typically votes on the Big Bill in the last week of March. That means the House Appropriations Committee has a very short window to find more savings.

House Speaker Mitzi Johnson has accused the governor of refusing to provide lawmakers with alternatives to his education plan and says that the Scott administration has not been “a partner” in working out budget details.

Consequently, lawmakers say they had to start from scratch. They are working with a current services budget adjusted for inflation.

“It’s a subtle but unusual way to start the budget, but there weren’t a lot of other options,” Johnson said. “When you took the education piece out, it didn’t leave us with a lot to work with.”

While the budget panel scrapped Scott’s education proposal, lawmakers have accepted many of the line item changes from the governor’s office.

There are no new revenue proposals on the table right now, but Johnson has not ruled out the possibility that property taxes might go up as a result of general fund spending.

“We’re trying to see how far the appropriations committee can get,” Johnson said. “We haven’t ruled anything out.”

Toll says the budget panel has accepted the following proposals from the Scott administration:

  • $4.5 million in savings from “management and positions” in state government.
  • Allowing individuals who don’t qualify for subsidies to move out of the Vermont Health Connect system and apply directly for medical insurance. That saves $2.8 million.
  • Reducing charity care payments to hospitals by $1.7 million
  • $6.5 million from savings in Medicaid
  • $18 million from the State Children’s Health Insurance Program

The House Appropriations Committee rejected a proposal to move $10 million in projected Medicaid savings into a caseload reserve because the money was not included in the consensus forecast originally developed by the Joint Fiscal Office and the Department of Finance and Management. Johnson accuses the Scott administration of subverting the consensus forecast process. (New language in the House version of the Big Bill would prevent governors from changing the forecast figures in future.)

The upshot is, the $10 million claimed as savings by the Scott administration is now part of the hole in the $17.9 million House appropriations budget gap.

The House has also not accepted any of the new spending initiatives from the governor, including a research and development tax credit, state police cameras, jobs marketing and Vermont National Guard scholarships.

And with $17.9 million of the budget puzzle to solve, budget writers are eyeing the reduction or elimination of a number of pieces that have been built into the budget including funding for the Vermont Veterans Home and the Working Lands Grant program.

“I’ll be honest with you none of the ideas are very popular,” Toll said. “Everyone loves the working lands program. It’s done great things but that’s on the table. The Vermont Veterans’ Home is fully funded with general fund dollars, over $6 million. I’m not jumping up and down to take money from vets home.”

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Anne Galloway

About Anne

Anne Galloway is the founder and editor of VTDigger.org and the executive director of the Vermont Journalism Trust. She has been a journalist for 20 years. Galloway was the editor of the Sunday Rutland Herald and Times Argus from 2006 through 2009. For many years, she was a contributing writer for Seven Days, and her reporting has appeared in The New York Times (Vows column), the New York Daily News, Vermont Life and City Pages (Minneapolis). In March 2017, she was a finalist for the Ancil Payne Award for Ethics in Journalism for her investigation into allegations of fraud at Jay Peak Resort. Galloway was also a finalist for the Investigative Reporters & Editors FOI Award in April 2017.

Email: [email protected]

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  • Adam Maxwell

    Clamoring for austerity means our working lands suffer, our veterans suffer, and worst of all the young and infirmed suffer. Taxation with smart programs and strong accountability is the answer to our woes. If we’re “tightening our belt straps” maybe that should mean owning less vehicles or not buying that flat screen TV instead of balancing the state budget on the backs of the most vulnerable?

    • Edward Letourneau

      What exactly is the state doing for vets? — I’m a vet and I don’t see the state doing anything for me.

      • Neil Johnson

        They’ll take your gun away. Kind of ironic huh?

    • Neil Johnson

      There is absolutely no waste in Vermont government, we have the absolute perfect government, there is no way to do anything better, faster or more effectively. The Vermont way of running government is really divine. To suggest that Vermont State Government isn’t perfect is blasphemy. Is this what you are trying to say?

      Shall we just burn those who object on a stake?

      We’ve got a pocket park, which consists of 3-5 park benches and grass. They are spending $120,000 for this, (down from $220,000). $45,000 is spent on permitting as it’s in a flood way /zone. Does this make any sense? There’s one idea, we’ve been fighting it for years. If this isn’t the biggest abject waste of tax payer money I don’t know what is. Citizens have offered to do it on their own dime for $5,000 or less.

      Miracles do exist, Vermont government can operate on less money.

  • Steve Baker

    Hey what’s another $18 million gap? But that’s actually not the headline because how many millions more is this year’s budget over last year’s budget and we’re still 18 million shy ?
    If we were able to have just one or two years of absolute zero growth in any state budget we would be much further along to solving our own physical problems rather than continuing to rely on more than a third of our budget from the feds.

  • Willem Post

    Reading this article leaves me with the impression the myriad aspects of almost any issue are getting very complicated at the state level.

    It is mind boggling to keep track of the various categories, and dos and don’ts, and deadlines, of money allocation.

    It seems the centralized state should turn over much more of its activities to local control, which likely would manage those matters much better and at much less cost.

    States with the highest per student expenditures were:

    – Vermont ($21,263)

    – New York ($20,428)

    – New Jersey ($20,117)

    – Alaska ($19,244)

    – Rhode Island ($18,627)

    http://www.nea.org/home/rankings-and-estimates-2014-2015.html

    • Edward Letourneau

      That means Vermont spending K through 12 is $275,000 per student. — I think they can cut property taxes by 20% for starters.

  • Ritva Burton

    If the budget gap can be closed from $72 million to $17 million fairly quickly, then the $17 million shouldn’t be that painful to find. No increase in taxes or fees sounds pretty good to me!

  • John McClaughry

    This is puzzling: “Allowing individuals who don’t qualify for subsidies to move out of the Vermont Health Connect system and apply directly for medical insurance.That saves $2.8 million.” If these individuals were not getting subsidies, how can the state save money by letting them opt out?

    • Willem Post

      John,

      I was wondering about that as well. I guess, it is better not be too, too smart.

    • Sam Young

      It came from the Vermont Health Connect report and was the Governor’s recommendation. If there is no one in the exchange who does not get subsidies then you save on the Medicaid match rate. http://legislature.vermont.gov/committee/document/2018/21/Subject/4111602

  • Tim Vincent

    The next to the smallest state in population – and declining.
    One of the highest taxed (per capita) states.
    And every year, there are ever increasing budget gaps.
    These people (legislators) give new meaning to “stupid.”

  • Neil Johnson

    Lets’ see, we have the same population for how many years? How about we adopt the oldest budget with the same population numbers? Miraculously we were able to live well that year. It was a budget passed by a predominately democratic representation…what would be the harm? We’ve had about zero wage increase.

    • Steve Baker

      Because we have grown for size and scale of government.
      We would have to compare the number of government workers at that time?
      State government is like a drug addict, money is there a drug

  • Neil Johnson

    Ethics Commission SAVES $250 million. It’s worked for all 47 states ahead of us, why don’t we adopt it? Huh?

  • John Freitag

    There is some good news here. It seems despite a far too partisan session to date, progress is being made at finding some compromise. Note how $31.8 million in savings proposals from the Scott administration have been accepted by the panel. The bottom line is that this year , Scott’s position of no new taxes and fees, which won him the election, should be respected. At the same time the majority Democratic House and Senate should be able heavily influence priorities on where funds will be spent.