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.”

Anne Galloway

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