A panel of lawmakers approved a plan Thursday to reduce the current year’s state budget by $12.6 million.
The rescission came in the wake of a revenue downgrade in July.
After hearing the Scott administration’s proposal and a few hours of discussion, the Joint Fiscal Committee passed the general fund rescission plan without controversy or fanfare on a unanimous vote.
The panel also approved a $3.5 million rescission for the transportation budget.
Nobody spoke about either proposal during an opportunity for public comment Thursday afternoon.
Commissioner of Finance and Management Adam Greshin said the administration attempted to find reductions while making the smallest impact possible.
“We created the smallest footprint we could,” Greshin said.
The proposal was generally well received by lawmakers.
Rep. Janet Ancel, D-Calais, chair of the committee, said she thought “a thoughtful way to move forward.”
“It’s always hard to make rescissions,” she said. However, she noted, the proposal does not reduce any state worker positions or cut state programs. Though the plan uses some money that will only be available one time, most of elements of the proposal will be ongoing in future years, she said.
Ancel said she was pleased the state resolved the revenue downgrade shortfall before there are any changes to the budget at the federal level.
About a third of the state’s budget comes from federal sources. In anticipation of potential federal budget cuts, legislative leaders tentatively scheduled a special session for mid-October.
“It’s really important for us to deal with this question before we get whatever the federal budget is,” Ancel said.
Greshin said the state has had some preliminary conversations about planning for budget changes from Washington, but nothing formal. He noted that the state’s reserves are fully funded.
“Like most states, we anxiously watch to see what will happen,” Greshin said.
Lawmakers asked questions about various aspects of administration’s plan, including the largest portion — a $4.5 million reduction to the state’s appropriation for the Medicaid program.
The cut reflects a new projection, drawn up by representatives of the administration and Legislature, estimating that the number of Vermonters enrolled in Medicaid will decline this year. The program is funded in part by the state and in part by the federal government.
In total, the declining Medicaid enrollment is expected to save $25 million, but the majority of that is federal money. The state’s share amounts to $4.5 million.
Secretary of Human Services Al Gobeille said that the projection will not put a cap on the number of people who can enroll in Medicaid in Vermont. If more people enroll than expected, the federal government will provide its share of the funds and the state will be responsible for coming up with the match, he said.
“It doesn’t limit our spending,” he said.
Rep. Bill Lippert, D-Hinesburg, a member of the committee who also chairs the House Health Care Committee, said that he understood the cut would not affect the services offered by Medicaid.
“This is not a change in access or a change in eligibility or a change in benefits,” Lippert said.
Greshin confirmed: “this is not a change in anything that we do in Medicaid, and anything that we offer in Medicaid.”
An additional $1.6 million will come from a change in billing related to outpatient services.
The proposal also draws on $3.5 million in revenue that came in higher than expected to the Department of Financial Regulation. According to Greshin, the excess revenue is primarily from insurance applications and registration fees for brokers and dealers.
The administration also took questions from lawmakers about other proposals in the rescission, including a $860,330 reduction to Department of Public Safety spending.
DPS will save about half of that amount because the department can bring in additional federal funds and from administrative savings. The remainder came from sweeping excess funds.
Sen. Dick Sears, D-Bennington, who has overseen the public safety budget for years, said that he had some questions about how the department, which tends to have a tight budget, came to have spare money.
The administration said the funding change won’t adversely impact the department’s work, he said, but “I’m waiting for the 2019 budget to see what their proposals are.”
The plan involves about $1.2 million of funds that are only available one time — meaning that budget writers must find an alternative source of money to fill the gaps in the next fiscal year.
That includes $318,634 from the judiciary, as well as contributions from the Public Utilities Commission, the Department of Buildings and General Services and others.