[G]ov. Phil Scott’s administration is asking agency and department heads for level-funded budgets for the next fiscal year — and that’s before any cuts in the federal funding that makes up more than 40 percent of spending by the state.
Funding requests for fiscal 2019 — which starts next July 1 — should be flat and “filtered through the prism of the governor’s strategic priorities: economic growth, affordability, and help for the most vulnerable,” said the Sept. 21 memo from Finance and Management Commissioner Adam Greshin.
Greshin said in an interview Friday that the request for level budgets — which often means belt-tightening, due to inflation, caseload growth and pay increases for state workers — comes before any possible federal budget cuts are factored into the equation. More than 40 percent of Vermont’s annual overall budget of about $5.8 billion comes from Washington, Greshin said.
Meanwhile, the U.S. House in July passed a budget resolution calling for $200 billion in cuts in the federal budget. House and Senate tax-writing committees are expected to draft by November tax reform plans that could mean up to $1.5 trillion in lost revenue.
Greshin urged against alarm on Friday. “Until we see something come out with the signature of Congress and the president, we’re going to try to keep our worrying down,” he said.
He added, though, that with the state’s reliance on federal funds, “of course we’re worrying.” Federal dollars flow through the Agency of Human Services and are “used to take care of some of our most needy constituents,” Greshin said, adding that highway maintenance and a host of other state programs use federal money.
But with uncertainty about the depth and breadth of federal cuts, the state can’t factor them in yet, he said.
In his memo to agency and department heads, Greshin told them to “assume federal funding remains status quo. We will work with affected departments to develop contingency plans, but without getting guidance from Washington, let’s proceed with what we know as opposed to what might be.”
Greshin left a bit of wiggle room for department heads who want to plead for more money. “We recognize that these statewide pressures constitute a challenge for some departments and we are prepared to discuss the issue during your budget meetings.” He asked departments to include the impact of state employee pay increases “and other statewide pressures as part of your budget presentation materials.”
Greshin also included this in his memo: “Level funding does not mean no new programs or initiatives. Please be innovative and bold while living within the confines of existing resources.”
Initial budget requests are due at the Agency of Administration Oct. 16, Greshin’s memo said.
