Editor’s note: This commentary is by Rep. Carl Demrow, of Corinth, a freshman state representative for the Orange-1 district who serves on the Institutions and Corrections Committee.
[A]fter the tumult of the past legislative session, a newsworthy event occurred that got little press coverage. Last week, Gov. Phil Scott signed the FY 2020 state budget. During the speeches that accompanied the ceremony, I pondered this year’s process. Passing a budget is one of the most basic and important functions of government. It is important because the $6 billion state budget is a pure reflection of policy: It decides where the money will go. And this year’s budget process went about as smoothly as can be expected with the Legislature and the executive branch controlled by different parties.
Passing a state budget is a process that starts 10 months earlier when the governor asks the various department heads what they expect to need to run their departments in the fiscal year that starts on July 1. The department heads get their want-and-need lists to their bosses and those lists get trimmed and revised as they make their way to the governor, who then, with his staff, compiles a draft budget that is presented to the General Assembly in a joint session in late January. From there, the House Appropriations Committee begins poring over the governor’s budget, taking testimony, holding public hearings, and debating just what the governor wants to spend money on. The committee changes the governor’s draft as it sees fit, and then sends it to the House floor for a vote.
Once it passes the House the whole process starts all over again in the Senate. Once it has passed the Senate, the differences between the versions the two bodies have passed are worked out in a conference committee. All of these meetings are open to the public. And once the conference committee’s work is done, each chamber votes up or down again and, if approved, it goes on to the governor for a signature, a veto, or to be passed into law without his signature. It is a deliberative process, one that is open for input at every step of the way.
Unlike with the federal budget, the state budget has to be balanced because we can’t print money. And the state must carefully guard its bond rating, which is key to Vermont’s ability to borrow money for large state projects like office buildings and facilities. The state has billions in underfunded pension liabilities from undercontributing to the state pension coffers in the ’90s and early 2000s. These liabilities exert enormous pressure on the budget are the proverbial elephant in the room in any discussion about increasing state spending. These underfunded liabilities will require an extra $150 million or more each year from now until 2039.
This year, the committees did their work with the governor’s draft and, with a low rate of increase in state spending, were able to find a dedicated source of revenue for clean water funding, money to pay down pension liabilities and to test schools for lead, funding for expanding broadband access and money for weatherization, more support for child care and for our parent/child centers and an increase in the Medicaid reimbursement rate for residential care facilities just to name a few.
At the signing ceremony, the governor praised the appropriations committees of both the House and Senate, and their chairs, Rep. Kitty Toll and Sen. Jane Kitchel, along with Treasurer Beth Pearce for her watchful eye on the state’s fiscal health. In the end, FY 2020 budget has a lot to like, and there is plenty to be unhappy about, too: spending wasn’t increased enough, taxes weren’t cut. There’s the old saying that a good budget has something for everyone to hate. We are a small state of just 626,000. Finding an economy of scale in anything in a state as small as Vermont is difficult at best, but our size is also an advantage: Fewer of us means there are more opportunities for us all to talk. For all the focus these days on our dysfunctional federal government, what I saw of the budget process this past legislative session was fully functional, and something we can all take pride in. Vermont has many challenges, but working on a bipartisan basis to pass a budget is not one of them. At least not in 2019.
