Final Reading: Statehouse leaders on board with Scott’s budget plan

Mitzi Johnson and Tim Ashe
House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe spoke to reporters after a meeting of the Joint Rules Committee about how to conduct business while the Statehouse is closed. Photo by Mike Dougherty/VTDigger

The leaders of the House and Senate on Thursday signaled support for Gov. Phil Scott’s plan to close the $200 million gap in this year’s budget.

The governor’s budget adjustment proposal, which the Scott administration unveiled earlier this week, relies on $138 million of the state’s reserve funds to cover the projected deficit in the general fund caused by the Covid-19 crisis. It also uses nearly $40 million in unspent Medicaid dollars, and about $5 million in additional revenue from alcohol sales, which surged during the pandemic. 

Speaking with Vermont Public Radio’s Jane Lindholm Thursday afternoon, Senate President Pro Tem Tim Ashe, D/P-Chittenden, and House Speaker Mitzi Johnson, D-South Hero, said the governor’s proposal made sense. 

“I think we are all on the same page about the tools that we need just to make sure that we can balance the budget for this year,” Johnson said. 

Ashe said that working with Scott on the budget adjustment “is not going to be difficult.”  

He noted that typically, using up reserve funds is not advisable. But in this case, the administration knows that the reserves will be made whole again in just a few months.

About $140 million of the general fund’s revenue gap stems from the fact that several tax deadlines were pushed until July, the start of the next fiscal year. Once those tax dollars are paid, the state will be able to replenish the reserve fund. 

Johnson said that crafting next year’s spending package will be a “much bigger problem” for the state than balancing this year’s spending. That’s because revenue losses are only expected to worsen. 

Fiscal analysts are expecting the state will take a $430 million hit across all three of its funds in the upcoming fiscal year, which is about 17% of state revenues.

After passing a budget adjustment, lawmakers are planning to construct a partial budget to fund the first three months of the next fiscal year. 

Then, they will reassemble in August — once they have a better idea of what revenues will look like in the coming months — to complete a spending package for the rest of the year.

– Xander Landen

This is an excerpt of Final Reading. For the full rundown of bills in motion at the Statehouse, the daily legislative calendar and interviews with newsmakers, sign up here for the unabridged version delivered straight to your inbox Tuesday through Friday evenings.

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Xander Landen

About Xander

Xander Landen is VTDigger's political reporter. He previously worked at the Keene Sentinel covering crime, courts and local government. Xander got his start in public radio, writing and producing stories for NPR affiliates including WBUR in Boston and WNYC in New York. While at WNYC, he contributed to an award-winning investigation of how police departments shield misconduct records from the public. He is a graduate of Tufts University and his work has also appeared in PBS NewsHour and The Christian Science Monitor.

Email: [email protected]

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