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In a vote of 141-1, the House passed a budget adjustment bill Friday to address the nearly $200 million gap in the state’s current general fund budget caused by Covid-19.
With only weeks before the fiscal year ends on July 1, House budget writers and the Scott administration worked quickly on a proposal to fill the hole in the budget without making major cuts to government spending.
By the end of June, Vermont’s general fund is expected to lose $51 million from the economic impacts of the pandemic. An additional $143 million is missing from state coffers this year because Gov. Phil Scott moved to push back April tax deadlines to July 15 — after the next fiscal year begins.
The House budget adjustment proposal replaces about $60 million using a variety of sources including more than $45 million in unused Medicaid dollars, and nearly $5 million from increased taxes from liquor sales.
It proposes borrowing the rest of the money needed to close out the year from the $1.25 billion pot of funding the state received from the federal CARES Act last month.
That money would be returned over the summer, when the roughly $143 million in tax dollars that Vermont residents and businesses still owe the state is expected to be paid.
The budget adjustment passed quickly and with little discussion during the House’s session over Zoom Friday morning.
Rep. Tom Stevens, D-Waterbury, noted that the state may be benefiting from additional sales from alcohol, but that this could come with consequences.
“I do want to point out that a liquor tax usually means that we’re drinking more and that there were potential societal problems down the line with that,” he said.
Rep. Barbara Rachelson, D-Burlington, said it was “impressive” that the House Appropriations Committee was able to craft “a fantastic package that really does minimal harm to Vermonters.”
The House’s budget adjustment also uses $10 million of the federal CARES Act dollars to refund students at the University of Vermont and the Vermont State Colleges room and board payments. And it directs $5 million of the federal dollars to the Vermont Judiciary for equipment and staffing needed for remote operations.
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