The Vermont House on Thursday gave preliminary approval to a $7.15 billion budget bill that will fund state government for the last nine months of the fiscal year, and spends the remaining $223 million in federal funding the state received this spring to respond to Covid-19.
The spending bill includes funding for the state colleges to weather a budget deficit this year, a program to provide Covid-19 stimulus checks to immigrants in the state, and more than $30 million to help schools cover the costs of reopening during the pandemic.
House lawmakers advanced the budget bill, H.969, in a virtual vote of 140-4. The measure is expected to pass on a second vote and move over to the Senate on Friday.
In crafting the state budget, lawmakers and Gov. Phil Scott had to contend with a $180 million budget hole caused by the Covid-19 crisis.
But thanks to several factors, including an unexpected windfall of revenue that came in ahead of this year’s tax filing deadline in July, they were able to put together a spending package that avoided making major cuts to government programs and services.
Rep. Kitty Toll, D-Danville, chair of the House Appropriations Committee, called the proposed budget a “steady ship in a storm.”
“We are in very turbulent times. We’re living in a time of uncertainty. And so we’re putting a budget forth that’s really a steady state: we’re not making reductions, we’re not cutting services, it’s to keep the ship floating ahead,” Toll said in an interview this week.
The budget encompasses the spending lawmakers approved earlier this year to fund the first three months of fiscal year 2021, plus the spending for the remainder of the year.
The state budget benefits from $850 million in federal dollars from the coronavirus relief fund — money that states were provided this spring to respond to the pandemic.
Most of this money was previously allocated in June.
The House’s budget proposal would create a $5 million fund to provide Covid-19 stimulus checks to Vermonters who didn’t receive federal payments earlier this year because of their immigration status.
This includes about 3,000 undocumented immigrants. Scott initially proposed this program, and recommended using $2 million to fund it.
The budget includes $23.8 million in additional funding for the Vermont State Colleges System, which said it needs the extra money this year to weather a budget deficit.
This spring, legislative leaders pledged to provide the VSC this so-called “bridge funding” that would stabilize the system as it mulls restructuring options.
Scott didn’t directly include the state colleges funding in his budget proposal, and his administration has said that it wants to see a plan for how the colleges will achieve long-term sustainability before it commits more state funds.
Sophie Zdatny, the chancellor of the Vermont State Colleges System, praised the additional funding in a statement on Thursday.
“This bridge funding provides us with an opportunity to make the system better, stronger and more unified, while maintaining high quality and expanding access,” Zdatny said.
The budget also provides $10 million in additional federal funding for the University of Vermont and $10 million for the state’s independent colleges and universities to spend on Covid-19 related expenses.
Combined with the spending the lawmakers and the governor authorized earlier this summer, House Speaker Mitzi Johnson, D-South Hero, said this year’s budget represents the state’s “largest single-year investment in higher education in modern history.”
If the House bill is signed into law, the state colleges would see a total of $98.4 million this year and the University of Vermont would receive $80.5 million.
The House’s budget proposal cuts the amount of coronavirus relief fund dollars the governor had proposed spending on wide-ranging economic relief from $133 million to $100 million.
But it would spend $88 million on additional grants for businesses strained by the pandemic.
It also includes $5 million to help ski areas make public health modifications needed to stay open this winter and $3 million for the state colleges to offer a workforce training program for Vermonters whose livelihoods have been impacted by the pandemic.
The House’s budget would close down the Woodside Juvenile Rehabilitation Center in Essex — the state’s only juvenile detention center — in October.
In recent weeks, the Scott administration has moved to shut down the facility.
In the short term, the state plans on placing justice-involved youth in privately run residential treatment programs in Vermont and, if needed, in New Hampshire’s Youth Development Center.
In the long term, the Scott administration hopes to replace Woodside with a facility run and owned by a private organization. The governor has sought to close down the facility since late last year.
A handful of House Progressives voted against the budget because it wouldn’t raise additional revenue.
Rep. Selene Colburn, P-Burlington, said that the House should have raised additional taxes on wealthy residents, who benefited from federal tax cuts in recent years.
“This could be helping us to do much more than simply maintain the status quo in this budget,” Colburn said.
“I think we need an overall budgeting vision at this point that allows us to address the really deep inequities that are actually embedded in that status quo.”
While lawmakers noted that Scott’s budget made few cuts to programs and services, they ended up restoring some spending reductions proposed by the administration.
Scott proposed cutting state funding for Outright Vermont, a nonprofit organization that provides services for LGBTQ youth in Vermont’s schools, from $60,000 to $20,000.
The House reversed this decision.
The House also reversed a proposal to cut funding for the Vermont Criminal Justice Training Council, which trains police throughout the state, by about $42,000. Legislators said they didn’t want to reduce funding at a time when communities are asking for more thorough police training.
While lawmakers were able to avoid taking draconian actions this year, fiscal analysts have pointed out that next year, the prospects for the state’s finances could be much grimmer.
Fiscal year 2022 is expected to be an even tougher year for state spending: Vermont is projected to lose just over $100 million in tax revenue without a surplus to soften the blow.
“Once our fiscal landscape is clear, there’s going to be some tough choices of how we move forward, depending on the impact the pandemic has on our state,” Toll said.
