Members of the Vermont Legislature’s Joint Fiscal Committee heard from Gov. Phil Scott’s administration Wednesday about its efforts to contain spending in the next fiscal year.
Adam Greshin, commissioner of the Department of Finance and Management, discussed a late August letter he sent to state departments and agencies regarding next year’s budget, which takes effect in July 2024. The “main takeaway” for legislative leaders, he said, was that the administration would be seeking a 3% cap on spending increases throughout state government.
“We acknowledge right out front that this is going to be a challenge,” Greshin told lawmakers, noting that most costs have increased by 3% or more, but he added that the administration was “reverting to what has been standard practice.”
Last year, the Legislature approved a budget that increased spending by 13%. Scott vetoed it, but the Legislature overrode his veto. The state’s budgets had grown in previous years, as well, amid an influx of federal dollars related to the Covid-19 pandemic.
Addressing the fiscal committee, Greshin noted that the state’s expected revenue is down an estimated 5.5% compared to the previous year. Health care costs, inflation and unknowns caused by the state’s current flood recovery efforts will all additionally contribute to a difficult budget cycle, he wrote in his memo.
Sen. Jane Kitchel, D-Caledonia, chair of the Senate Appropriations Committee, said in Wednesday’s meeting that the Scott administration’s budget guidelines would lead to “level funding or potentially some cuts.”
The state, she suggested, would need to adapt as it relies less on federal dollars, a process she called “unwinding.”
“As the economists say, this ‘unwinding’ is new territory,” Kitchel said. But, she clarified, the administration’s August letter was merely “the first step” in a process that will stretch on for months.
Asked about his budget recommendations, Gov. Scott, at his weekly press conference, said the fiscal tightening stood in contrast to the Legislature’s large budget increase last year, which it passed without his signature.
“I continue to be concerned about Vermonters’ ability to pay and making Vermont more affordable,” the governor said Wednesday. As for what exactly a slimmer budget might entail, he wouldn’t hypothesize, saying only that “we haven’t begun our budget process.”
“We are always willing to do whatever we can to present a budget that’s feasible to Vermonters,” he said.
