MONTPELIER — Senate President Pro Tem Tim Ashe said the state Senate is moving forward on crafting a state budget that does not include any of Gov. Phil Scott’s proposed new spending unless he provides lawmakers with a different plan to pay for it.
The governor’s proposed 2018 fiscal year state budget included new spending for early and higher education as well as housing. But the new spending was covered by shifting some general fund obligations to the education fund, a move lawmakers have all but rejected.
Ashe, a Chittenden County Democrat, told reporters Tuesday at his weekly briefing that the new spending will be off the table unless the governor and lawmakers can agree on other areas to cut to cover it.
Scott has maintained his promise not to balance the state budget with new taxes or fees, making closing a projected $70 million gap a larger challenge.
“The governor proposed a budget which was not in balance, had a lot of new spending and then made assumptions about what we were going to do to school budgets,” Ashe said.
“If we don’t do the thing with the school budgets, the funding for all the new spending is now evaporated,” he added. “So the first half of the problem can be easily solved, which is to say no new programs, period, unless the governor wants to come up with the funding. So that takes care of half the problem. So now we’re down to $30 million.”
Ashe said the state may also be able to renegotiate the state’s Global Commitment agreement with the federal government.
The state found out before the 2017 legislation session began that agreement was changing. The state will no longer see federal Medicaid payments for the state’s Woodside Juvenile Rehabilitation Center and will see reduced payments for the state psychiatric facility.
“There is some hope that revisiting this with Washington might … restore the federal payments for those two things,” Ashe said. “If that happens, we’ve just made another big dent in that. So that’s why overreacting, in a way, in my opinion, is not the wise course.”
The governor’s opposition to any new revenue through taxes and fees means lawmakers must find ways to close the budget gap with cuts to existing programs and services.
“ Our committees are operating under the premise that funding new programs isn’t happening unless we somehow shake up the resources to do it, and that’s a joint effort with the governor,” Ashe said.
“The governor has said he would veto — I’m not saying hard and fast — but he has suggested he would veto any bill that raises new money,” the senator added. “So, how do we get to the finish line with that construct if we’re going to spend on new things without the money to pay for it?”
Ashe, who previously led the Senate Finance Committee, said lawmakers will look first to address the budget gap by cutting spending rather than raising additional money.
“My first instinct is always to try and make the budget work without new revenues,” he said. “If there are programs that aren’t worth the expenditures, I think we’d certainly be open to a swap.”
Rebecca Kelley, spokeswoman for Scott, said the administration remains committed to the budget proposal the governor revealed last month — including the new spending he proposed.
“The governor put forward a balanced budget that lays the groundwork for a cradle-to-career continuum of learning that makes important investments to improve our education system and address our workforce challenges,” she said.
“He has maintained that he would work with the Legislature to reach those goals, we are having those conversations and, despite the rhetoric, there is still a path to make these critical investments in early care and learning and higher education, without raising taxes and fees on Vermonters,” Kelley said.
Ashe provided reporters Tuesday with documents outlining the budget gaps in 30 other states.
“It paints a picture of the country’s financial challenges for the states that puts Vermont in that context,” he said.“… states that have both been very dramatic in cutting programs and cutting taxes, as well as states that have been viewed as more generous on public benefit programs and are viewed as more high-taxed states, universally, are facing the same kind of financial challenges that we’re facing.”
Louisiana, under former Gov. Bobby Jindal, a Republican, used a “slash and burn” policy, according to Ashe, and now faces a $600 million budget shortfall. Indiana, meanwhile, which was governed by Republican Vice President Mike Pence until earlier this year, has a $378 million shortfall.
“That is another state that has been very aggressive on the cut side,” he said.
Other northeastern states, including Rhode Island, Massachusetts and New York, which are viewed as having more generous public-assistance programs, also face substantial shortfalls, he noted.
Ashe said highlighting the budget challenges in other states points out that embracing austerity measures may not be in the best interest of Vermont.