MONTPELIER — House Speaker Mitzi Johnson and the chairwoman of the House Appropriations Committee say they have found ways to reduce the state’s projected budget from $72 million to about $18 million, but many tough decisions must still be made to bring the 2018 fiscal year budget into balance.
Johnson, D-South Hero, and Rep. Kitty Toll, D-Danville, briefed reporters on the status of their budget work Friday as lawmakers prepared for the annual week-long Town Meeting Day break. Republican Gov. Phil Scott’s proposed budget called for increased spending in early and higher education. It called for funding the increase by moving some general fund obligations to the education fund, level-funding local school district budgets and requiring teachers to pay at least 20 percent of their health care premiums.
But the governor’s education proposals were rejected almost immediately by the Democratic-led Legislature. Toll said her committee has been “really slugging it out” during the first two months of the legislative session and has essentially shelved the governor’s entire budget proposal and is working off of the current budget to craft the 2018 fiscal year spending plan.
“We started out with the governor’s proposed budget knowing that the major proposal in the budget was not accepted by Senate Education and there was a vote on the [House] floor not to accept pushing town meetings out, which kind of made the rest of the proposal fall apart,” she said. “The timing had serious flaws.”
Toll said the governor’s budget plan is really a restructuring of the state’s education system and requires more work by policy committees before it can be considered by Appropriations.
“The proposal in the budget needed to be vetted through a committee process and it was kind of dumped in Appropriations as a budget proposal. But to make a structural change in education really needed to go to the Education Committee,” Toll said. “I felt, and our committee decided as a group, to remove the education proposal because it just was not ready for prime time.”
Working from the current budget, Toll said her committee has found ways to significantly reduce the projected budget gap.
“We took our $72 million gap and through some things that we accepted and didn’t accept, we ended up working off about a $52 million gap. In the past few weeks, we’ve accepted some of the governor’s proposals and today we are at a gap of $17.9 million between expected revenues and anticipated expenses for state government,” Toll said.
A big piece of the budget gap will be filled with an $18 million expected increase in federal funding for the Children’s Health Insurance Program. The committee has also accepted the governor’s proposal to allow some Vermont Health Connect consumers to purchase their health insurance directly through insurers, saving about $2.8 million. The governor’s plan to save $4.5 million through various efficiencies and position reductions has also been expected.
Meanwhile, the Appropriations Committee is also planning to use about $6.75 million from the state’s $86 million Medicaid Global Commitment Fund to help balance the budget.
None of the governor’s new spending is currently part of the House budget plan and will not be considered unless there is a compelling reason to cut elsewhere in the budget, according to Toll. That means the governor’s proposed new spending on early and higher education are off the table.
“All those nice initiatives that we would love to do and Vermonters really want are not in this budget and if they were they would come at the expense of other items in the education budget, mostly being the K-12 system. That was not a decision to be made in our committee,” Toll said.
Toll said she has not yet been advised by Johnson to consider new revenue, and the governor has promised to veto any increases in taxes and fees.
“We’re really trying to see how far the Appropriations Committee can get. We haven’t ruled anything out,” Johnson said.
Finding a way to erase the remaining $18 million gap will be even harder, Johnson and Toll acknowledged. The only options left are existing general fund expenditures.
“I’ll be honest with you, none of them are very popular,” Toll said. “The Vermonter Veterans Home is fully-funded on our part with general funds. That’s $6 million. I’m not jumping up and down to take money away from the Veterans Home.”
Toll said the committee has not identified any areas to cut yet, but has worked to highlight all general fund expenditures so the committee can consider what may need to be chopped. She called on the administration to bring new ideas to the table.
“We are hopeful that when we come back from Town Meeting break that the administration will have proposals and some ideas how to fill in this last piece of the gap,” Toll said.
Johnson also called on the administration to pitch in, saying they have yet to offer up any proposals since Scott’s initial proposal was rejected.
“Closing a gap of this size without that kind of partnership with the corner office is really difficult and the Appropriations Committee is working incredibly hard,” Johnson said. “I have a weekly meeting with the governor but there are not new additional ideas yet and hopefully everyone can take a breath over Town Meeting and can come back from Town Meeting break with a few more proposals.”