Lawmakers approve budget rescission plans

MONTPELIER — The Legislature’s Joint Fiscal Committee has unanimously backed a plan presented by the Scott administration to reduce General Fund spending in the 2018 fiscal year budget by $12.6 million.

The panel of House and Senate members met Thursday to review the plan, which was necessitated by a revenue downgrade issued last month.

Economists for Gov. Phil Scott and the Legislature downgraded expected state revenues for the current fiscal year by $28.8 million, including $16.3 million in pending corporate tax refunds carried over from the 2017 fiscal year.

The state’s Emergency Board last month approved a plan to pay for the refunds.

The state’s Transportation Fund was also downgraded by $3.5 million.

Under state law, the administration is required to submit its rescission plan for both the General Fund and Transportation Fund and seek approval from the Joint Fiscal Committee Commit because the revenue downgrades for each fund exceeded 1 percent of the total state budget. The committee voted to approve plans for both funds Thursday.

Adam Greshin, Scott’s finance commissioner, told the committee Thursday that revisions to the state’s Medicaid program forecast will save $4.5 million.

The revised forecast came after state officials reviewed data earlier this month.

“The end result … was a revision in the forecast for overall medicaid spending, down $25 million,” he said. “That’s the good news. The perhaps slightly less good news … is that a fair amount of that was federal dollars.”

Of the $25 million in Medicaid savings, just $4.5 million is state funding. Greshin said “a healthy economy and stronger growth” has resulted in a smaller Medicaid caseload.

Greshin said he believes the revised forecast will pan out over the 2018 fiscal year.

“I think we can be reasonably precise. There’s always a chance, as there is with any kind of forecasting, that you get it wrong,” he said. “I’m reasonably confident in our forecast.”

The revised forecast will not reduce access or benefits to any Vermonters.

“This is not a change in anything that we do in Medicaid and anything that we offer in Medicaid,” Greshin said.

The Department of Vermont Health Access also anticipates saving $1.6 million by changing the way it reimburses providers within Medicaid.

Greshin said a change in the Medicaid payment system to providers for outpatient services, made in 2015 to align it with Medicare, did not work out. The change resulted in higher-thanexpected payments.

“A bunch of smart people got together and decided this isn’t working,” he said.

The result will be a reduction in payments to providers, but some of the savings will be reinvested in the state’s health care system, Greshin said.

Human Services Secretary Al Gobeille said the reduction in the Medicaid caseload means more people will be receiving state premium subsidies on the online health insurance exchange, however.

The administration’s rescission plan also counts on an additional $3.5 million in new revenue from the Department of Financial Regulation, and another $275,000 in revenue from the secretary of state’s office.

Greshin said the new revenue from DFR will come from the fees that insurance agents and financial brokers pay to conduct business in Vermont.

“We believe that in a steady … economic environment that should be good for $3.5 million,” he said.

The Department of Public Safety will contribute $860,000 to help balance the budget. The plan calls for a $433,000 base cut that will continue in future years and using $426,830 in special fund balances for the 2018 fiscal year.

Greshin said the administration is using about $1.2 million in one-time money to help balance the budget following the revenue downgrade.

Transportation Secretary Joe Flynn said the administration will balance the Transportation Fund, in part, by transferring $1.1 million from the Central Garage Fund that pays for equipment replacements. That means the agency will replace 23 fewer vehicles in 2018, including 15 pickups.

“This is clearly something that we would not like to continue for a second or third year in a row,” Flynn said.

The administration expects to save another $1.4 million on diesel fuel costs. The agency’s Aviation Division will see a $300,000 reduction in its $17.7 million budget. Another $457,000 in savings will come from reductions in discretionary spending such as travel and job vacancies.

neal.goswami@timesargus.com

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