According to the budget passed last year, the Legislature would begin reining in the spending crisis with a multiyear process to align our state’s spending. It stated that the Legislature would do the following:
- Reduce reliance on one-time funding for base budget needs,
- Create an expectation that all proposed budgets and new programs would contain a multiple-year cost analysis,
- Create a budgeting system that would use less than 100% of the forecasted revenue,
- Build a reserve to offset variability in revenue generated,
- And explore a 2-year budgeting cycle that provides a funding estimate for at least one subsequent fiscal year.
The House Republican Caucus demonstrated its commitment to the above intent by introducing numerous bills that prioritize the following four goals.
Priority #1 – Put Vermont back on a sound and sustainable fiscal path
Bills introduced:
H.370: An act mandating the creation of a fiscal year reserve
H.394: An act relating to a federal fund planning report
H.424: An act establishing a joint committee on state employee compensation
H.425: An act imposing a modified hiring freeze in the state government
H.437: An act lowering the cap for income sensitivity adjustments
Priority #2 – Reduce the property tax burden by addressing unsustainable education costs and cost growth
Bills introduced:
H.44: An act enacting a moratorium on legislation increasing education property taxes
H.127: An act that simplifies the statewide education property tax by reducing the property component of the tax and adding an income-base education tax
H.380: An act that changes the structure of education governance by creating 15 Consolidated Administrative Districts
H.452: An act relating to increasing the voting requirements for school budgets that exceed the cap on education spending
Priority #3 – Provide access to quality healthcare that all Vermonters can afford
Bills introduced:
H.78: An act relating to making health insurance plans available outside the state exchange and to purchasing health insurance across state lines
H.188: An act relating to transitioning to federally funded exchange
H.179: An act relating to the rates and location of healthcare practitioners and establishing a health insurance market outside the state exchange
H.180: An act relating to offering health insurance plans to supplement Green Mountain Care
H.181: An act relating to limiting the role of Medicare in certain health care reform initiatives
H.446: An act relating to combining health insurance risk pools with that of other states
To ensure all Vermonters have access to affordable healthcare, we pushed for oversight of Vermont Health Connect and recommended that it should be abandoned if the necessary repairs could not be completed in a timely manner and at a reasonable cost.
Priority #4 – Promote economic development and job growth while retaining existing businesses
Bills introduced:
H.146: An act relating to exempting software as a service from Vermont sales tax
H.218: An act relating to creating an angel investor tax credit
H.83: An act relating to economic development and marketing Vermont: Innovative by Nature
It is disappointing that all these detailed proposals remained tacked to the wall in each jurisdictional committee because of resistance from the majority – a majority that appears unwilling to rein in spending. Instead of cutting state expenses by $21 million in order to align with the current revenue stream, and thus balancing the budget without the need for new taxes, our appropriations committee chose to raise over $47.5 million in new or increases taxes to continue the overspending crisis. The budget is another step in the wrong direction. Raising taxes on Vermonters is not the only path ahead.
The House Republican Caucus remains committed to fixing this crisis and recommends that the Legislature should adopt the following cost-cutting measures regarding 2017 budget appropriations:
- Limit expenses in FY 2017 to 100% of the projected revenue and not raise or add new taxes
- Refrain from creating new programs or expanding existing ones (Savings: $6-8 million)
- No new state jobs to be created in this budget and require that a reclassification proposal be included in the next budget submission
- Eliminate vacancy positions and Secretary of Administration should approve all new state jobs
- Plan to limit spending in FY 2018 to 99.8% of projected revenue
- Use capitol money instead of the general fund to improve overall security (Savings: $4-5 million)
- Cost of Living Adjustments (COLA) will have to be accommodated with current resources (Savings: $4 million)
- Postpone increase general fund transfer to Joint Transportation Oversight Committee (JTOC) (Savings: $2.5 million)
- Require Secretary of Administration to reduce state funded grants to achieve $7 million in state savings (Every agency is to rank in order of importance to agency mission, outcomes, and community need; prioritize all grants and notify the bottom 20% that grants are in jeopardy of obtaining funds)
- No new Treasurer’s authority and consider reductions where authority is not used to lend out state cash flow dollars for pensions and renewable energy projects
- Privatization review: Require that government restructuring and operations review commission established under C.107 in the FY2017 budget identify at least two areas of government for solicitation of private sector bids as an alternative to state service provision, and require the Administration to review these bids against the state cost of continuing to provide these services
- Dual eligibility for Medicare and Medicaid recipients
- Governor’s proposal: Involuntary medication proposal for mental health crisis ($5 million gross and $2.25 million in general fund savings)
Based on the current revenue projections, there will likely be a need for a recision this fiscal year, followed by a significant budget adjustment in January 2017. Vermont has a structural budget problem that cannot be resolved by simply levying large amounts of new taxes every year.
To preserve a much brighter financial future for Vermont, we must work together to start bending the curve on spending. Vermonters deserve better!
