Budget Address focuses on environment and health care

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(Host) Governor Jim Douglas has outlined a state budget that calls for new health care initiatives and new spending on environmental clean-up programs. The governor says that spending money in these areas will reap dividends in the future. Despite the new programs, Douglas says the new budget will stay within the growth of state revenues.

VPR’s John Dillon reports.

(Dillon) A governor’s budget address is not always a showcase for major new policy initiatives. But on Tuesday, Governor Douglas went before a joint session of the Legislature and laid out several new health care priorities for his administration.

He rejected an approach – backed by many Democrats – that would allow small businesses to cover workers through the state funded Vermont Health Access Plan, or VHAP. He says that would just make the problem worse, since Medicaid doesn’t pay for the full cost of care, and the state Medicaid Trust Fund faces a huge deficit in the years ahead.

(Douglas) “The whole problem is akin to a rusty bucket where a patch here and a patch there might hold water for another day until the bucket itself is a patchwork, leaking from every soldered joint. For health care in Vermont, it’s time to face reality: We need a new bucket.”

(Dillon) The governor’s new bucket of health care programs includes a plan to boost state payments to doctors by about one million dollars. He wants to expand a tax on insurance premiums and use the money to held reduce the cost of coverage for individuals and small groups by up to 10 percent. And he proposes to offer tax credits for companies that provide health coverage to fewer than 25 employees.

(Douglas) “The plan will be designed around a health savings account where the employer and employee can deposit a portion of savings tax free. Like a debit card, the worker then uses the money in the HSA for co-pays and deductibles. The tax credit is a hand up, not a hand out.”

(Dillon) The governor also plans to boost state spending for the Agency of Natural Resources by $4 million. Douglas said it’s the largest increase ever for the environmental agency.

(Douglas) “This new investment will address chronic shortages in the agency’s budget and will help it better perform its role as the chief steward of Vermont’s environment. I’ve laid out an ambitious strategy to address the pollution in Vermont’s waterways. My clean and clear water action plan is the most far-reaching, statewide water quality initiative Vermont has ever taken.”

(Host) The $14 million in water clean up money includes $8 million in federal funds.

But despite these new programs, the governor says the growth in the state budget will remain at sustainable levels. Administration officials say General Fund spending will grow by 2.8 percent in the next fiscal year.

For Vermont Public Radio, I’m John Dillon in Montpelier.

Read the Budget Address online.

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