(Host) The budget battle between the Douglas Administration and Democratic leaders at the Statehouse has expanded beyond next year’s proposed spending plan.
The Administration argues that the approach taken by lawmakers will lead the state into massive deficits in 2011 and 2012.
But the Democrats say the Governor’s plan unfairly shifts tens of millions of dollars from the General Fund to the Education Fund.
VPRs Bob Kinzel reports.
(Kinzel) Administration Secretary Neale Lunderville says the Governor is taking a firm stand on the budget debate because he’s concerned that the spending plan adopted by lawmakers will send the state into fiscal chaos over the next few years.
Lunderville says that’s why Douglas is calling for more budget cuts and fewer tax increases. At a recent briefing, Lunderville said the Democrats’ budget would put the state on a path to a record $67 million deficit in 2011 and a $141 million deficit in 2012.
(Kinzel) Lunderville says the governor’s plan takes a very different approach:
(Lunderville) "It’s a responsible and balanced approach that looks at the budget year ahead but also the years ahead of that and make sure that we’re taking the necessary steps now to make reforms and address problems head on, so they don’t grow and multiply in future years."
(Kinzel) House Appropriations chairwoman Martha Heath says the Governor is using a huge gimmick to balance his budget. That gimmick is transferring responsibility for the Teacher’s Retirement program from the General Fund to the Education Fund. It’s a move that Heath says will result in higher property taxes:
(Heath) "The only reason that the Governor’s budget is balanced for FY ’11 is that he has shifted $59 million of General Fund responsibility – i.e. teacher retirement – to the Education Fund. He’s taken it off the General Fund account so he hasn’t really saved that money he just asked the responsibility to be shouldered elsewhere, which we don’t agree with."
(Kinzel) That transfer was raised as a key concern by a number of people at a public hearing that Legislative leaders held on Douglas’s budget proposal. Bernie O’Rourke is a school board commissioner in Burlington:
(O’Rourke) "The concern I have is if you transfer the retirement fund it will have an impact on the property tax and I’m concerned that our budgets will not be passed…what I’m afraid of is that this will drive good budgets down."
(Kinzel) Lawmakers are scheduled to return to the Statehouse for a special budget session on June 2nd.
If Democrats are able to override the Governor’s budget veto, it could be a relatively short session, but if the veto is sustained, it’s not clear how long it will take for lawmakers and the Governor to reach agreement on a new budget for next year.
They need to reach a compromise by the end of June because the state’s new fiscal year begins on July 1st.
For VPR News I’m Bob Kinzel in Montpelier.