Budget standoff looms at Statehouse

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(Host) Budget negotiations between Democratic Legislative leaders and Governor Jim Douglas have reached a critical stage.

Senate President Peter Shumlin says if the outline for a compromise isn’t reached by the weekend, lawmakers will forge ahead with a budget plan that Douglas will likely veto.

VPRs Bob Kinzel reports:

(Kinzel) There are basically three major issues at the heart of the negotiations; overall state spending for next year, a possible tax package to offset the most painful cuts and appropriate funding levels for the state’s Education Fund.

Legislative leaders and Governor Douglas have met several times this week in an effort to reach agreement on a broad outline of a compromise plan.

Senate President Peter Shumlin says he wants an agreement by the weekend – otherwise he says the Legislature will draft a budget that ignores many of the Governor’s concerns:

(Shumlin) "We’re at the point where I’m bound and determined to adjourn this Legislature a week from Saturday…and we need to know by tomorrow morning whether we can come to some form of an agreement or whether we’re going to have to pass a budget that the Governor will have to choose what to do with."

A top priority for the governor is a plan to reduce spending in the Education Fund. Douglas argues that this fund shouldn’t be exempt from the kinds of cuts that many other programs are facing:

(Douglas) "It’s a third of all we spend in this state about a billion and a half out of four and half billion it’s a quarter to a third of our General Fund that’s transferred over for educational purposes and frankly it’s the only major area of expenditure where the demand for services is declining in terms of the number of students continuing to be lower so I think that has to be part of the solution."

Shumlin says any final deal with the governor will probably need to include some additional budget cuts, a tax package like the one passed by the Senate that raises tobacco and liquor taxes and some adjustments to the Education Fund:

(Shumlin) "The governor was very adamant in feeling that the Education Fund needed to share in the reductions that everybody else is facing he’s also been very clear that he doesn’t feel that we’ve made sufficient cuts in the budget we feel like we’ve cut 110 million we’ve just cut another 20 and folks are feeling a lot of pain we feel that we need to use some revenue and he obviously disagrees on that so you can see where the three areas are we’re all going to have to give a little to make this thing work."

While Douglas says he strongly opposes a House plan to impose an income tax surcharge, he hasn’t expressed the same opposition to the Senate’s plan to raise tobacco and liquor taxes.

For VPR News I’m Bob Kinzel in Montpelier.

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