Dean Recommends Cuts in Annual Budget Address

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Governor Howard Dean [Wednesday] unveiled his budget plan for next year. Dean proposed major cuts in transportation, health care and education programs.

VPR’s Bob Kinzel reports the first of two stories on the state budget.

When Governor Howard Dean entered the House Chamber to deliver his eleventh and final budget address to a joint assembly of the Legislature, the governor was greeted with a sustained standing ovation from lawmakers. But once Dean started his speech and outlined his prescription for fiscal discipline, there was virtually no applause from any members of the General Assembly.

Dean told lawmakers that the state faces tough budget decisions because revenues are roughly $50 million lower than projections.

As a result, the Governor proposed a budget that represents a 1% increase in overall state spending next year and some programs will face some critical reductions:

(Dean) “As more Vermonters struggle to find work, we too must struggle to maintain the financial discipline that will allow us to move through this recession and get people back to work. While we are sympathetic to the plight of those who will receive fewer state services, we must also do our best to help people who have lost their jobs get through these difficult times.”

Dean’s cuts primarily affect three areas of state government: education, health care and transportation.

In education, Dean wants to level-fund the student block grant under Act 60, and he proposed scaling back the income sensitive provision of the law.

The governor’s health care cuts will result in major changes to the Vermont’s Medicaid program. Those people enrolled in the Vermont Health Access Plan would be subject to larger deductibles and out of pocket expenses. The state would also eliminate its prescription drug program for recipients whose income exceeds 175% of poverty levels.

Dean says these steps are needed because the cost of the state’s drug program has grown from $40 million in 1998 to almost $100 million this year:

(Dean) “Every Vermonter deserves to have access to health care and I will continue to fight for that principle, but we cannot afford to provide all the services that we currently offer.”

Dean says he would support an increase in the state cigarette tax to help offset some of these health care costs.

In the area of transportation, Dean proposed major cuts in the state’s highway and paving programs for cities and towns. But the governor wants to maintain funding for several large controversial projects because they are financed primarily by federal funds:

(Dean) “We must also keep in mind, however, that many of the transportation projects such as the circumferential highway and the Burlington to Essex commuter rail project are also important pieces of the economic development infrastructure for our state’s largest employer and these projects must continue to be funded.”

The Governor did propose a 25% increase in funds for the Agency of Natural Resources. Dean says the money is needed to make certain that the Agency is able to enforce the state’s existing environmental laws.

The governor’s budget plan will now be reviewed by both the House and Senate Appropriations Committees.

For Vermont Public Radio I’m Bob Kinzel in Montpelier.

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