(Host) Governor Jim Douglas has proposed a budget for next year that he says will eliminate the state’s looming deficit.
The proposal affects many Human Service programs and property tax subsidies, and it assumes the legislature will reform the state pension system.
VPR’s Bob Kinzel reports.
(Kinzel) At a briefing with reporters just before the governor delivered his budget address, Finance Commissioner James Reardon summed up the difficult options facing the Administration:
(Reardon) "What you’re presented with today here is the best of the worst choices."
(Kinzel) Douglas told lawmakers that finding ways to close a projected $150 million budget gap is the toughest challenge he’s had in the past 8 years:
(Douglas) "The magnitude of our shortfall demands new approaches and creative thinking. It calls for difficult reductions in worthy programs and a dedicated focus on the most pressing needs of our people. But our purpose is not simply to patch together a budget for next year. Rather our aim is to set our state on solid ground for the next generation."
(Kinzel) The Governor says Vermont is facing a budget crisis because revenues have fallen $100 million over the past two years and because the state will receive $75 million less in federal stimulus funds next year.
The budget plan reduces payments to many human service providers, it increases premiums and deductibles for Catamount Health Care and places new limits on benefits.
The proposal also reduces subsidies for property taxpayers with household incomes between $60,000 and $90,000 and it gradually transfers responsibility for the teachers’ retirement program from the General Fund to the Education Fund:
(Douglas) "I understand that these changes will generate considerable debate. But I’ve seen the alternatives and they are much worse – these decisions are responsible without being draconian."
(Kinzel) Administration Secretary Neale Lunderville says the governor considered totally eliminating several programs including Catamount Health Care. But Lunderville says Douglas decided that it’s better to keep these programs and scale back their benefits:
(Lunderville) "One thing we did not do that we’ve done in previous times is eliminate particular services altogether. Instead, as we’ve found, there’s another way to curb these costs and that is to limit the levels of service within these benefits."
(Kinzel) Despite proposing many cuts, Douglas did recommend more spending on higher education. He wants UVM, the State Colleges and VSAC to share an additional $5.5 million next year.
He also proposed rolling back recent changes to the state’s capital gains and estate taxes – that’s a recommendation that will cost the state treasury roughly $10 million a year.
The governor’s budget plan will now be reviewed by the House and Senate Appropriations committees.
For VPR News, I’m Bob Kinzel in Montpelier.