Douglas presents budget proposal

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(Host) Governor Jim Douglas has presented a budget proposal for next year that caps overall state spending at roughly 3%.

In his address on Tuesday, Douglas said the plan meets the needs of the state without increasing any taxes.

The budget includes new money to expand broadband and wireless service throughout Vermont.

VPR’s Bob Kinzel reports:

(Kinzel) Douglas described his budget proposal as an effort to put Vermont on a sustainable spending path for the future. The plan also limits future budget growth to roughly the rate of inflation:

(Douglas) “This is a practical and prudent step that will enforce the same discipline on the budget process that taxpayers must use with their own family finances.”

(Kinzel) In recent years, the state has recorded budget surpluses and the money has funded a number of one-time projects. In the future, Douglas wants all surplus money to be put into a special fund to help finance the construction of a new state hospital.

Douglas also called on lawmakers to address property tax reform this year. The centerpiece of his plan is an idea he proposed last year – a cap on local school spending. It’s an approach few lawmakers supported last session.

The governor also made it clear that he’ll actively oppose any effort to transfer property tax burdens to any other state tax:

(Douglas) “Shifting this expense to another tax would require you to increase that new education tax year after year just to keep pace with the current rate of spending increases. I understand that bending the spending curve requires difficult choices and I am open to listening to all of your ideas.”

(Kinzel) The budget plan includes $500,000 to fund a new Vermont Telecommunications Authority. Douglas wants the Authority to work with the private sector to ensure that every region of the state has access to high speed Internet service and wireless phone coverage in the next 3 years.

(Douglas) “The infrastructure that we build will form a foundation for economic growth and job creation that is second to none. This is an unprecedented opportunity for Vermont to leap for ahead of the leading telecommunications systems available today. This is no time for mediocrity. If we’re serious about making Vermont a leader in the 21st century economy we must act now.”

(Kinzel) Douglas’s budget plan received mixed reviews from key lawmakers.

Senate Appropriations chairwoman Susan Bartlett says the governor’s cap on future budgets is unrealistic:

(Bartlett) “I don’t think there’s a lot of substance to that sort of an idea. It’s sounds good to people but I’m more concerned about what we really do for spending, how much there are in special funds, again that’s totally off line and people don’t see it.”

(Kinzel) Bartlett also thinks it’s a mistake to dedicate all future surpluses to a state hospital fund because she says there are important one- time projects that need state money.

(Bartlett) “I think that’s up for debate. If we don’t meet our share of school construction than that’s rally a tax shift to local communities because they’ve got to pay the interest. So I think those are the things that we need to talk about.”

(Kinzel) Both the House and Senate Appropriations committees will begin their review of the governor’s budget plan later this month.

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

Hear Jim Douglas’ entire 2007 budget address

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