Gubernatorial Candidates Speak Out on State Budget

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(Host) The disagreement between Governor Howard Dean and Senate Democratic leaders over a proposed budget for next year has spilled over into the gubernatorial race for 2002.

VPR’s Bob Kinzel reports.

(Kinzel) Vermont voters are getting a preview of one the key issues in this year’s gubernatorial race: the fiscal stability of the state.

On Wednesday afternoon, Governor Howard Dean lambasted Democratic leaders in the Senate for passing a budget that Dean says is bloated and out of balance. Dean said he would veto this bill if it ever reached his desk. On Thursday, both the Democratic and the Republican candidates for governor said that Dean is essentially right, but Lieutenant Governor Doug Racine and State Treasurer Jim Douglas strongly disagree on the size and scope of cuts to be made to the state’s Medicaid program.

When the House passed its budget last month, it imposed new co-payments and higher deductibles for the state’s pharmaceutical assistance programs. In one program, elderly Vermonters with incomes between $15,000 and $21,000 would face a deductible of $1,000. The Senate restored many of these cuts by raising the cigarette tax by 67 cents; the House voted to increase this tax by only 36 cents.

While Racine favors higher co-payments for the Medicaid program, he says the rest of House plan is unacceptable:

(Racine) "I think those cuts would be painful. Trying to find two to three million dollars, as I’ve proposed here, is not going to be easy. Some of those cuts are going to be very difficult for people. But to go beyond that, to maintain a balanced budget and a sustainable budget and deal with the ’04 problems, have 50 cents or 45 cents on the cigarette tax would cause more pain than I would be willing to accept. And I would urge the governor not to sign that budget either."

(Kinzel) But Douglas says the larger House cuts are needed to bring spending in the Medicaid program under control:

(Douglas) "The Joint Fiscal Committee reports that we’re going to have a serious shortfall in our Medicaid program over the next few years, ranging up into hundreds of millions of dollars. So we can’t just sit idly by and tinker in a small way with the system. We have to restructure it fundamentally. So I think the House did a good job in proposing a restructuring of Medicaid and it will get us on a more sustainable spending track for the future."

(Kinzel) A House-Senate conference committee will now meet in an effort to work on a compromise budget plan for next year.

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

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