Legislation that increases state spending by roughly 5 percent was approved by the House last night. The bill sets up a major disagreement with Governor Peter Shumlin over the funding of child care programs.
According to House Appropriations chair Martha Heath, this is the seventh year in a row that her panel has faced financial challenges as it worked to put together the state budget for the next fiscal year
And unlike some previous years, there’s no special federal stimulus money available to help pay for state programs.
"While the nation is easing its way out of the Great Recession, revenues for the state have just returned to 2008 levels," said Heath. "Finding the right balance between maintaining necessary services while making investments for the future was the challenge my committee faced."
Heath says the budget plan also allocates $9 million to a special reserve fund to help the state deal with the current federal sequestration budget process.
"Putting money aside makes sense both for addressing those potential needs and for keeping the state on a more financially sustainable path."
Heath says the proposed budget makes some important financial investments including; more money for higher education, additional funds for low income heating programs and higher Medicaid reimbursement rates for health care providers.
Governor Peter Shumlin proposed increasing spending on child care programs by $17 million next year. He paid for the increase by taking money from a tax credit program for low income working people.
Heath said that funding source wasn’t acceptable to House leaders and her panel scaled back the child care increase to just over $3 million.
"In working through this seemingly insurmountable challenge your Appropriations committee has worked hard to find the right balance between fiscal responsibility and making investments for the future."
The Governor says he thinks the committee has done a pretty good job including a plan to place time limits on participants in the Reach Up program but he wants the Senate to restore the child care funds and he’s committed to his plan to take money from the Earned Income Tax Credit program to pay for it.
"It’s extraordinary to me that we’re not making these investments," said Shumlin. "And to do that we need to make some choices with the existing dollars we’re spending. I think we’ve made the right choice and I think in the end the Legislature will concur and agree."
The budget bill is scheduled to come up for final approval in the House on Friday.