Senate faces budget woes

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(Host) Vermont’s Senate Appropriations committee faces some major challenges in the next two weeks. Because the state economy is slowing down, the committee must cut at least $25 million from their budget for next year.

And the head of the committee doesn’t want to tap into special ‘rainy day funds’ to deal with the budget shortfall.

VPRs Bob Kinzel reports:

(Kinzel) Next Tuesday afternoon, the state’s Emergency Board is expected to receive the official news that the national economic slowdown has hit Vermont and that the revenue base for the fiscal year that begins in July will be roughly $25 million lower than previous estimates.

Administration Secretary Mike Smith says that while revenues from the income tax and several consumption taxes are slowing down, he’s more concerned that several business-related taxes are actually showing negative growth:

(Smith) "The other categories really are starting to concern us too I mean the insurance tax the estate tax the bank franchise tax those sort of things are starting to show some weakness that we really need to pay attention to."

The Senate Appropriations committee is finalizing its work on next year’s budget – now the committee will have to find $25 million in additional cuts. Committee chairwoman Susan Bartlett says it’s going to be a painful process because her panel’s original budget for next year was already tight:

(Bartlett) "I think it’s going to be fairly difficult… a lot of the places that a manager can go to when there’s a restriciton on money are not there".

Bartlett plans to put together a list of about 60 million dollars in cuts for members of the Senate to consider. She says she expects a lot of opposition to many of the cuts:

(Bartlett) "Right now your average Vermonter is not interested in seeing any increase in revenues I understand and appreciate that I fill up my car and I go to the grocery store and go whoa, and so I believe that it is our responsibility to lay out and this is what we’ll do with this is lay out a whole variety of choices for services that we can how we can save some money services we cannot provide for a while."

Some lawmakers want to tap into the state’s rainy day fund to cover the $25 million shortfall. Bartlett doesn’t want to do this because she thinks things might get even worse in the coming months:

(Bartlett) "And that is certainly possible that we have to do another downgrade in July and then through the fall we will know either ok things are getting better we’re ok or youch we’ve got to do some more and that’s what the rainy day funds are for."

Bartlett says she’s concerned that the debate over possible budget cuts could prolong the session unless Legislative leaders and the governor can come to a quick agreement on a plan to reduce spending.

For VPR News I’m Bob Kinzel in Montpelier.

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