Some Lawmakers, Policy Analysts Want To Tap Rainy Day Funds

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(Host) Governor Jim Douglas will deliver his final budget address to the Legislature tomorrow afternoon. He’s expected to propose large cuts in human service programs.

All the talk of budget cuts has prompted some lawmakers and policy advocates to say they’d rather tap into the state’s rainy day funds instead.

VPR’s Bob Kinzel reports.

(Kinzel) Vermont has 4 rainy day funds; for the General Fund, the Transportation Fund, the Education Fund and a Human Service caseload fund.   The four accounts have a combined balance of almost $120 million.

Jack Hoffman is a senior analyst at the Public Assets Institute – a progressive policy think tank located in Montpelier.

He says this year’s budget crunch is exactly the reason why the rainy day funds were created:

(Hoffman) "I would say it makes more sense to use money now to avoid those painful cuts, if possible. You know, if there’s still a problem a year from now then you can look to deal with that problem."

(Kinzel) Legislative leaders and the governor are jointly supporting a plan to streamline state government services to save as much as $38 million a year.  Hoffman thinks it will take some time to fully implement these changes:

(Hoffman) "I don’t know that that can be done as quickly as they’re hoping, so you could use the Rainy Day Funds now and then that buys you a year to actually put these new efficiency plans in place. And then you realize your $38 million in savings the following year."

(Kinzel) The Douglas Administration strongly opposes efforts to tap into the rainy day funds.  Administration Secretary Neale Lunderville:

(Lunderville) "There’s no doubt that it’s raining, but the question is how long will the rain last? If you look at the models that the Legislature itself has put out, it’ll show that we’re going to have a deficit not just in fiscal ’11 but the year after that as well. So if we use Rainy Day Funds now and don’t make the spending reductions to make budgets sustainable we are going to further the problem in future years. It’s not a reasonable approach."

(Kinzel) Lunderville says difficult cuts must be made and he says the governor’s budget proposal will also look for new ways to allocate specific costs within the General Fund and the Education Fund:

(Lunderville) "The General Fund supports Education to a large degree through the transfer – through supporting teachers’ retirement among other things. And the governor will look at the relationship between the General Fund and the Education Fund so that the challenges that we face are shared between the two funds.

(Kinzel) Lunderville says the governor’s budget plan will also ask lawmakers to re-evaluate the kinds of services that the state provides for its citizens.

For VPR News, I’m Bob Kinzel in Montpelier.

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