Spaulding warns of consequences on budget stalemate

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(Host) State Treasurer Jeb Spaulding says Vermont will face some serious consequences if lawmakers and Governor Jim Douglas don’t agree on a state budget by the end of the month.

Spaulding says there will be no money available to pay state employees or to support most operations of state government.

Douglas plans to veto the budget this week because it includes a provision dealing with a labor dispute between the faculty and management of the Vermont State Colleges.

VPR’s Bob Kinzel reports:

(Kinzel) If lawmakers and the governor can’t reach a compromise over the Vermont State College controversy in the next three weeks, the state of Vermont will find itself in a position that it’s never been – starting a new fiscal year without a budget in place.

State Treasurer Jeb Spaulding says that outcome would shut down virtually all departments of state government.

(Spaulding) “There’s no question that the consequences of not having a budget for the next fiscal year before July 1st would be serious. The law is clear except for some specific exceptions – no monies will be paid out of the state treasury except upon special appropriation, no appropriations bill, no people getting paid, no bills being paid.”

(Kinzel) Spaulding is also concerned that a budget impasse could damage Vermont’s credit rating. Administration Secretary Charlie Smith says the governor plans to veto the bill later this week.

Smith says there’s a simple solution to this problem – lawmakers can recognize the soundness of Douglas’s argument and remove the provision from the bill that calls for binding arbitration to settle the dispute at the State Colleges.

(Smith) “We’re very optimistic that we will have a budget well in advance of July 1st, because what’s in question here is really a simple task that ought to take no more than a matter of hours. There are two or three offending sentences and that’s about it. So it really should be a fairly simple task to produce a budget so we’re ready to go as normal on July 1st.”

(Kinzel) Senate President Peter Welch says he wants to avoid a budget impasse and he’s working to find a compromise that will satisfy all parties in the State College dispute.

(Welch) “The General Assembly will not be able to overturn that veto, so we know where we’re going to end up. A special session is theoretically simple but it involves bringing 180 people in. And there’re 180 different opinions and anything can happen. I think it’s much better if we can manage somehow to resolve this without the necessity of coming back to Montpelier.”

(Kinzel) When would a special budget session be held? Administration Secretary Charlie Smith says he’d like to see it take place before the last week of the month.

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

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