Speaker wants to wait for stimulus package before making budget cuts

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(Host) House Speaker Shap Smith says the state of Vermont is going to get a lot more money from the federal economic stimulus package than first projected.

As a result, Smith says lawmakers should delay consideration of Governor Douglas’s proposed budget cuts until the state understands the details of the federal package.

Smith says it’s possible that some of the cuts can be avoided.

VPRs Bob Kinzel reports:

(Kinzel) The Douglas Administration says it adopted conservative estimates about the impact of the federal stimulus package because it didn’t want to rely on money that might not come to the state.

For instance, the state was expecting an additional $180 million for Medicaid programs over the next two years – the actual figure is going to be closer to $250 million.

The state wasn’t expecting any additional special education or school construction money – now it’s going to receive $90 million and Vermont will get $125 million to ensure that teachers and law enforcement officers don’t get laid off for budgetary reasons.

House Speaker Shap Smith says these figures put the governor’s budget cutting plans in a new light:

(Smith) "I definitely think that we’re looking at a significantly larger sum of money than we had expected from the federal government and until we have a good sense of where the money is going to flow into state government I think we need to hold back and wait with regard to what we do on the budget."

(Kinzel) The governor has proposed eliminating 660 jobs in state government. Smith says that’s not the right approach to take at this time:

(Smith) "It’s clear that what the federal government is trying to do is try to make it so that we don’t have this crisis become worse and if what we’re doing is cutting jobs and taking money out of the economy we’re actually counteracting what the federal government is trying to do."

(Kinzel) Finance Commissioner Jim Reardon doesn’t agree with the Speaker’s approach. He says relying more heavily on federal funds will keep the state budget at unsustainable levels and that Vermont will face brutal budget choices when the federal money is gone in two years:

(Reardon) "If you don’t make those adjustments and you wait a couple of more years then you fall off a cliff and those harder decisions will have to be made at that point in time then there is now."

(Kinzel) Speaker Smith says it’s a mistake "to make decisions about our long term challenges in a crisis environment," and he argues that the new federal money will give Vermont more time to make thoughtful budget decisions in the future.

For VPR News I’m Bob Kinzel in Montpelier.

AP Photo/Toby Talbot

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