State budget timeline taking shape
Toolbox
By Louis Porter Vermont Press Bureau - Published: January 15, 2009
MONTPELIER – As officials work on creating a state budget for next year, questions remain about an expected federal stimulus program that could mean hundreds of millions of dollars for Vermont.
How much money – up to $350 million over two years – will actually arrive and how soon, as well as how the use of the money will be limited, remain to be settled.
It appears likely at this moment that the money will be split between Medicaid assistance for states and infrastructure projects, Secretary of Administration Neale Lunderville said Wednesday.
Over the next two weeks, legislative leaders and administration officials will draw up lists of projects that could be funded with the expected federal funding, House Speaker Shap Smith and Senate President Pro Tem Peter Shumlin said.
"We want to work together to develop the best stimulus package lists we can," Shumlin said.
Meanwhile, legislative leaders said it would be irresponsible for Gov. James Douglas to include in his budget savings from his proposed changes in education funding.
"We are concerned about building a budget based on numbers we know won't fly with members of the Legislature," Smith said.
Douglas proposed level funding school districts per pupil from the current fiscal year to the next while his administration and lawmakers figure out a replacement for the state's school funding law, Act 60. He also proposed shifting teachers' retirement responsibilities onto the Education Fund and reducing the transfer of money from the General Fund to the Education Fund. That will give the General Fund additional money to pay for the rest of the services state government provides.
He and Smith are willing to consider any ideas for a new education funding mechanism, Shumlin said. But the "transition year" is nothing short of an increase in the property tax, he said.
"The part the Speaker and I are very concerned about is the $100 million property tax increase," Shumlin said.Spending limits on schools may be placed on districts through Town Meeting Day votes in any case, Smith said.
"I am not convinced that cost control is not going to happen on its own," he said.
Administration officials and the governor have said, and repeated Wednesday, that the transition year is an essential part of limiting school spending and reducing the expanding cost of public schools.
The meeting with the governor that Smith and Shumlin discussed in a news conference Wednesday was private and should have remained private, said Dennise Casey, the administration official who works with lawmakers.
Meanwhile the larger question of how the federal stimulus package – expected in mid-February – will relate to the state budget remains.
The stimulus project money that goes for infrastructure work will likely be separate projects that are not included in the "regular" state budget. However, that money and the portion for Medicaid will likely free up some state funds for other needs, Lunderville said.
In addition, a proposal from Smith – roughly $120 million in new bonding for road and highway projects and to put Vermonters to work – would add another piece to be worked out if it is approved.
"We want to see how much we are going to get from the federal government first," Lunderville said.
But the state's roads and bridges are in bad enough shape that they can probably use all of the money from the federal government, as well as additional state money, Smith said.
Steven Jeffrey, executive director of the Vermont League of Cities and Towns, said if the state works with the towns and if stimulus projects are defined broadly to include schools, sewer and water projects and other infrastructure, it will allow more Vermonters to work on the jobs, more and smaller firms to be hired and more money to be spread across the state.
"I think the key is to make sure it is not just transportation," he said.
Since the stimulus package will be federal money, it will likely not be legal for the state to restrict its use to Vermont companies only, Lunderville said.
However, workers and firms will still have to pay Vermont taxes, he noted.