MONTPELIER — State and federal budgets are feeling the effects of across-the-board spending cuts that began taking effect last week.
But experts say that sequestration process will have little impact on the finances of the municipalities whose budgets went up for votes across the state Tuesday.
The relative dearth of state and federal aid flowing into town and city budgets will for the most part insulate them from any direct financial hits, according to Steve Jeffrey, executive director of the Vermont League of Cities and Towns.
“All these years of not getting anything from the state or the federal government is paying off now, I guess you could say,” Jeffrey said.
One of the biggest line-item allocations in the state budget involves aid to town highway programs. But lawmakers have thus far indicated that the annual appropriation won’t be reduced.
Barre Mayor Thomas Lauzon said city staff have combed through the budget in search of areas that might be vulnerable to sequestration-related cuts.
“Anyone who hasn’t been thinking about it hasn’t been governing,” Lauzon said. “But I think there’s going to be a less direct impact on municipalities.”
Lauzon said that doesn’t mean the city won’t suffer the ill effects of the $85 billion that will be cut from federal spending if Congress doesn’t negotiate a resolution. The city is host to numerous human services organizations with heavy reliance on federal aid. Lauzon said he’s worried cuts to those groups will hurt the residents relying on them for everything from fuel aid to workforce training.
“Whenever nonprofits have less money to serve constituents with, there are going to be pass-through effects on the places where those constituents live,” Lauzon said.
He warns that Barre won’t have the financial capacity to rescue local nonprofits.
“We’re under the same pressures financially as everyone else,” Lauzon said. “We simply don’t find ourselves in a position where we could fill any gaps with a municipal appropriation.”
Rutland Mayor Christopher Louras said his city too lacks the resources to bail out area organizations affected by the sequester and that the charter wouldn’t allow it anyway.
Louras said the city has scrubbed its budget with an eye toward sequester-related effects.
“We’re still sorting that out to some extent, but so far, if there is something out there with regard to that particular area, it’s going to come as a complete surprise to us, because we haven’t found anything yet,” he said.
Louras, however, said the indirect effects could be significant, especially if the sequester continues through the remainder of the fiscal year.
“We don’t provide any social services as a city, but we have a large number of state programs and nonprofits that are doing that work here,” Louras said. “And I could see a potential impact on community mental health if those dollars begin to dry up.”
He said there’s a direct correlation between the strength of the community mental health system and the strain on the city Police Department.
“It becomes a workload issue that could put a real strain on law enforcement,” Louras said.
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