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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Lawmakers Face Money Issues As They Return To Statehouse

The state is facing a projected $70 million budget gap for next year and legislative leaders have very different ideas about how to deal with this issue.

Lawmakers have faced sizeable budget gaps for the past few years. They’ve closed these gaps by using federal stimulus money and special state funds, and by reducing spending levels in a number of state programs.

Because the federal money is no longer available, most of the burden of closing the new gap will fall directly on the budget.

The budget gap is based on the assumption that state revenues will be on target for the rest of the fiscal year and that overall spending will increase around 3 percent next year.

House Speaker Shap Smith said his goal is to reduce the increase in spending in a number of programs without asking these programs to get by with less money than they receive today: 

“Sometimes people forget that we’re cutting off of the growth rate not actually cutting off of the dollars right now,” said Smith. “So I think we’re going to have to look at where we’re seeing growth within the budget we’re going to make some adjustments to that growth rate.”

And Smith has some specific places where he thinks the growth rate could be cut back.

“We know that there was a recommended 3 percent increase for Medicaid providers, we known that there are increases for higher education,” Smith said. “There’s increased money for the cost of the exchange, those kinds of things we’re going to have to look in all those different areas.”

House Minority leader Don Turner, R-Milton, said he thinks a number of state benefit programs are too generous and need to be scaled back.

“The biggest pieces of the budget in the state of Vermont are one, education and two, human services. So you have to look at those two areas because they’re the biggest portions,” said Turner. “So what we want to do is bring forth some proposals that look at eligibility requirements and where we have been spending the money.”

Burlington Rep. Chris Pearson heads the Progressive caucus. He wants the House to consider enacting an income tax surcharge on wealthy people instead of making any more budget reductions.

“We’re going to be watching very closely to see how the proposals to cut $70 million out of the budget impact low income and working Vermonters,” said Pearson.  “Because I think most of us are over the idea that you could make these cuts painlessly.”

According to a new report, state revenues for the first half of the fiscal year are essentially on target and this means it’s unlikely that the $70 million budget gap will grow in the coming months.