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Shumlin Administration To State Agencies: Identify Programs That Could Be Cut

Outgoing Gov. Peter Shumlin has delivered his final budget address, but members of his administration still have to assemble one final spending plan. And they’re asking agency heads to identify government programs they think the state could do without.Each year, Secretary of Administration Justin Johnson issues budget directions to the heads of government agencies. This year, he’s asking them to show him what it would look like if they capped next year’s budget at this year’s spending levels.

“And there are different ways to do that,” Johnson says.

The rising cost of things like health care and employee salaries means a level-funded budget effectively requires equivalent cuts elsewhere in government. Johnson says one way to get to level funding is piecemeal reductions across a wide spectrum of budgetary line items.

He says there’s a problem with that approach.

“You either end up with a bunch of people in programs that don’t really have enough money to do what they’re supposed to do, or you end up in budget adjustment with people saying, ‘Well, we thought we could do it with X, but now we need more money,'” Johnson says.

So instead, Johnson has asked agencies to level fund the budget by identifying a single program that could either be drastically modified or eliminated altogether to achieve the necessary savings.

"Look at what you’re offering and say, ‘Is there something that we would not do so we can do the other things better?’” Johnson says.

Johnson stresses it’s just an exercise, not a final policy decision. It’ll be up to the next governor to decide which elements of the budget to adopt, and which ones to modify or reject.

But Johnson says with increasing demands on state government, and limited revenues to pay for it all, something has to give.

“Just because we do a program doesn’t mean that we’re always going to do it and that it’s a program for life,” Johnson says.

Stephanie Yu is a policy analyst at the Public Assets Institute, a left-leaning policy group that advocates for increased public spending on many government programs. Yu says Johnson’s budget memorandum highlights flaws in the existing approach to state budgets.

“Which is, this is how much money we have, and therefore that’s all we can spend,” Yu says.

Instead of managing to the money, Yu says the state should instead begin with an inventory of need.

“The problem is that this budget memo really starts with just half of the conversation – 'Let’s find programs we can cut' – instead of also having the other half of that conversation, which is, 'These are the programs that we really need to do, and they’re underfunded now, and we need to address that,'” Yu says.

Vermont Republicans argue that increases in state spending under Peter Shumlin have vastly outpaced taxpayers’ ability to pay. But Yu says it’s the rising cost of health care – as reflected in Medicaid budgets and benefits costs for state employees – that’s consumed the lion’s share of those increases. 

Yu says, if you take health care out of the mix, “We’re actually spending less than we were 10 years ago.”

Initial budget proposals from agency heads are due back this week. Secretary of Administration Johnson says final budget directives will go out in mid-December.

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