by Jack Hoffman Public Assets Institute The governor’s office and the Legislature agreed in mid-August on how to close a $12.6 million budget gap that came to light after the Legislature adjourned its 2017 session. The gap surfaced last month when economists for the Legislature and the administration lowered their estimate of how much revenue the state can expect to collect this fiscal year. The good thing about the plan approved on August 17 is that it includes relatively little in actual cuts.
About $4.6 million of the shortfall will be covered on the revenue side. There is money left over from the last fiscal year, and the administration evidently is now more optimistic about brokerage fees.
The plan includes about $6.2 million in savings on Medicaid. Those appear to be genuine savings. Caseloads are expected to be lower than originally thought, and the administration believes it won’t need to spend all of the money that was appropriated two months ago.
The real cuts amount to about $1.7 million and will be felt primarily in the Department of Public Safety, Department of Financial Regulation, and Department of State’s Attorneys and Sheriffs.
With the Legislature out of session, this was as good of a stopgap measure as could be expected.
But Vermont has been struggling with chronic budget gaps since before the Great Recession, which is to say for more than a decade. It’s time for the Legislature to look at the state revenue system and make needed changes so that it better serves the needs of Vermonters.
We all know that deferred maintenance leads to higher spending in the end. We can’t afford to wait any longer to make needed investments in Vermont’s future.