Budget conferees presented with $6.2 million in budget reductions from Shumlin administration, JFO

by Anne Galloway May 9, 2013 vtdigger.org The members of the House and Senate budget conference committees met twice on Wednesday to find $10 million in budget reductions. Democratic legislative leaders and the governor charged conferees with a double scrubbing of the budget on Tuesday when they announced a deal to scuttle at least $10 million in tax proposals. Instead, Gov. Peter Shumlin, House Speaker Shap Smith and Senate President Pro Tem John Campbell agreed that they would find the money in the $1.3 billion General Fund budget.
Time is running short, however. If lawmakers are to adjourn on Saturday, they must have the budget ready for final vetting and printing by Friday. Shumlin administration officials and Smith say the budget is not far from resolution at this point, even though only $6.2 million in budget reductions have so far been identified and about half of the budget details between the House and Senate have yet to be finalized.
The Speaker and others, however, say the budget is unlikely to be the major hangup; two tax bills now in play both of which are revenue neutral could be among the remaining pieces of legislation that drive the session into next week.
But back to the budget and the options in play. First of all, there is the matter of the target amount of working need, i.e., the size of the gap between revenues and expenditures, which is $9.425 million or $10.325 million, according to the Joint Fiscal Office, depending on how you count the cloud tax, the $1 million-plus, 6 percent sales tax exemption on software that can be downloaded or used remotely. The House wants to allow the current moratorium on the sales tax for software to expire; the Senate would continue the exemption.
JFO came up with $2.5 million in reductions or about a quarter of the target including $966,498 from the Medicare Part D clawback, $851,000 from the projected fiscal year 2013 surplus reserves, a $226,000 adjustment in the unemployment insurance interest adjustment and $187,721 in abandoned property receipts.
The Shumlin administration presented $4 million in cuts. Jim Reardon, commissioner of the Department of Finance and Management, said the Secretary of Administration can generate $2.5 million in labor reductions, including management of overtime, vacancy savings, travel costs and temporary staff. He said the administration would hire consultants to identify savings.
The Tax Department could pull in an additional $1.5 million from enhanced revenue collections, i.e. stepped up tax compliance and audits, he said.
Conferees are also slowly working their way through agreements on roughly 100 separate budget items, ranging from $50,000 for a tax reappraisal for TransCanada hydro electric dams, to another $50,000 for a Health Department needle exchange program and $30,000 for the Crime Victims Center. So far, theyve managed to tick off nearly half of the list.
A number of key decisions have yet to be made. The six members of the committee three House members and three senators have not agreed to details on a five-year cap on the states welfare-to-work program. Nor have they found common ground on $325,000 for the working landscape program, $75,000 for the electric siting report or $147,000 for the Red Cross Vermont Yankee emergency aid request.