General Fund transfer

[Carolyn Branagan]

Last week I was pleased to co-sponsor a bill to help solve the problem of the shortfall in the General Fund transfer into the Education Fund.The bill was written by Rep. Oliver Olsen from Jamaica.

The problem started when school districts were supposed to reduced their spending by $23million last year as part of the challenges for change. Some were able to reduce their spending, but most schools in the state did not. The new administration decided not to insist on making the spending reductions mandatory, but instead chose to reduce the General Fund transfer by the same amount and to make that reduction permanent by reducing the General Fund transfer base. So the General Fund transfer last year was reduced  by $23million and the General Fund transfer base was reset with the statutory transfer for FY2013 less than what it would have been otherwise. The $23million reduction was made in lieu of the cuts in education spending that school districts were to make as part of the challenges for change legislation.

 The question of how to get the Education fund transfer back where it should be has been discussed in both houses: the House of Representatives and the Senate. Finally we have a way to correct the shortfall.

In years when there is a 'waterfall' at the end of the fiscal year, normally the legislature makes a wish list of needs to fund with extra money. Waterfall money is money above the estimated revenue and above the amount needed to replenish statutory reserves. The plan unanimously approved by the House last week sends half of all waterfall money into the Education Fund and the same amount will be used to increase the size of the base transfer for future years. The remaining half of the waterfall money can be used as the legislature designates. This continues whenever there is a waterfall until the transfer is back up where it should be.

The change brings us back to original Act 60 calculations and restores the commitment made to Vermont property taxpayers. The expectation is that the Education Fund Transfer will be completely restored using this method.  Let's see what the Senate  does with the idea.

Rep. Carolyn Branagan
Franklin-1, Fairfax/Georgia
Vermont House of Representatives

[rod anode]

shouldnt leftover money come back to me?

[Carolyn Branagan]

Yes, Ed, in a sane world that's what would happen.  But this is Montpelier, and I can't rally the votes to make that happen.These people think if money appears then the legislature has an obligation to spend it on some perceived 'need'.  At least this plan will redirect some of the unexpected revenue into the Education Fund where it will lower your education property taxes.  I think the Senate will blow the plan apart anyway, so it probably  won't become law. 
C.