budget address

Overall, I was pleased by Governor Shumlin’s budget address. The fiscal situation in which we find ourselves is extremely difficult, but the path he outlined was surprisingly conservative. Will the plan work?

The budget proposal requires no new broad based taxes, but rather using $27 million in “unanticipated” revenues, $30 million in health care funds carried forward together with federal matching grants, and $36 million in new and increased taxes on medical providers. Hospitals, home health agencies, and other providers including dentists will feel the increases in the health care provider tax, but the change could allow the state to get several million additional dollars from the federal government for health care use. Governor Shumlin seemed to understand that using carryover money is not a long-term solution and could result in merely moving the deficit to another fiscal year.

In the next two years the Governor proposes to spend $13 million to improve broadband infrastructure. This has been needed for several years and would allow Vermonters good internet connections from our smallest towns. The $106 million in repairs on 65 bridges and culverts will be paid by the Transportation Infrastructure Bond set up by the Douglas administration. The costs for Amtrack and other mass transportation improvements seem to be covered by federal money. All these efforts will certainly cause interest among businesses that may want to locate here.

Catamount Health has never worked as planned, and the Governor’s decision to fold it into the state’s existing subsidized health plan makes a lot of sense. Patient deductibles will increase from about $500 to $1,200 but the improvements in efficiency may help keep future increases under control. He promised a new state mental hospital in a two step process: the plans this year and next year we’ll figure out how to pay for it. These systemic changes to the health delivery system are controversial, but seem to be desired by a majority of voters.

Removing the pre-kindergarten limit on number of students will certainly allow public schools to increase their early education programs, but how will we pay for these additional students? How the additional $23 million will be paid is unclear.

The Governor’s plans to increase energy efficiency in state buildings will save energy, but the potential to increase renewable energy development will save more actual money. Other energy saving measures in the budget include a $7 million increase in low-income weatherization funds. All of these plans if successful will help our government better use scarce resource.

Will his budget plan work? It could. Success depends on legislative commitment and how much common sense comes to the surface. We are definitely in a new environment with a different type of state administration. The ways we choose to address health care, education finance, pensions and future tax policy will impact not only the money questions for this year, but also next fiscal year and beyond.

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