By a vote of 98 to 18, the Vermont House passed the state budget (known as the “Big Bill”), and it is now in the Senate for their consideration. As you can imagine, the numbers are staggering, and there is a large amount of information to parse through. Like any major piece of legislation, everyone can find things they like, as well as things they don’t like. I do have a great deal of respect for the hard work that the House Appropriations Committee put into this budget. That is not to say that there are not concerns; balancing a budget is no easy task in the best of years, let alone in a deep recession.
The budget we passed last week relies on a number of assumptions. For example, one assumption was that the federal government would recertify the Vermont State Hospital – making the state eligible for $8 million in federal funding. But we learned on Friday – before the final vote on the budget – that recertification was denied, resulting in the loss of $8 million that we were counting on. By passing the budget, we left it up to the Senate to find another $8 million in spending cuts or new revenue (aka taxes). To put this into perspective, we avoided an increase in the property tax rate by squeezing just over $10 million from a combination of new taxes and a raid on the tobacco fund. I cannot imagine that finding another $8 million will be any easier.
It is also important to note that this budget is built around the assumption that an earlier cost-cutting initiative - known as “Challenges for Change” - will deliver $38 million in savings for FY11. This initiative, which passed into law back in February, creates a variety of task forces charged with identifying ways to achieve these cost savings. The catch? These task forces still need to come back to the Legislature for approval of any substantive recommendations (i.e. those that require statutory changes).
Realistically, the biggest savings are likely to come from the most controversial recommendations. If they were not controversial, they would have been implemented last year, after the FY10 budget had been cut “to the bone.”
A few questions come to mind. First, will all $38 million represent new cost savings, or are some of the savings already accounted for in the budget that was passed?
Second, will the Legislature have the stomach to accept all the recommendations that come back from the “Challenges for Change” process? And if not, how do we reconcile those differences with a budget that has been designed around the expected savings?
By the time you read this, we will have answers to some of these questions, as the recommendations will have been delivered.
The “Challenges for Change” initiative is a good one. By design, it should bring forward some innovative ideas – ways that we can deliver greater value at a lower cost. However, it is unrealistic to expect the Legislature to accept all the recommendations that come out of the process. For that reason, it would have been helpful to see an outline of the recommendations from “Challenges for Change” before taking action on the budget.
The real challenges still lie ahead of us. Difficult decisions cannot be delegated away or postponed in perpetuity.
Rep. Oliver Olsen
Jamaica
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