Legislators Reject Douglas Budget Cuts, Approve Counter-Proposal 

This just in: The legislative Joint Fiscal Committee has rejected many aspects of Gov. Jim Douglas' proposal to trim $19.7 million from the current fiscal budget.

As we pointed out this week, there is increasing debate on whether the state can simply cut its way out of the current budget deficit. That's not what we've done in the past (1983 and 1991). Everyone knows there will have to be drastic cuts, but others hope to balance those cuts with use of the rainy day funds, targeted tax increases, and potential federal aid.

Here's a portion of today's release about the committee's decision this morning: "After hearing the testimony of those who would be affected by the Douglas Administration’s proposed rescission, the Joint Fiscal Committee determined that the state cannot solve its budget shortfall by disproportionately placing the burden on the backs of the most vulnerable Vermonters." 

The committee's package still cuts $19.7 million from the current budget, it just shifts which programs will bear the current burden. 

The committee rejected some of the cuts aimed at the mental health community, working parents, and small businesses.

The committee's plan reduces these impacts by asking the mental health and developmental disabilities agencies to accept a 5 percent half year cut, instead of an 8 percent half year cut; postpones the implementation of the childcare eligibility change until April 1, 2009 instead of eliminating the eligibility change; and accepts only half the reduction in the Individual Development Accounts and Micro business lending program.

These measures not only reduce the impact on vulnerable and working Vermonters, but send $2.2 million more into the community than the administration’s proposal, due to federal matching funds, according to the committee's release.

Leading the effort to craft a counter-proposal was Senate President Pro Tem Peter Shumlin (D-Windham): and incoming House Speaker Rep. Shap Smith (D-Morrisville).

“In these difficult times, we must make many difficult decisions now so our choices and their impacts do not become even more painful in the next year,” said Shumlin. “Yet, these decisions must be measured and thoughtful.”

“We made these changes with an eye to the future," added Smith. "Without adequate mental health services, vulnerable Vermonters may end up on our streets and in our hospitals, which costs more in the long run.  Working parents rely on access to affordable child care and the micro businesses program is more important than ever as Vermonters pursue lasting economic opportunity in these difficult times."

To achieve the $19.7 million rescission, while restoring funds to the programs listed above, the committee cut funding to the Vermont Housing and Conservation Board funds, retained the unallocated Next Generation funds, transferred unused energy loan program funds, accepted the Judiciary’s proposed savings, changed the funding source for the drivers’ education grants and the technical center leadership education grants to the education fund, and re-assessed the value of the 5 percent reduction to exempt employees to reflect benefits and non-general fund savings.

Here is a download-able list of the changes (Download PDF20081219124605 ).