House Appropriations sends state budget to the floor

MONTPELIER — The House Appropriations Committee gave unanimous approval Monday to a state budget plan that closes a $72 million projected gap between revenue and expenses without raising taxes and fees, a demand from Republican Gov. Phil Scott that has loomed over the Democratic majority for months.

Overall, the Appropriations Committee, chaired by Rep. Kitty Toll, D-Danville, opted to cut general fund spending by about $67 million. Another $5 million in revenue is expected to be generated through enhanced compliance of existing taxes. The plan was approved by the committee on a 11 to 0 vote Monday afternoon, and won the support of four Republican members.

The House’s 2018 fiscal year spending plan does not raise taxes or fees, as Scott demanded. But it veers sharply from the proposal Scott introduced in late January. Scott sought to achieve savings in the state’s education fund by level-funding school budgets and requiring teachers to pay at least 20 percent of their health insurance premiums. Lawmakers rejected that plan from the outset, and local voters have since approved most local school budgets with increases.

House Speaker Mitzi Johnson

So rather than shifting some general fund obligations to the education fund, as Scott proposed, the House Appropriations Committee set out on a more traditional path to balancing the state budget — spending cuts.

“The governor’s budget took an awful lot of general fund responsibilities and put them on property taxes, and therefore freed up a lot of room in the general fund. But people weren’t so excited about increases in their property taxes,” House Speaker Mitzi Johnson said. “The House basically went back to last year’s budget and said, ‘Let’s just think about current services.’”

The cuts are largely focused on the Agency of Human Services — where the bulk of spending in Vermont is located. The committee is booking about $18 million in enhanced federal funds for the State Children’s Health Insurance Program. The SCHIP program is a state-federal partnership that provides health insurances and services to uninsured children whose families do not qualify for Medicaid.

The plan also uses $10 million from what’s known as the “Medicaid tail.” The state has been saving unused Medicaid money for a number of years, essentially “budget dust,” according to Johnson, that it has been “squirreling away to help with federal transition periods.”

Another $4.5 million in administrative savings within state government is also incorporated into the House’s budget plan. The savings are not-yet identified, however, and will be up to the Scott administration to find.

The House plan also eliminates spending on a program that provides the homeless with motel vouchers in cold weather. Although funding for the so-called “cold weather exemption” is being eliminated, House leaders say funding for temporary shelters that will provide a place for the homeless to go during inclement weather.

“When we instituted the cold weather exemption a bunch of years ago use of motels skyrocketed. That cost just exploded. Yes, that’s an indication of the problem, but like anything else, it can, at times, be abused,” the speaker said.

Johnson said investing in shelters in areas that see the highest use of motel vouchers will help the state save. She said the state is maintaining flexibility for victims of domestic violence and people with disabilities to receive cold weather exemptions.

“It isn’t just a straight cut off and elimination, it’s putting additional resources in to help with the issue of emergency housing and it also creates some flex funding for special circumstances,” she said.

The House is also seeking $2.5 million in savings by cutting grants to non-profit agencies that help AHS fulfill its mission. The secretary of AHS would have the discretion to decide which groups would see the cut.

Additional AHS savings will come from the Department of Corrections, where Johnson said $3.1 million will be cut by investing in more electronic monitoring and housing to reduce the use of out-of-state prison beds.

And adding more caseworkers within the state’s Chronic Care Initiative, which helps high-need Medicaid patients manage their care, will net a savings of $1 million.

“When we invest a little more in Chronic Care Initiative caseworkers and people get care managed better, we see a dramatic savings,” Johnson said. “The people being cared for by these caseworkers are in the top 5 to 10 percent of Medicaid users. They have five or more serious, chronic conditions. These are people with high medical needs.”

The state’s online health insurance marketplace, Vermont Health Connect, will also see a $2.8 million savings by allowing people to bypass the website and purchase insurance directly with insurance carriers. The Scott administration proposed the savings and the House Appropriations Committee accepted it.

Since rejecting Scott’s budget proposal, Democratic House leaders have called on Scott to present an alternative proposal. But Scott resisted, leading Johnson and House Appropriations Committee Chairwoman Kitty Toll, D-Danville, to hold a March 15 news conference where they lambasted Scott for being disengaged from the budget process. Johnson said the tactic seems to have worked and administration officials have been more communicative since then.

“Since that press conference I think there has been a little more conversation. Being able to say, ‘Hey, we need to work together,’ in a public fashion, has worked,’” the speaker said.

House Minority Leader Don Turner, R-Milton, said Monday he has yet to review the details of the House spending plan but is encouraged by what he knows.

House Minority Leader Donald Turner

“I think many of us are interested in supporting a budget as long as there is no increase in taxes or fees, not a reliance on one-time money and a decrease in spending,” Turner said. “We’ve been looking for the last seven years to rein in spending and thanks to the insistence of the governor, it appears the majority has gotten the message.”

Turner said House Republicans may not have an official caucus position on the budget, leaving the decision of whether to support the plan to individual members.

“I don’t know that we will take a caucus position. There’s a lot of interest in supporting a budget that doesn’t raise taxes or fees because that’s what we ran on and what the governor ran on,” Turner said.

Johnson, noting the 2018 fiscal year budget will grow by just 0.7 percent under the House plan, said she believes it will receive strong support on the House floor. It is expected to be up for debate on Thursday and Friday.

“I think we will have broad support on the floor. I am hoping. I don’t want to jinx anything,” she said.

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