Notes from Montpelier
by Rep. Bill Frank

          After a very busy week of long days and late nights the legislature adjourned its 2009 session at 10:47 pm Saturday, May 9.  We left Montpelier after putting together a budget package for fiscal year 2010 in very challenging economic times; a budget that required many hard choices.  The budget was notable because of the number of people who didn’t like it because there were too many cuts in programs, and those who opposed it because it didn’t have enough cuts.  The budget package lowers the marginal income tax rate for middle and lower income Vermonters; those making less than $200,000.    

           The deficit that the Vermont Legislature tackled was $281.5 million.  This enormous hole was filled by $59.3 million in cuts, $4.8 million in a new effort to collect unpaid taxes, $21.2 in new revenue, $18.4 million in reduction of general fund transfer to the education fund, $3.2 million from caseload reserves and $174.5 million of federal stimulus funds (ARRA).  To put the new revenue package in context, only $21.2 million in new taxes are raised to solve a $281.5 million budget problem – that’s just 7.5 percent.  Some Vermonters will share in the responsibility by seeing fewer services. Some Vermonters will pay higher taxes. But we are all in this together.

            Before solving the FY 2010 budget challenge, the state had already made over $100 million in cuts and adjustments to spending. In August, 2008, $23.5 million in cuts and adjustments, including $600,000 from environmental conservation, $3.4 million from the Global Commitment program, $260,000 from Fish and Wildlife and $3 million from the Tobacco Trust Fund.  In December, 2008 an additional $20 million in cuts and adjustments, including $240,000 from the Department of Agriculture, $810,000 from protection of persons and property, $1.1 million from public health and $4.4 million from mental health.

            Perhaps the most difficult choice for me that was made in the budget is agreeing to a portion of the Governor’s proposal to reduce support to the Education Fund. The budget does not agree to the scale of the Governor’s proposal – $63 million – or the scope – to permanently move teacher’s retirement obligations into the Education Fund and on to property taxpayers.  The budget does, however, temporarily reduce the transfer from the General Fund to the Education Fund by $18.4 million – over 70 percent less than the Governor proposal to reduce the transfer and shift teacher’s retirement into the Education Fund. 

            A $3 million cut to the Current Use program was also under consideration.  Ultimately additional federal stimulus dollars were found to fully fund the program for this year. The budget language tasks the Current Use Advisory Task Force with making a recommendation on how best to save $3 million from the program next year. 

            I feel under these difficult economic time this is a good budget for Vermont.  It doesn’t have everything the legislature or the Governor would like but it is a very good compromise.  I think the Governor should sign it but he has said he will not.  The Governor has called a special session of the legislature on June 2^nd to act on his veto.