The Fiscal Year 2016 Appropriations Act promised that the Legislature would embark on a "multiyear process to align state spending" in order to balance overall revenues and expenditures, aiming to correct the ever-growing spending problem in Montpelier. These steps included reducing the reliance on one-time funding for base budget needs; creating an expectation that all proposed budgets and new programs contain multi-year cost analysis; instituting a budgeting system that uses under 100 percent of the forecasted revenue in order to build a reserve that could offset revenue variability; and exploring a two-year budgeting cycle with at least one subsequent fiscal year funding estimate.
The House Republican Caucus demonstrated its commitment to the above intent by putting forth numerous bills in support of these goals. Its members introduced legislation to ensure a sound fiscal future for Vermont by establishing a joint committee on state employee compensation, imposing a modified hiring freeze in the state government, lowering the cap for income sensitivity adjustments, and mandating a fiscal year reserve.
To reduce the property tax burden, Republicans offered several ways to address the unsustainable education costs and cost growth. Solutions included enacting a moratorium on legislation increasing education property taxes, simplifying the statewide education property tax by reducing the property component of the tax and adding an income-base education tax, and changing the structure of education governance by creating 15 Consolidated Administrative Districts.
In order secure access to affordable healthcare for all Vermonters, Caucus members advocated to provide health insurance plans outside the state exchange and across state lines, Medicaid reimbursement for emergency medical services, and advocated for oversight and abandoning Vermont Health Connect if the necessary repairs cannot be completed in a timely manner and at reasonable cost. Finally, to foster economic development, Republican lawmakers recommended exempting software as a service from Vermont sales tax, creating an angel investor tax credit.
These diligently detailed proposals didn't get very far due to surprising resistance from the majority. For the state government to continue functioning in its present form, it needs $54 million in appropriations. The revenue growth for the 2017 fiscal year is projected at $33 million. Therefore, a $21 million cut is required to balance the budget. Current deliberations reveal that the Democrats are looking to avoid the "difficult choices" they had promised to make last year. They will seek to sustain the present overspending crisis by raising $30 to $35 million in taxes yet again, and are likely to justify it as the only path ahead.
Despite opposition, the House Republican Caucus intends to observe its responsibility to curb the rampant spending of state government and thus recommends the following actions. The Legislature should limit expenses in Fiscal Year 2017 to 100 percent of the projected revenue and not raise or add new taxes; refrain from creating new programs or expanding existing ones (resulting in $6.5 to $8 million in savings); avoid hiring new state government employees; and plan to limit spending in Fiscal Year 2018 to 99.8 percent of projected revenue. In addition, Republican legislators urge that the cost-cutting measures suggested by the Shumlin Administration receive consideration in the budget debate.
Don Turner is the Vermont House Republican Leader.