MONTPELIER -- Despite the state's battle against opiate addiction and its resolve to provide better supports for the children of needy families, those sectors of state government were not spared Wednesday when lawmakers finalized $31 million in budget cuts.

Alcohol and drug abuse programs will lose $673,000. The budget for the Department for Children and Families was reduced by $3.8 million largely because of a lower-than-anticipated caseload for the state's welfare program known as Reach Up.

Perhaps the most widely felt cut for alcohol and drug treatment programs will be the elimination of a promised 1.6 percent increase to organizations that accept Medicaid patients.

Gov. Peter Shumlin (AP file photo)
Gov. Peter Shumlin (AP file photo)

The cut will hit drug and alcohol treatment providers, as well as mental health service providers, the hardest, according to Julie Tessler, executive director of the Vermont Council of Developmental and Mental Health Services.

That's because 90 percent of the clients who use community designated agencies for treatment are Medicaid patients who receive government-funded insurance for the poor and disabled. Unlike hospitals and other doctors who can pass on the cost shift to clients who have private insurance, designated agencies have to simply cut back.

The low Medicaid reimbursement rate forces those providers to pay their staff smaller salaries, making it hard to recruit and retain highly educated staff, Tessler said.


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The Alcohol and Drug Abuse Programs division of the health department had $465,000 cut from money allocated to incentivize substance abuse treatment providers to perform better.

The department sets aside incentive money each year for programs that meet certain targets but the targets weren't being hit, said Barbara Cimaglio, deputy health commissioner.

"We had more money set aside than we had people hitting the targets to get extra payments," Cimaglio said.

The money also comes from funds set aside to provide extra training and other programming, she said.

The cuts do not come from providers' base budgets that pay for everyday services, such as methadone treatment. The Medicaid reimbursement rate, however, will affect the regional drug addiction treatment hubs across the state.

The elimination of the Medicaid reimbursement rate increase will be especially painful this year, Tessler said, because the substance abuse treatment providers will likely be asked to serve more clients because of the implementation of a new court program established last legislative session that diverts addicts who might otherwise go to jail into treatment.

The Department for Children and Families was also hit; it lost less than $4 million of its $400 million budget. The cuts will come from several places:

  • $138,000 from staff vacancies within the department. There are about 100 vacant positions today, DCF Commissioner Dave Yacovone said. The department should reach that savings through "the normal ebb and flow of recruitment," he said.

  • $151,000 from removal of the anticipated 1.6 percent Medicaid provider rate increase.

  • $1.3 million from reduced child care caseload. The caseload has been lower than expected for the past two years, at 8441, DCF said.

  • $225,000 from delay of building a wet shelter in Burlington. This savings comes from the general assistance program budget. The shelter construction is still in concept form, DCF said.

  • $2.2 million savings from an expected reduction in the Reach Up caseload. The number of working poor families who receive this benefit is declining. Some of the savings will go to pay for new social workers promised earlier this year.

    Yacovone said despite the budget cuts there will be enough money from Reach Up savings to hire new social workers to improve supports for abused children. There will also be enough Reach Up savings in FY16 to pay for a bill passed this year to expand Reach Up benefits, he said.