Administration Secretary Tells Vermont Agencies To Draft Level Funded Budget Proposals

Aug 27, 2015

The Vermont Secretary of Administration has sent a memo to state government department heads asking for extremely cautious and level funded budget proposals for the 2017 fiscal year.

The memo tells agencies and departments not to expect additional money from the general fund as they make their 2017 fiscal plans. Secretary of Administration  Justin Johnson  wants the budget proposals be level funded to their 2016 budgets because he is anticipating another tight year for state finances.    “We don’t have a final budget target yet. Part of it is because it’s so early in the new fiscal year.  We’re just under three months in. So we haven’t got all the expenditure trends yet.  But there will be increased costs.  What I’m asking them to do in this initial exercise is to absorb those costs in their existing budgets and let me know what that looks like.”

Johnson is expecting the need for a lean budget despite moderate revenue growth.   “It’s only prudent that we look at what we would do with a level funded budget because I’m not convinced that there’s going to be a lot of money out there.  I think that we have to be very careful that our expenses are still outpacing our revenues. Our budget is growing still. You know our revenues are above what they were last year. They’re growing right now somewhere close to four percent, which is helpful. The challenge is that our expenses are growing faster and we as a state government need to get a handle on that.”

The Vermont State Employees Association – the union representing state workers – is criticizing the mandate for level funded budgets.  Executive Director Steve Howard says a level funded budget won’t meet Vermonters’ needs.   “There are a lot of priorities in the budget that Vermonters have made clear that we believe a level funded budget simply will not allow to be achieved. We support new revenue. We put in the last session a revenue package on the table with nearly $32 million in new revenue ideas that included for instance a hotel occupancy fee. We support an income approach that would ask the wealthiest Vermonters to pay a little bit more in making sure that we take care of our children, we take care of the mentally ill, we take care of veterans at the vets’ home and that the workers who are taking care of them are recognized, respected and kept safe.”

Justin Johnson notes that adding new taxes cannot balance revenues to expenses.   “The idea that you could just raise more taxes to cover the difference every year, you would really  have to do it every year. Because until you get the revenues and expenses in line then no matter what you raise this year, you still have to raise more next year.  And so I think people have made it pretty clear that they don’t want to pay a lot more taxes. And in some cases they don’t want to pay any more taxes.  And so it’s incumbent upon us to do a good job of running state government as efficiently as we can.”

Initial budget summaries for fiscal year 2017 are due September 25th .