Vermont Governor Gives Budget Address

Jan 15, 2015

Governor Peter Shumlin

Vermont Governor Peter Shumlin delivered his budget address this afternoon.

Vermont state spending has been increasing an average 5 percent annually while revenues are increasing at about 3 percent a year. Legislators must rectify those differences while dealing with a multi-million dollar deficit.  The Democratic governor said the state cannot solve a $94 million gap through taxes and must curb state spending. Shumlin outlined the principles that guided the structure of his budget.  “State government must address ways to be more efficient. Therefore I propose streamlining and consolidating government services and restructuring some programs.  Our third principle is this: wherever possible make smart choices by not cutting programs that deliver more to Vermonters in economic opportunity and support than they cost us. The fourth principle is that we should not cut state programs if it will do more harm than good down the road. Finally my budget  relies on the principle of balance.”

Shumlin said he knows how difficult it is to change the health care system and spent substantial time outlining proposals.  “Despite the challenges and recent setbacks I remain absolutely committed to continuing improvements to our health care system so that we can fulfill the vision set forth by Act 48.”

Shumlin wants to accelerate cost containment in health care and find what he calls “a more rational way to pay ...providers.” He also wants the state to be the first to move from a fee for service system to performance based.

The second theme in Shumlin’s address was dealing with escalating education costs and property taxes.  “This is not a problem that we can pretend to fix by changing the way that we collect revenue. To those who believe that the answer to our education spending problem is to ask for more money from any of Vermonters’  pockets, you’ve missed the point. We have a spending problem and we need to fix it.”

Shumlin’s education proposals include a moratorium on new state mandates, eliminating contradictory incentives in the funding formula, prohibiting teacher strikes and board imposed contracts and requiring mediation. He also wants an enhanced school review system that would allow the Department of Education to adjust funding or close schools.

The governor also offered higher education initiatives, job growth incentives and enhanced tourism marketing plans.

Vermont League of Cities and Towns Executive Director Steven Jeffrey found many concepts but few details in the speech. He says municipalities may have a few concerns including a possible Medicaid cost shift.  “The governor in his speech proposed to cut what’s called the Medicaid cost shift in half this year. Unfortunately what he’s going to do is pay for it through a seven-tenths of one percent payroll tax. So municipalities are a little concerned about how that’s going to play out.”

Audio of the governor’s speech is courtesy of the live statehouse stream provided by Vermont Public Radio.