STATE BUDGET: Poverty in crosshairs

Gov. lays out spending plan

Michelle Monroe

By Michelle Monroe

Executive Editor

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MONTPELIER — Gov. Peter Shumlin was set to address the Vermont Legislature this afternoon, outlining his budget priorities for the coming year.

The Messenger learned this morning that the governor would focus on poverty, healthcare, education, transportation and the previously announced initiatives to tackle drug abuse and addiction.

The information the newspaper had today was filled with spending proposals and short on revenue sources. However, the budget will be balance, without increases in income, sales or rooms and meals taxes, according to the governor’s office.

“Every spending proposal I have pursued as governor has been designed to promote economic development and prosperity for Vermont. This budget is no different,” Shumlin was to say during his budget address today. “It keeps our promise to invest in our infrastructure and in our people, and it relies on a unified, coordinated strategy for economic growth, targeting every sector of our economy and every one of our communities.”

State economists had previously identified a $70 million gap between projected revenues for fiscal year 2015 and projected expenditures.

Although tax revenues have been slowly increasing over the past three years, the state is facing a loss in federal funding as the result of the sequester, across the board cuts in the federal budget that kicked in automatically when Congress failed to pass a budget.

Poverty

Shumlin is proposing $4.3 million to support his anti-poverty initiatives.

He has proposed doubling funding for the Vermont Rental Subsidy Program to $1 million. The subsidy program assists those who qualify for federal housing assistance, but have not yet received it. Those who work with the homeless, including Linda Ryan, director of Samaritan House, initially proposed the program. Ryan has previously praised the program for making it easier to locate permanent housing for homeless families.

Shumlin is seeking $300,000 in increased funding for the Emergency Solutions Grant to offset $200,000 in federal cuts to the program. The grant provides support for emergency shelters, and the additional $100,000 is intended to support increased shelter capacity in the winter months.

To further assist homeless families, the governor is asking for an increase of $200,000 in Family Supportive Housing, which provides case management and aid to homeless families as they find housing.

Quality child care and early education have long been a priority for Shumlin, and his budget proposal includes and additional $800,000 for high quality day care providers and $740,000 in child care assistance as a result in an update of the federal poverty level.

The state’s childcare assistance program provides larger subsidies to providers who have demonstrated excellence through the state’s STARS program.

Health care

On the health care front, Shumlin is proposing an increase of 2 percent in Medicaid reimbursement rates starting on Jan. 1, 2015. The increase is an effort to minimize the cost shift from Medicaid to private payers and reduce the pressure on insurance premiums.

Shumlin is seeking an increase in the Health Care Claims Assessment on insurers of 0.8 percent to cover the costs of the Vermont Health Exchange.

The governor’s budget includes funding for the opening of the Vermont Psychiatric Care Hospital in Berlin and continues the implementation of community based mental health programs as well as increased funding for some human service programs with increasing caseloads. He is proposing an additional $10.5 million for Developmental Services.

Education & training

The budget includes a plan to address the longstanding problem of inadequate funding for the state’s teacher retirement program. The state has been covering shortfalls in the funding of health care for retired teachers by removing funds from the teacher retirement fund, but has not repaid them.

Shumlin is proposing $2.5 million to support a phased-in plan being developed with State Treasurer Beth Pierce to pay for retired teachers health insurance in partnership with teachers and school districts.

As part of the plan, the state would use $8 to $10 million from the Supplemental Property Tax Relief Fund to help pay for health insurance for retired teachers in order to avoid property tax increases.

The proposed budget includes full funding of the statutorily required transfer of funds from the general fund to the education fund and actuarial recommendations for contributions to the state employees’ and teachers’ pension plans.

There are no cuts to the Next Generation workforce development program or the Vermont Job Training Program in Shumlin’s budget, and increased funding for Regional Development Corporations and the Small Business Development Center.

Other increases in economic development programs include: 5 percent more for the working lands fund; 9 percent more for the Vermont Housing and Conservation Board and $500,000 more for the downtown tax credits. The increased tax credits will leverage $7.5 million in additional investment in downtowns and village centers, according to the administration.

The governor is also proposing a two percent increase in funding for higher education as of Jan. 1, 2015.

 Transportation

The proposed $686 million transportation budget includes significant infrastructure investment and reflects the governor’s ongoing focus on climate change with increased investment in public transportation.

The governor is proposing an increase of 5 percent in transportation spending, with the state spending $250 million. The budget includes $407 million in federal funds and anticipates $3 million in local spending, likely as matching funds for state grants. More than 100 bridges will receive $140 million in repairs, with $116 million for more than 300 miles of pavement.

The transportation budget also includes $19 million for rail along the state’s western corridor. An additional 10 miles of rail and other improvements will bring the state within 12 miles of being able to offer rail service from Rutland to Burlington.

Lastly, the transportation budget allocates $32 million for public transit including: expanding car- and van-pooling; boosting the intercity bus network; and developing electric vehicle charging stations for the regional “Green Highway.”  It also invests nearly $8 million in bicycle and pedestrian infrastructure.

Drug programs

Initiatives announced during the governor’s State of the State address last week are also included.

The governor reiterated his proposal to allot $650,000 for substance abuse treatment and mental health services for recipients of Reach Up. The increase in funding will be matched with federal dollars for a total of $1.23 million, and was the top recommendation of a Reach Up Policy Workgroup created by the legislature.

Overall, the governor is proposing $10 million for drug treatment and prevention with $8 million in ongoing funding for the Care Alliance for Opioid Addiction. The governor has proposed boosting that funding by $200,000 in the current fiscal year as part of the annual budget adjustment.

Shumlin is seeking $760,000 to expand rapid intervention based on the Chittenden County model. The program uses evidence-based assessments to help our state’s attorneys and our courts determine who may qualify for immediate treatment and services, and then hire the necessary personnel to monitor their recovery.