House finishes its plan for 2014 spending
By PETER HIRSCHFELD
Vermont Press Bureau | March 27,2013
MONTPELIER — The House Committee on Appropriations has put the final touches on a fiscal year 2014 spending plan that reins in some of the new spending proposals unveiled earlier this year by Gov. Peter Shumlin.
By a 7-4 margin, the committee voted along party lines Monday in approving a general fund budget that shaves more than $15 million from the version presented by Shumlin in January. House Speaker Shap Smith said Tuesday that while lawmakers saw merit in the Democratic governor’s proposals, they don’t believe taxpayers have the capacity to fund them.
Shumlin’s budget raised general fund spending by 5.8 percent; the House plan would result in an increase of 4.7 percent.
“We shared many of the same goals the governor had with regard to the investments that were made,” Smith said. “But we had concerns with regard both to revenue sources and to the amount of spending in the budget.”
Casualties of the House budget scissors include renewable energy subsidies, which had been slated to get $5 million from Shumlin but would see only $1 million in the House plan. The House also eliminated entirely the $6 million Shumlin had allocated for thermal-efficiency programs.
By far the most significant cut came in the area of child-care subsidies for low-income parents, to which Shumlin had appropriated $17 million. The House plan would invest only $3.3 million in new child-care supports.
The House budget also sets aside a $7 million reserve to backfill potential reductions in federal aid.
The House’s distaste for, and distrust in, Shumlin’s revenue proposals helped fuel the discrepancies in spending levels. Shumlin wants to use a tax on “break-open” tickets that he says would generate $17 million annually. Smith, however, said fiscal analysts for the Legislature studied the proposal and determined it would raise only about a third that amount.
“(Shumlin) taxed break-open tickets and gambled that they would result in a balanced budget,” Smith said. “And we just weren’t willing to take that bet.”
Smith said the House also rejected the governor’s other primary revenue source, which came from reducing $17 million from an “earned-income tax credit” that offers tax credits and cash payments to low-wage workers.
“We believe that we should not actually ask 40,000 lower-income working Vermonters to support additional programs in the state of Vermont,” Smith said. “We think that should be a shared burden for all Vermonters.”
Smith said that while attention will focus on differences between the legislative and executive branches, they are actually in agreement on the vast majority of the $1.36 billion general fund proposal. The House, for instance, has given its blessing to a controversial plan that would impose a five-year lifetime cap on a welfare program called Reach Up.
The House has altered the governor’s proposal so as to give affected families a grace period, a move that eliminates any cost-saving benefits from the fiscal year 2014 budget.
Smith said the Legislature’s plan also includes heightened supports for people who stay on Reach Up for years at a time. He said the Reach Up program is designed to help people find work, and that if they can’t secure employment after five years, then perhaps the program isn’t working for them.
The budget heads to the House floor for debate later this week.