Administration seeks $12M in budget adjustment
By Neal P. Goswami
VERMONT PRESS BUREAU | October 31,2013
MONTPELIER — Administration officials told House appropriators Wednesday they will seek at least $12 million in additional funds for the current fiscal year in the budget adjustment.
Finance Commissioner James Reardon told the House Appropriations Committee that the administrations’s annual budget-adjustment bill will be ready for them the first week of December. Administration officials are now meeting with individual agencies and departments to determine their needs.
According to Reardon, at least $12.2 million will be needed to fund a host of areas. The largest chunk, $4.1 million, is needed for the Department of Vermont Health Access to shore up Medicaid funding.
Another $3.3 million is needed for an emergency housing program within the Department for Children and Families. The Legislature reduced funding for emergency housing for the homeless from $4 million to $1.5 million in the current budget. The budget for providing temporary hotel rooms for the homeless had been rising sharply.
Lawmakers chose to invest the funds they cut into other human services in an attempt to curb homelessness. Rep. Martha Heath, D-Westford, chairwoman of the House Appropriations Committee, said the administration’s pending request for the program was “eye-popping” given the Legislature’s intent.
Reardon said DCF has taken steps to reduce the use of hotel rooms and save funding, but additional resources are needed.
“It does appear that the eligibility workers are scrutinizing more carefully than they have in the past,” he said. “This is a number that is still fluid.”
The issue will require more legislative action, however. “You’re going to have to spend some quality time with DCF,” Reardon told the committee.
The Vermont Veterans Home in Bennington will also need additional funds. Reardon said the administration predicts a need for at least $3.1 million. About $1 million is needed for retroactive Medicaid payments — something that is “no fault of the Veterans Home,” he said.
The remaining $2.1 million is to help balance the home’s budget, which had a projected deficit of about $3.5 million for the current fiscal year. Lawmakers provided an additional $1.4 million in the current budget and the remaining $2.1 million is now needed, Reardon said.
“Their census is increasing and obviously that helps bring down the general fund need. So, when we come in in December … it’s something that we’ll have to monitor through the budget gap to see if they can close that gap subsequent to us issuing the budget adjustment in December,” Reardon said.
The state must also pay about $1.6 million for rental space at the National Life building in Montpelier where Agency of Natural Resources workers relocated following Tropical Storm Irene. And the Federal Emergency Management Agency has informed the state that it will terminate reimbursements for relocated AHS workers, an additional $1 million obligation for the state beginning in January.
“We knew we were rolling the dice with the rents and not putting it in the budget and hoping the federal government would come through,” Reardon said.
The administration will also seek $1.6 million for the Department of Corrections caseload. The funds are mostly needed to help cover the cost of detainees — defendants who are jailed before they are convicted of crimes.
Still, Reardon said the administration’s original budget has largely been on target and requires little modification.
“You’re talking 1 percent (in adjustments). It doesn’t get any better than that. I just wish it was 1 percent the other way,” he said.
The committee also heard from Stephen Klein, the chief legislative fiscal officer for the Joint Fiscal Office. Klein said the state used $55 million in one-time funding to patch the current budget. The gap is expected to rises to about $70 million this year.
Klein encouraged the panel to find more long-term funding solutions.
“I would say that that is sort of everybody’s wish and everybody’s hope,” he said. “That mouth opens again and next year you have the same problem.”
Meanwhile, the state is facing several high-growth items paid for by the general fund, including the teachers retirement fund, Klein said. The cost of maintaining the fund has been increasing rapidly, he said in something of an understatement.
In 2001, the state budgeted $4.1 million. The current budget includes $26.5 million for teachers retirement. And by 2040, projections show that the state will need to budget a whopping $77.4 million to maintain that fund, according to Klein.
The committee also sought to lay out its priorities for the upcoming legislative session. Rep. Anne Theresa O’Brien, D-Richmond, asked that the state continue moving toward a more results-based budget that clearly shows how effectively taxpayer dollars are being spent.
Rep. Kitty Beattie Toll, D-Danville, asked that the committee have more time to review how programs and services are paid for. The committee’s priorities may change depending on funding sources, she said.