Business fund hit hardest by revised budget cuts
By DAVE GRAM
The Associated Press | August 14,2014
MONTPELIER — Human services programs won’t be hit as hard as Gov. Peter Shumlin had requested, while a new business development fund will have a bigger bite taken out of it than he wanted.
That’s the upshot from Wednesday’s decisions by the Legislature’s Joint Fiscal Committee on budget cuts Shumlin sought in response to a lower-than-expected state revenue forecast.
“Making spending cuts after a budget has been passed is never easy or painless,” Shumlin said in a statement issued by his office after the committee’s meeting.
But, he added, “We met the challenge of matching our spending with slower revenue growth than projected.”
Two economists who advise the administration and lawmakers on state revenue projections downgraded their forecast on July 24, prompting Shumlin to seek $31 million in cuts to a nearly $1.4 billion general fund budget that had been passed by lawmakers in May and signed by the governor in June.
Lawmakers and administration officials agreed quick action was needed, and that the longer the cuts were delayed, the steeper they would have to be.
The administration presented its recommended cuts Monday; the committee held a public hearing Tuesday when dozens of human services beneficiaries and advocates asked that their programs be spared.
The committee took its final actions Wednesday, making a series of changes to the cuts to which administration officials agreed. State law allows for such cuts when the Legislature, which usually meets from January to May, is not in session.
Wednesday’s actions included:
— Restoring $310,000 for the Youth in Transition Program, with the money coming from what remained in a Medicaid fund as the last fiscal year ended in June. The program is designed to help disadvantaged Vermonters as they enter young adulthood.
— Restoring half of what would have been a $2.3 million cut to services for Vermonters with developmental disabilities and their families.
— Restoring funding to the Choices for Care program, which allows people to stay in their homes who otherwise might need to go to nursing homes. Lawmakers had considered eliminating a $1 million fund for such things as contributing to the cost of making a disabled person’s home accessible.
— Nearly quadrupling the cut the governor had requested in the Vermont Enterprise Fund, which supports businesses starting or expanding in the state. At Shumlin’s urging, the Legislature had created the $4.5 million fund this spring. The cut in that fund goes from the $250,000 Shumlin requested to nearly $960,000.
Lawmakers left in place Shumlin’s plan to eliminate a raise of 1.6 percent that earlier had been approved for Medicaid providers, including doctors, hospitals, mental health agencies, nursing homes and home-health agencies.
Many of the human services cuts hit recipients to a larger degree than they help the state close its budget gap, because they result in the loss of federal matching funds that usually pay for more than half of total program costs.
In one example, a $500,000 savings to the general fund achieved by cutting services for developmentally disabled residents actually cost those programs $1.15 million, officials said.