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Vermont Governor Releases FY2021 Budget Proposal

Vermont Statehouse
WAMC/Pat Bradley
Vermont Statehouse (file)

At a tricky time for fiscal planning, Vermont Governor Phil Scott this week outlined a budget plan he will present to the legislature.
The Vermont legislature passed a first quarter FY 2021 budget effective until September 30, 2020 before adjourning on June 26th.  Members will return to full session on August 25th to complete the budget process.

Before the Legislature adjourned it passed measures to allocate first quarter fiscal year 2021 state appropriations, federal Coronavirus Relief funds and other state fiscal requirements. It was considered a transitional budget before lawmakers return next week.

Republican Governor Phil Scott:  “As I've said many times we are facing a once in a century crisis. And despite the challenges that have come with it we put together a budget that's balanced with a combination of efficiencies and state and federal revenues but does not include new taxes or fees. The bottom line is we're not spending more than we're taking in and we're living within our means. Again this budget does not raise new taxes. Because I don't believe this is the time to be asking for more from Vermonters especially when we consider we haven't yet felt the full magnitude of the pandemic nor do we know the extent of the economic impacts.”

Scott adds his proposal doesn’t cut essential programs:  “As well this budget does not tap into our rainy day or reserve funds. In addition to our strong fiscal position we're using our federal relief dollars wisely to help us manage through the crisis, help employers survive and maintain the programs serving the most vulnerable. But we must also recognize that there will be more difficult budget decisions ahead.  The next fiscal year that begins July of 2021 could be a much bigger challenge in part because of the one-time nature of the support from Washington but also because the unknowns we face in our economy and with the virus.”

Scott and officials were questioned about shortfalls. Administration Secretary Susanne Young clarified where the fiscal gaps are occurring.  “I would just point out that the $180 million shortfall is in the General Fund and I believe we mentioned $60 million in the Education Fund.”

The budget gaps, especially in education funding, led to questions about how the state could mitigate potentially steep increases in property taxes. Governor Scott says a lot depends on what happens in Washington.  “We'll know more I think once the Congress is back into session and they work out a deal with the administration and to see whether there's going to be any more dollars flowing into the states and whether those can be used for any deficits as well for the startups for education. It’d make a dramatic difference in our budgets.”

In the meantime Education Secretary Dan French reported that schools are receiving CARES Act funds appropriated earlier this year by the legislature.  “The General Assembly appropriated $50 million for K12 education and reopening costs under the CRF (Coronavirus Relief Fund). These funds were allocated under specific programs and each program must get separate approval by our fiscal oversight group to ensure the funds are used in a manner consistent with the CARES Act. We've been working with the Joint Fiscal Committee to identify solutions to the shortfall in the Education Fund including exploring to what extent CRF and ESSER (Elementary and Secondary School Emergency Relief) funds could be used to address the shortfall in the Education Fund. We will continue these conversations with the legislature in the coming weeks.”

Democrat David Zuckerman, the lieutenant governor who is challenging Scott, released a statement criticizing the budget, pointing to a lack of action to deal with a $23 million deficit within the state college system.