Vermont state budget

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Vermont state budget

Flag of Vermont.png
Budget calendar:  Annual
Current fiscal year:  2015
State credit rating:  AA+ (as of May 2012)
Current governor:  Peter Shumlin
Financial figures
GF expenses[1]:  $977 million (estimated for FY 2013)
All funds expenses:  $4.960 billion (estimated for FY 2013)
Spending % change:  Decrease.svg1.14%[2]
% from federal funding:  34.79%
State debt:  $7,866,666,000
Per capita state debt:  $12,566
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Between fiscal year 2009 and fiscal year 2013, Vermont's total expenditures increased by approximately $0.641 billion, from $4.319 billion in 2009 to $4.960 billion in 2013. This represents a 14.84 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

This page contains information about budget processes and policy issues in Vermont, including:

  • a summary of the budget drafting process
  • trends in expenditures and revenues
  • current and past fiscal year budget developments
  • financial transparency measures

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instructions are sent to state agencies in September of the year preceding the start of the new fiscal year.
  2. Agencies submit their budget requests to the governor in October.
  3. Agency hearings are held from October through December.
  4. The governor submits his or her proposed budget to the state legislature in January.
  5. The legislature typically a budget in May. A simple majority is required to pass a budget. The fiscal year begins July 1.

In Vermont, the governor cannot exercise veto authority over the budget.[6]

The governor is not legally required to submit, and the legislature is not legally required to pass, a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Vermont $977 $1,662 $2,248 $73 $4,960 $7,915.36
Maine $3,042 $2,564 $2,176 $16 $7,798 $5,870.65
Massachusetts $25,509 $15,548 $17,135 $2,106 $60,298 $9,009.35
New Hampshire $1,262 $1,601 $2,080 $81 $5,024 $3,796.11
Rhode Island $3,268 $2,659 $2,122 $84 $8,133 $7,734.58
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Vermont can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Vermont 31.1% 1.8% 2.1% 25.3% 2.8% 12.8% 24.2%
Maine 13.1% 3.4% 2.6% 28.8% 1.7% 8.6% 41.8%
Massachusetts 10.7% 9.3% 2.5% 20.7% 2.1% 6.2% 48.6%
New Hampshire 23.5% 2.7% 1.9% 23.9% 2.1% 10.1% 35.9%
Rhode Island 14.2% 13.2% 1.4% 25.0% 2.4% 6.5% 37.4%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, the share of the state budget spent on Medicaid rose by 6.40 percentage points, or 33.9 percent. During the same period, elementary and secondary education spending rose by nearly five percentage points, or 17.8 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 31.1% 1.8% 2.1% 25.3% 2.8% 12.8% 24.2%
2011 31.9% 2.0% 2.2% 25.5% 2.9% 10.9% 24.5%
2010 33.0% 2.2% 2.2% 25.9% 2.9% 9.8% 23.8%
2009 26.2% 1.6% 1.9% 19.6% 2.3% 7.1% 41.3%
2008 26.4% 1.8% 1.7% 18.9% 2.5% 7.2% 41.5%
Change in % 4.70% 0.00% 0.40% 6.40% 0.30% 5.60% -17.30%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Vermont $231 $661 $95 $0 $302 $1,289 $2,057.04
Maine $1,034 $1,495 $171 $0 $351 $3,051 $2,296.92
Massachusetts $5,164 $12,831 $1,822 $0 $7,352 $27,169 $4,059.42
New Hampshire $0 $0 $552 $3 $1,728 $2,283 $1,725.03
Rhode Island $873 $1,075 $137 $1 $1,238 $3,324 $3,161.17
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Vermont ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $231 $661 $95 $0 $302 $1,289 $2,057.04
2012 $229 $593 $84 $0 $293 $1,199 $1,915.48
2011 $217 $551 $94 $0 $313 $1,175 $1,876.04
2010 $209 $500 $59 $0 $282 $1,050 $1,677.87
2009 $214 $532 $61 $0 $282 $1,089 $1,751.48
Change in % 7.94% 24.25% 55.74% 0.00% 7.09% 18.37% 17.45%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

Fiscal year 2015

DocumentIcon.jpg See budget bill: HB 885

Governor Peter Shumlin announced his fiscal year 2015 budget proposal on January 15, 2014. Under the governor's proposal, total spending for fiscal year 2015 would have equaled approximately $5.62 billion, including $1.44 billion in general fund expenditures.[14]

On June 11, 2014, Shumlin signed into law the fiscal year 2015 budget. The enacted budget totaled $5.6 billion.[14]

Fiscal year 2014

DocumentIcon.jpg See budget bill: HB 530

Vermont state budget -- 2014
Vermont State Legislature
Text:HB 530
Legislative history
Introduced:March 26, 2013
House:March 29, 2013
Vote (lower house):91-49
Senate:May 2, 2013
Vote (upper house):24-4
Conference:May 14, 2013
Governor:Peter Shumlin
Signed:May 28, 2013

On May 28, 2013, Governor Peter Shumlin signed the state's fiscal year 2014 budget into law. The budget as enacted included increased funding for free school meals and college courses for high school students, both of which were measures championed by Shumlin.[15]

The fiscal year 2014 budget was funded in significant part through one-time monies. Shumlin said he was hopeful that revenues would increase with the improving economy. "We may well be coming to the end of tight budgets, but you just never know, anything could happen," Shumlin said.[15]

Fiscal year 2013

See also: Vermont state budget (2012-2013)

Fiscal year 2012

See also: Vermont state budget (2011-2012)

Fiscal year 2011

See also: Vermont state budget (2010-2011)

Fiscal year 2010

See also: Vermont state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Vermont ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $889 17.7% $2,241 44.7% $1,831 36.5% $56 1.1% $5,017
2010-2011 $744 15.3% $2,072 42.6% $1,966 40.5% $78 1.6% $4,860
2009-2010 $774 16.6% $1,954 41.9% $1,865 40% $74 1.6% $4,667
Averages: $802.33 17% $2,089 43% $1,887.33 39% $69.333 1% $4,848
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Vermont had a state debt of over $7 billion. Its state debt per capita was $12,566. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[16][17]

Total state debt in Vermont[18]
Type Totals U.S. rank
Total state debt $7,866,666,000 49
Per capita debt $12,566 36
State and other fund expenditures $3,130,000,000 43

Public pensions

See also: Vermont public pensions and Vermont public employee salaries

A 2012 report from the Pew Center on the States noted that Vermont's pension system was funded at 75 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as needing "improvement."[19]

Taken together, the funding ratio for the state's pension systems decreased from 92.78 percent in fiscal year 2007 to 70.16 percent in fiscal year 2012, a decrease of 22.62 percentage points, or 24.4 percent. Likewise, unfunded liabilities increased from under $250 million in fiscal year 2007 to more than $1.4 billion in fiscal year 2012.[20]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[21]

The table below lists the Standard and Poor's credit rating for Vermont from 2001 to 2012 (grades from surrounding states are provided for additional context).[21]

S&P credit ratings from 2001 to 2012
Vermont Maine Massachusetts New Hampshire Rhode Island
2012 AA+ AA AA+ AA AA
2011 AA+ AA AA AA AA
2010 AA+ AA AA AA AA
2009 AA+ AA AA AA AA
2008 AA+ AA AA AA AA
2007 AA+ AA AA AA AA
2006 AA+ AA- AA AA AA
2005 AA+ AA- AA AA AA
2004 AA+ AA AA- AA AA-
2003 AA+ AA+ AA- AA AA-
2002 AA+ AA+ AA- AA+ AA-
2001 AA+ AA+ AA- AA+ AA-

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[22]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[22]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Vermont 34.79% $1,904,382,000 18
Maine 36.50% $2,883,526,000 10
Massachusetts 28.81% $12,920,153,000 36
New Hampshire 29.00% $1,693,289,000 34
Rhode Island 33.96% $2,310,656,000 23

Stimulus

Vermont received $876.7 million in federal stimulus funding between February 2009 and June 2013.[23]

Budget transparency

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Vermont, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[24][25]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Vermont tied for 20th in the nation with 12 other states, earning five out of eight possible points.[25]

Vermont - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle Y
600px-Yes check.png
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast
{{{1}}}
Nonpartisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations N
600px-Red x.png
TOTAL 5

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[25]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[26] According to the report, Vermont received a grade of A- and a numerical score of 90, indicating that Vermont was "leading" in terms of transparency regarding state spending.[26]

Accounting principles

See also: Vermont government accounting principles

The Vermont State Auditor] is one of five constitutional officers in Vermont. The State's Auditor's Office provides an independent and objective assessment of Vermont's governmental operations, publishing its audit reports online. Thomas M. Salmon was elected Vermont State Auditor in 2006 and he was re-elected in 2010.[27]

Contact information

Vermont Department of Finance and Management
109 State Street
Montpelier, Vermont 05609
Telephone: 802-828-2376

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. 14.0 14.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  15. 15.0 15.1 WCAX.com, "Gov. Shumlin signs Vt. budget bill," May 28, 2013
  16. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  18. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  19. Pew Center on the States, "Widening Gap Update: Vermont," June 18, 2012
  20. Office of the State Treasurer, "2012 Annual Report," accessed November 20, 2013
  21. 21.0 21.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  22. 22.0 22.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  23. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  24. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  25. 25.0 25.1 25.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  26. 26.0 26.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  27. Vermont State Auditor, "Home page," accessed November 16, 2009