Difference between revisions of "Vermont state budget"

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==Budget background==
 
==Budget background==
Vermont's fiscal year begins July 1 and ends June 30 of the following year. In September and October instructions are distributed to each agency and department, with a budget allocation for the coming fiscal year. By December the Governor reviews agency requests, past expenditures and revenue data before ultimately compiling budget recommendations for the upcoming fiscal year. In January, when the [[Vermont_Legislature|Legislature]] convenes, the Governor presents the budget proposals with a formal address to a joint meeting of all House and [[Vermont_Senate|Senate]] members. Once both the [[Vermont_House_of_Representatives|House]] and the Senate approve all of the appropriations and make any necessary changes the Governor makes the final approval before the new budget bill is accepted. Should any changes be necessary throughout the fiscal year the Budget Adjustment Act allows for the Governor to submit proposed changes. The House and Senate pass the final version of the Budget Adjustment Bill and the bill is forwarded to the Governor for final approval.<ref>[http://finance.vermont.gov/state_budget/ ''State of Vermont'',"State budget process," retrieved March 31,2009]</ref>
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Vermont's fiscal year begins July 1 and ends June 30 of the following year. In September and October instructions are distributed to each agency and department, with a budget allocation for the coming fiscal year. By December the Governor reviews agency requests, past expenditures and revenue data before ultimately compiling budget recommendations for the upcoming fiscal year. In January, when the [[Vermont_Legislature|Legislature]] convenes, the Governor presents the budget proposals with a formal address to a joint meeting of all House and [[Vermont_Senate|Senate]] members. Once both the [[Vermont_House_of_Representatives|House]] and the Senate approve all of the appropriations and make any necessary changes the Governor makes the final approval before the new budget bill is accepted. Should any changes be necessary throughout the fiscal year the Budget Adjustment Act allows for the Governor to submit proposed changes. The House and Senate pass the final version of the Budget Adjustment Bill and the bill is forwarded to the Governor for final approval.<ref>[http://finance.vermont.gov/state_budget/ ''State of Vermont'',"State budget process," accessed March 31,2009]</ref>
  
 
Public hearings are held throughout the budget process, dealing with particular programs, but not according to a set schedule. The state constitution prescribes a biennial legislature; in practice, legislature meets annually, in regular and adjourned sessions.<ref>[http://www.nasbo.org/Publications/PDFs/2008%20Budget%20Processes%20in%20the%20States.pdf ''National Association of Budget Officers'', "Budget Processes in the States," 2008]</ref>
 
Public hearings are held throughout the budget process, dealing with particular programs, but not according to a set schedule. The state constitution prescribes a biennial legislature; in practice, legislature meets annually, in regular and adjourned sessions.<ref>[http://www.nasbo.org/Publications/PDFs/2008%20Budget%20Processes%20in%20the%20States.pdf ''National Association of Budget Officers'', "Budget Processes in the States," 2008]</ref>
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==Additional reading==
 
==Additional reading==
*[http://www.welch.house.gov/index.php?option=com_content&task=view&id=429&itemid=74 ''Congressman Peter Welch'',"User's Guide to Economic Recovery Resources," retrieved March 30,2009]
+
*[http://www.welch.house.gov/index.php?option=com_content&task=view&id=429&itemid=74 ''Congressman Peter Welch'',"User's Guide to Economic Recovery Resources," accessed March 30,2009]
 
*[http://governor.vermont.gov/speeches/Inaugural_2009.pdf ''Gov. Douglas'',"Inaugural Address of Governor James H. Douglas," January 8,2009]
 
*[http://governor.vermont.gov/speeches/Inaugural_2009.pdf ''Gov. Douglas'',"Inaugural Address of Governor James H. Douglas," January 8,2009]
  

Revision as of 08:02, 16 April 2014

Vermont state budget

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Budget calendar:  Annual
Fiscal year:  2014
Other state budgets
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Vermont is the only state without a balance budget requirement. In Dec. 2011, Governor Peter Shumlin's administration proposed $25.5 million in adjustments to the General Fund spending plan that lawmakers approved when they passed the $4.8 billion budget in the spring of 2011, with $24.8 million of the new costs attributed to Tropical Storm Irene.[1]

The state operates on an annual budget cycle.[2] The budget year begins on July 1.

As of FY 2012Vermont had a total state debt of approximately $$5,846,189,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap.[3] The FY2013 state debt is down from the prior year's total of approximately $6,043,582,000.[4]Vermont's total state debt per capita is $9,332.53.[5]

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Vermont 29.24% (#27) 31.61% (#31) 35.73% (#29) 36.17% (#28)
  • Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.[6][7]

Fiscal Year 2013 State Budget

The state face a $50 million gap between revenues and expenditures, one of the smaller gaps in the past few years. The state has set aside $13 million in the Agency of Human Services caseload reserve, $3.9 million for revenue shortfalls and $1.9 million for federal cuts. There is also $3 million in unanticipated revenue coming from the attorney general’s settlement with big banks.[8]

The budget bill as enacted can be found online.[9]

Legislative Proposed Budget

The House passed a $5.01 billion state budget with a vote of 99-41.[10] The budget spends about $124 million on recovery from Tropical Storm Irene.[11] Gov. Peter Shumlin said he believed the House budget adhered to the priorities of his proposed budget.[10]

The total budget spends 6.4 percent more than the FY2012 state budget.[12] The general fund accounts for $1.3 billion of the overall spending plan and under the House budget general fund spending would increase 5.8 percent from FY2012.[12] The transportation budget, which is up by more than $103 million, is the highest dollar increase.[11]

New spending in the budget includes:[12]

  • $20.5 million to make up for a cut in federal support for Medicaid;
  • $14 million to cover the increasing costs of government employee retirement programs;
  • $13.6 million in pay increases for current state employees;
  • $6 million to make up for dwindling payments under the state's share of a settlement reached between states and the tobacco industry 15 years ago.

Surplus

The House's budget plan takes a new approach to a state surplus, should there be one, and devotes half of any surplus to the state education fund to help reduce property taxes, and a quarter each to a newly established rainy day fund and to money set aside to offset federal cuts.[12][11]

Revenue

Prior to considering the budget bill, the House had already passed revenue-generating legislation — namely a fee bill for the Department of Motor Vehicles that increases rates for driver’s licenses and vehicle registrations, a one penny increase to the statewide property tax and a provision that would push surplus funds toward the General Fund transfer to the Education Fund to make up for $27.5 million in “rebasing” that will have a 3-cent impact on local property taxpayers.

Governor's Proposed Budget

The Executive budget recommendations can be found online.[13]

Fiscal Year 2012 State Budget

A mortgage foreclosure settlement between banks and states was announced in Feb. 2012, and Vermont plans to use $2.4 million from the settlement to help balance its budget.[14]

Gov. Peter Shumlin announced when he took office in January 2011 that he would save $12 million in personnel costs, but he fell short of thatgoal by about $2.6 million, and Finance and Management Commissioner James Reardon said that shortfall will need to be filled in the FY2013 budget.[15]

Fiscal Year 2012 State Budget

See also Archived Vermont state budgets

Vermont faced a FY2012 budget deficit that could reach $176 million.[16] Gov. Peter Shumlin called for an immediate state government hiring freeze and said that requests to fill vacant positions must be cleared through Secretary of Administration Jeb Spaulding.[17] He said another $2 million could be saved from the state employees’ retirement plan through "benefit recalibration," requiring a reduction in benefits coupled with increased contributions.[17] Shumlin said he will also seek a 2% savings from the state’s personal services contracts.[17]

In Dec. 2011, Governor Peter Shumlin's administration proposed $25.5 million in adjustments to the General Fund spending plan that lawmakers approved in the spring of 2011, with $24.8 million of the new costs attributed to Tropical Storm Irene.[18] The $25 million in costs includes $690,000 for supplies and equipment used by National Guard personnel in responding to the emergency to $1.75 million for cleaning up spills of petroleum products caused by flooding. The state did not plan to raise taxes to cover the increased spending.[19]

Legislative Proposed Budget

The bipartisan House Appropriations Committee unanimously approved its $4.8 billion budget bill on March 21, 2011. The bill is based on the assumption that the state will not have to pay the federal government $4.1 million in unemployment insurance interest due because President Barack Obama had proposed giving states a temporary break to help them weather the continuing economic downturn.[20][21]

The House’s budget follows much of Gov. Shumlin's proposed budget, but does not mirror it exactly. For example, the Shumlin proposed budget would svae $5 million by transforming Catamount Health into a wholly state program, but the House committee disagreed and instead to adopted a savings plan proposed by insurers, hospitals and doctors.[21]

Governor's Proposed Budget

On Jan. 25, 2011, Gov. Shumlin presented his proposed FY2012 budget, with $1.2 billion in general fund spending, which is a $25 million reduction from FY2011 general fund spending.[16]

Cuts

The budget makes $83 million in cuts to the general fund, including funding cuts to mental health agencies, programs for children and money for adoptive children who don't qualify for Medicaid.[16]

Revenues

The budget does not include new taxes, or increasing the sales tax and income tax and it also does not dip into a $60 million "rainy day fund" for relief.[16]

the budget plan generates $36 million in addit-fish-ional federal funding through new or raised state assessments on hospitals, nursing homes, insurers and dentists by raising the "provider tax" on hospitals from 5.5 % to 6%, with the proceeds then used to leverage more federal funding.[16]

Budget transparency

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
None n/a n/a n/a n/a n/a n/a

Vermont currently has no statewide, official spending database online. However, the Public Assets Institute and the Ethan Allen Institute launched Vermont Transparency, which discloses information about state spending, state revenues, municipal spending, federal contracts, education finance, school spending and federal stimulus funds.

See also: Evaluation of Vermont state website

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 measures state transparency as of September 2011 using indicators from a range of organizations. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents 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.[22][23]

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[24][25]


Prior State Budgets

See also Archived Vermont state budgets

In 2009 Vermont faced shortfalls of $28 million for FY 2010 based on the July 16, 2009 consensus revenue forecast. Gov. Jim Douglas proposed August 5, 2009 the $28 million needed in rescissions for the current fiscal year to keep the budget balanced,[26] accepted by the Vermont State Legislature's Joint Fiscal Committee on August 18, 2009.[27]

Vermont's General Fund FY 2010 revenue is below FY 2005.[28] Gov. Douglas laid off 25 state workers and eliminated 50 vacant positions to hit the $7.4 million target as part of the $28 million in reductions. Gov. Douglas has been criticized for not accepting the Vermont State Employees Association's offer of 4 days of furloughs and give up 3 paid holidays to prevent this year's layoffs. The union also offered permanent elimination of a wellness program, dental coverage and tuition reimbursement to reach the $7.4 million figure. Gov. Douglas said he wanted permanent not temporary labor savings to explain his rejection of the union's offer.[29] In December 2009, the state and the union agreed to a 3 percent pay cut for state employees as well as a pay freeze until 2012.[30]

Vermont's state revenues for the period as of October 2009, 4 months into FY 2010, were $5.95 million, 1.72% above target as announced November 10, 2009. The month of October was only 0.16% down from estimates. Personal Income Tax was +5.67%, Sales Tax +0.71%, Room and Meal Taxes were 4.38% in the positive with the 4th major revenue category of Corporate Tax negative 18.81% for the month. Compared to FY 2009 Personal Income Tax was down 11.75%, Sales Tax declined 4.48%%, Room and Meal Taxes were negative 1.20%, and Corporate Tax was up 11.92%.[31]

The Vermont Emergency Board in light of the current economic turmoil decided to meet quarterly instead of twice a year. They were told at their meeting on November 12, 2009 that FY 2010's most recent revenue forecast is up $1.6 million for the General Fund of more than $1 billion, but were warned unemployment in the state will continue to rise. The Emergency Board is composed of legislative money committee chairs and Gov. Jim Douglas.[32]

FY 2011 budget instructions issued to Vermont state agencies on October 2, 2009 told agencies to prepare their budgets at 8% below FY 2010's levels (after the August 18, 2009 rescissions).[33]

Vermont Fiscal Year General Fund Revenues Comparison:[34]

2004 2005 2006 2007 2008 2009 2010 2011 (est.)
$967 million $1.035 billion $1.112 billion $1.151 billion $1.200 billion $1.103 billion $1.025 billion $1.084 billion

Actions taken in FY 2009 and 2010 to balance the budget include:[35]

  • The number of active state employees today has been reduced from a high in July 2008 of 8,383 to an estimated 7,960 as of July 2009.
  • Another 90 positions are likely to be eliminated as the result of the retirement incentive. At that point, the number of State employees in Vermont will reach 2003 levels, with more reductions possible.
  • Tax changes included: Reducing the capital gains exemption to a flat $5,000 (with some exceptions), eliminating the state and local tax deduction, lowering tax rates, cigarette tax increases, an estate tax exemption set at $2 million, and a tax amnesty program.
  • The current deficit projection for Vermont is:
    • FY 2011 ($ 82 million) = 6.4% shortfall
    • FY 2012 ($155 million) = 11.6% shortfall
    • FY 2013 ($127 million) = 9.2% shortfall
  • Total ‘Real’ (once duplications are accounted for) FY10 Budget = $4.6 Billion, including ARRA, which breaks down by funding sources as follows:
    • Federal Funds $ 1.44 B 31%
    • Fed. ARRA Funds $ 373 M 8%
    • General Fund $ 1.09 B 23%
    • Education Fund $ 1.07 B 23%
    • Transportation Fund $ 215 M 5%
    • Special Funds $ 450 M 10%

Budget background

Vermont's fiscal year begins July 1 and ends June 30 of the following year. In September and October instructions are distributed to each agency and department, with a budget allocation for the coming fiscal year. By December the Governor reviews agency requests, past expenditures and revenue data before ultimately compiling budget recommendations for the upcoming fiscal year. In January, when the Legislature convenes, the Governor presents the budget proposals with a formal address to a joint meeting of all House and Senate members. Once both the House and the Senate approve all of the appropriations and make any necessary changes the Governor makes the final approval before the new budget bill is accepted. Should any changes be necessary throughout the fiscal year the Budget Adjustment Act allows for the Governor to submit proposed changes. The House and Senate pass the final version of the Budget Adjustment Bill and the bill is forwarded to the Governor for final approval.[36]

Public hearings are held throughout the budget process, dealing with particular programs, but not according to a set schedule. The state constitution prescribes a biennial legislature; in practice, legislature meets annually, in regular and adjourned sessions.[37]

Accounting principles

See Also: Vermont government accounting principles

The Office of Vermont State Auditor] is one of five constitutional officers in Vermont. The 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.[38][39]


Credit Ratings

Credit Rating Fitch Moody's S&P
Vermont AA+ Aaa AA+[40]

Stimulus

Vermont received $876.7 million in federal stimulus funding between February 2009 and June 2013.[41]

Public Employees

See Also: Vermont public employee salaries and Vermont public pensions

According to 2011 Census data, the state of Vermont employed a total of 15,846 people.[42] Of those employees, 13,236 were full-time employees receiving a net pay of $61.0 million per month and 2,610 were part-time employees paid $5.6 million per month.[42]

External links

Additional reading


References

  1. The Burlington Free Press "Irene rains on Vermont state budget" Dec. 12, 2011
  2. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  3. Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  4. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  5. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  6. US Census Federal Aid to State and Local Governments
  7. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  8. "Midway point: Vermont House and Senate poised for April 27 adjournment" March 12, 2012
  9. [1]
  10. 10.0 10.1 The Bennington Banner "House passes budget 'Big Bill'; on to the Senate" March 26, 2012
  11. 11.0 11.1 11.2 Businessweek "Vt. legislative leaders outline $5 billion budget" March 2, 2012
  12. 12.0 12.1 12.2 12.3 CBSNews.com "Vt. legislative leaders outline $5 billion budget" March 22, 2012
  13. FY 2013 Executive Budget Recommendations
  14. CBS MoneyWatch "States diverting foreclosure settlement funds" March 14, 2012
  15. CBSNews.com "Vt. gov. wants $25M more to cover Irene damages" Dec. 13, 2011
  16. 16.0 16.1 16.2 16.3 16.4 Bloomberg "Vt.'s new governor presents budget plan" Jan. 26, 2011
  17. 17.0 17.1 17.2 The Bennington Banner "Shumlin aims at saving $12M" Jan. 7, 2011
  18. The Burlington Free Press "Irene rains on Vermont state budget" Dec. 12, 2011
  19. CBSNews.com "Vt. gov. wants $25M more to cover Irene damages" Dec. 13, 2011
  20. FY 2012 Budget Bill
  21. 21.0 21.1 The Burlington Free Press "House committee sends out $4.8 billion state budget" March 22, 2011
  22. Institute of Government and Public Affairs
  23. University of Illinois Transparency Profile for Vermont
  24. [ University of Illinois 50 State Transparency Comparison
  25. University of Illinois State Transparency Profiles
  26. Gov. Douglas' Office, "2010 Rescission Proposal to JFC," August 5, 2009
  27. Joint Fiscal Committee, "Committee Modifications and Comments," August 18, 2009
  28. Vermont Legislative Fiscal Office, "VT Revenue and Budget Picture," September 18, 2009
  29. Burlington Free Press, "Pressure grows on Vermont budget," October 29, 2009
  30. Cite error: Invalid <ref> tag; no text was provided for refs named waterbury
  31. State of Vermont Agency of Administration, "2009 Revenue Results," November 10, 2009
  32. WPTZ, "Vt. Emergency Board To Get Revenue Forecast: Unemployment Expected To Rise Through Next Year," November 12, 2009
  33. Department of Finance & Management, Budget & Management Division, "FY 2011 Budget Instructions," October 2, 2009
  34. Vermont Legislative Fiscal Office, "VT Revenue and Budget Picture," September 18, 2009
  35. Vermont Legislative Fiscal Office, "VT Revenue and Budget Picture," September 18, 2009
  36. State of Vermont,"State budget process," accessed March 31,2009
  37. National Association of Budget Officers, "Budget Processes in the States," 2008
  38. Vermont State Auditor
  39. Vermont State Auditor Web site, retrieved November 16, 2009
  40. Pew Stateline Infographic on State Credit Ratings. Accessed September 18, 2013
  41. Recovery, "Stimulus Spending by State"
  42. 42.0 42.1 2011 Vermont Public Employment U.S. Census Data