Photo courtesy Fred Bird
by Rep. Jim Harrison (Rutland-11)
It was widely known that putting together the next state budget was going to be tight. All the extra federal money that came to Vermont during the pandemic, has previously been appropriated and state revenue growth has slowed. The Governor’s proposed budget for Fiscal Year 2025 (beginning July 1, 2024) had an overall increase in ongoing spending of approximately 3.4%, which is less than what wages and benefits are increasing for state employees.
In outlining his budget plan earlier this session, Governor Scott said we must live within our means and resist the temptation by some to raise taxes. If seniors on social security are expected to get by with the 3.2% cost of living adjustment this year, our state government should be able to do the same.
One of the reductions suggested in the administration’s proposed budget is to close the fish hatchery in Salisbury. The planned closing of the historic hatchery, which produces about five million trout eggs annually for other hatcheries, has raised the ire of sportsmen groups around the state. State officials indicate keeping the facility open beyond 2027 could result in a costly upgrade ($10 million) to install new treatment measures to meet the state’s water quality standards. Members of the Appropriations Committee have probably received more emails concerning this budget item than any other thus far this session, all of which oppose the closing. Most of the messages close with this note, “With all the money being spent elsewhere, we should support this facility.” Of course, when a cut to another program is proposed, another group says, “not so fast.” Difficult choices are ahead.
To further add to the budget pressures:
- the state has millions in flood related costs from last summer
- over $70 million in requests from last week’s public hearing on the budget
- a proposal for nearly $200 million annually to build more affordable housing
- And before we even begin crafting the House version of the FY25 budget, the legislature developed a $15 million shortfall through extra expenditures in the current year budget adjustment bill. To say that the next few weeks will be challenging is an understatement. On Friday, our Appropriations Chair asked committee members to look at our respective budget areas over the weekend and come up with some proposed reductions.
More difficult choices will also face school boards and voters in the coming weeks as property taxes are expected to dramatically increase, even for those that have received tax credits based on income in the past. The Governor has signed into law, H.850, which removes the cap on homestead property tax rates many believed led to higher education budgets and gives districts more time to prepare and adopt school budgets this year.
Upon signing the legislation, Scott said, “But to be clear, this bill does not solve our property tax problem. These changes will only reduce rates if school boards adjust their budgets accordingly…” Key lawmakers, including Senate leader Phil Baruth, acknowledged that the legislature needs to come up with “groundbreaking” ways to contain pre-K to12 education costs.
Will it happen this year is an open question.
Other issues of interest:
- A significant new and controversial renewable energy bill is expected to be voted on by the full House in the coming week. The legislation, H.289, requires most of the state’s electricity to come from 100% renewable sources by 2030, with an emphasis on locally based sources, such as solar and wind. Current law requires 75% renewable by 2032. The estimated additional costs to ratepayers are between $400 million and $1.0 billion over the next 11 years according to the nonpartisan Joint Fiscal Office of the legislature. The Department of Public Service offered an alternative plan to achieve 100% at a lower cost but it was opposed by the groups advocating for local energy providers. Under the bill, additional power needs will not come from large hydro and often lower cost sources, such as Hydro Quebec.
- A bill, S.18, to ban flavored tobacco, including menthol, was advanced by the House Ways & Means Committee on Friday on a 7-5 vote after it was amended to postpone implementation for another year. The motivation for the delay is to avoid an estimated $10-15 million deficit in the FY25 budget due to lower tax receipts. The amended bill puts off the decisions on how to replace the revenue or reduce expenses until next year.
- Legislation introduced with a lot of fanfare by House Leadership to expand Medicaid to more Vermonters, H.721, may be pared back to be a study on cost estimates for various components of the bill. There is a growing awareness among various committees that any new spending will require new taxes.
- The Senate Judiciary Committee advanced to the full Senate, S.209, which prohibits unserialized firearms (ghost guns).
- The Senate Health & Welfare Committee is taking up legislation, S.187, which would allow students to have and apply sunscreen at school with the permission of a parent or guardian. Evidently under current FDA regulations, a doctor’s note may be required to students to use sunscreen at school.