5 Things to Look for in the Governor’s 2017 Budget

Governor Shumlin will present his fiscal 2017 budget to the Legislature on Thursday, January 21 at 2:00 PM. Here are a few of the things we’ll be looking for.

1. How well does the state budget meet the needs of Vermonters and advance their economic well-being?

The purpose of government spending is to better the circumstances of the state’s residents. Vermont statute (32 VSA § 306a) defines the purpose of the state budget. It says the budget should “address the needs of the people of Vermont in a way that advances human dignity and equity,” and recognize “every person’s need for health, housing, dignified work, education, food, social security, and a healthy environment.”

2. Has the governor included a detailed current services budget and what does it show?

The Shumlin administration has agreed to include a detailed current services budget with its fiscal 2017 budget proposal. A current services budget is the administration’s best estimate of what it would cost state government to deliver all of the services required by law and agency policy next year. The administration has been required by law to publish a current services budget since fiscal 2014, but has not yet provided the line-by-line detail that makes a current services budget useful. A detailed current services budget would provide a more accurate reckoning of the state’s obligations to Vermonters and show legislators and the public which public services might be underfunded.

3. Has the governor addressed the budget’s increasing health care costs? If so, how?

More Vermonters have health insurance than ever before. That’s the good news. The bad news is that health care costs are still growing, though more slowly than in the past and that means continuing pressure on the state budget. Health care costs account for about one-third of state spending. And, both the Joint Fiscal Office and the administration have said that greater-than-expected cost increases from Medicaid program expansion are creating additional budget pressure. Last year, the governor proposed a .7 percent payroll tax to address this growing budget problem, but the Legislature rejected it. The administration has indicated that it does not plan to ask again. Without new revenue, however, health care costs will displace even more of the state services that Vermonters need.

4. What is the governor doing to help single mothers with young children—the group with the highest poverty rate?

More than 50 percent of Vermont single mothers with children under five years old lived in poverty in 2014. Reach Up is a state program designed to help families like these, to provide for the children’s basic needs and to move the adults into the workforce. But Reach Up recipients are getting less than half of what the state calculates they need to live on. How does this meet the state’s statutory commitment “to improve the well-being of children by providing for their immediate basic needs, including food, housing, and clothing?”

5. Is the governor proposing to close the gap between those at the top and typical Vermont households who have seen their real incomes shrink for the past decade?

In recent economic expansions, the most well off have reaped a disproportionate share of the benefits of income growth. State budget and tax policies, as well as minimum wage rates, are levers that the state can pull to correct this unfair and burdensome trend that is hurting many Vermonters. In his State of the State address, the governor highlighted increases in Vermont’s minimum wage, which is still far from the income that a family needs to live.