Vermonters need a more transparent budget process

The need for a more open and transparent budget process became clear last week with the news that the state is on the hook for an extra $18 million in Medicaid payments this year. The payments weren’t factored in last spring when the administration and the Legislature put together the state budget, so now policymakers are scrambling to come up with the money.

That the Medicaid payments were overlooked shouldn’t surprise us since the annual budget process focuses on revenue rather than the state’s obligations to its citizens. The budget process works like this: revenue experts agree on how much revenue the state will receive in the coming year, the governor proposes a budget based on that amount, and the Legislature adopts this budget with some changes.

The problem with this process is that we never see the actual cost of funding the services that the state has already committed itself to provide to Vermonters. There is no conversation about whether the budget is adequate to meet the state’s obligations. Instead, the focus is on how much money is available, how it should be allocated, and which services will be under-funded.

Legislation enacted in 2012 requires the administration to develop and publish what’s called a current services budget, which the law defines as “an estimate of what the current level of services is projected to cost in the next fiscal year.”

Vermont does this with the Transportation Fund. There are projections of the cost of properly maintaining roads and bridges and the rest of the transportation system. (Those projections show future funding will be inadequate.)

We need similar projections for the General Fund, which covers things like health care, child care, education, environmental protection, and public safety.

What the administration has published in recent years as a current services budget doesn’t meet the requirements of the law. It simply lists some of the factors considered in the development of the governor’s budget. If the governor released a current services budget with detailed information about how much each agency believes it needs to meet the current law, policymakers would be able to better determine the impact of their budget choices. They would have received notice, for example, that Medicaid providers are scheduled to receive an extra payment this fiscal year.

A current services budget establishes a baseline. Without it, legislators and administration officials really can’t know the consequences of the tough choices that we hear them talk about when they decide to decrease or level fund a state service.

We need a more open and honest conversation about how the state budget can help us build a Vermont economy that gives everyone in the state the opportunity to prosper. The governor can take a good step in that direction by publishing a current services budget in January, as the law requires.