Democratic lawmakers have reached agreement on a state budget that appears to have the support of Republican Gov. Phil Scott. The plan reserves more than $100 million in anticipated revenue surpluses to deal with potential cuts to federal spending by Congress.
Budget writers typically use surpluses in state revenues to fund a laundry list of line items that didn鈥檛 make it into the base budget. This year, however, Washington County Sen. Andrew Perchlik said the anticipated surplus will instead serve as a contingency against potential cuts in federal spending.
鈥淭his budget holds back a lot of money for a pending crisis if the cuts are as bad as some of the congressional Republicans want them to be,鈥� said Perchlik, the Democratic chair of the Senate Committee on Appropriations.
Federal lawmakers are working on a in Washington, D.C. that, according to the nonpartisan Congressional Budget Office, would see .
That reconciliation bill, according to a congressional staffer for Sen. Peter Welch, would also defund Medicaid reimbursement for reproductive care, which would have the effect of reducing revenues at Planned Parenthood by more than 30%.
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Congress isn鈥檛 expected to approve that reconciliation legislation until July. And it鈥檚 unclear which proposed cuts will make it into law. But Middlebury Rep. Robin Scheu, the Democratic chair of the House Committee on Appropriations, said the proposed federal spending bill represents the sort of cuts that lawmakers might want to use state funds to at least partially offset.
鈥淲e simply don鈥檛 have the money to backfill everything 鈥� but we want to be as flexible as we can about what we鈥檙e doing,鈥� Scheu said. 鈥淲hen we put this budget together we really tried to build in flexibility, and we had sort of top of mind that any number of things could happen from Washington.鈥�
Surplus revenues aren鈥檛 the only pool of reserves from which lawmakers say they鈥檒l be able to draw. Vermont has a 鈥渟tabilization reserve鈥� with $118 million, and a so-called "Rainy Day Fund鈥� that has another $100 million or so.
Scheu said the desire to retain fiscal capacity, pending more information from Congress, meant less money for some of the Legislature鈥檚 key spending priorities on housing, health care and food security. But she said the state faces a more precarious financial situation than at any time since the beginning of the coronavirus pandemic.
鈥淲e have sort of this double whammy happening because the federal funds from COVID are basically gone 鈥� so this year was going to be a different year anyway,鈥� she said. 鈥淎nd now we have what鈥檚 going on in Washington 鈥� which could cut things even further.鈥�
Administration Secretary Sarah Clark said the Legislature made some concessions during the later stages of the budget negotiation process 鈥� including lowering overall base spending to $19 million more than what Scott proposed. And she said the governor will likely agree to the package, pending a full review of all its provisions.
Clark said the governor鈥檚 call for fiscal restraint has been based in part on the potential need to respond to federal cuts.
鈥淎ssuming we close the year in a place that we鈥檙e anticipating,鈥� Clark said, 鈥渨e believe there should be funds available for federal action, if it comes to be.鈥�
