State Budget – Last week was capped off early Friday evening (3/25) with
a 95 to 34 vote in the House (Wilson voting yes) to approve the FY 12 state budget.
The $4.7 billion spending blueprint for the next fiscal year represents a 3.6%
decrease in expenditures over the current year. The House Appropriations Committee
worked long and hard to close an estimated $176 million budget gap by largely using
a mix of spending cuts ($83 million) one-time revenues ($60 million) and new tax
income ($24 million net). The new tax revenue incorporated into the package consists
of additional so-called health care-related “provider taxes” that are used to
leverage additional Federal Medicaid funding. For every $1 raised in these taxes,
the state receives $1.60 in Federal aid. For FY 12, under the House plan, additional
provider taxes will come from a 27 cent tax increase on a pack of cigarettes,
increased taxes on hospitals/nursing homes and a new .08% insurance claims assessment.
(Earlier in the week, the House rejected an effort to bolster state coffers through
an income tax surcharge on wealthier Vermonters.) The Committee was able to salvage
Catamount Health and partially restored some of the human service reductions (mental
health, elderly services, developmentally disabled, student assistance program)
sought by the Shumlin Administration. The Committee’s proposal survived a number
of amendment efforts that came from both ends of the political spectrum; some
wanted more spending, while others wanted less. The budget is now off to the Senate
for review and consideration. FY 12 represents the fourth fiscal year in row that
Vermont has had to cope with a very difficult financial picture. Regretfully, given
the almost certain reduction in Federal funding that lies ahead, the fiscal landscape
in FY 13 will probably prove be even more dismal.

Health Care Reform – On Thursday afternoon (3/24), the House gave its
final approval to H. 202 by a vote of 92 to 49 (Wilson voting yes). This bill,
the subject of substantial analysis and debate this year, is a comprehensive and
complex treatise that calls for an overhaul of Vermont’s health care system. In
the short-term, this legislation seeks to position the State to comply with the
new Federal health care law, and sets the stage for the implementation of a
uniform/universal care system (Green Mountain Care) in 2014. Supporters of the
legislation viewed H. 202 as the only vehicle on the horizon that had a chance to
transition our current health care morass into a system that better ensures cost
containment and affordable health coverage for all Vermonters. Opponents, needless
to say, are skeptical at best. Although there’s little doubt that H. 202 sets the
stage for a possible single-payer system, this type of retrofit cannot be launched
until a standard benefits plan is devised, costs are determined, a financing plan
and program appropriations are approved by the Legislature and waivers are obtained
from the Federal government. Depending upon when/if these hurdles are overcome, the
new system will be up and running sometime between 2014 and never. One last note
on this topic – It’s important to remember that even if we move to single-payer,
Medicare coverage for seniors cannot be diminished through future State action.

Next week – the capital bill and transportation bill (among a host of
other things).

– Jeff Wilson, Manchester, Vermont, State Representative