2012 Legislative Update: Week 2 (1/10 – 1/13)

by Jeff Wilson

Budget Address – The big event in Montpelier last week was the presentation by the Governor of his FY 13 Budget Message to a joint session of the General Assembly. In his Thursday (1/12) afternoon speech, Governor Shumlin stressed parallel themes for his Administration; a two-pronged approach to aggressively tackle Irene restoration, while at the same time, to continue the Administration’s focus on economic development and job creation. The General Fund portion of the total spending package he outlined is up by roughly $66 million, or 5.3% over the current year. However, the Administration was quick to note that about $20 million, or almost a third of this increase, is driven by reductions in Federal assistance. Under the fiscal blueprint put forward, the budget will be brought into balance through a combination of spending adjustments, the use of so-called “one time” monies and a projected $70 million increase in revenues (“without raising broad base taxes”). As we have come to realize over the past five years, revenue projections can be a tricky business, since they are closely tied to how well the “experts” can crystal ball future economic activity. The first test of the Governor’s revenue growth number will come on January 18th, when the economists for the Administration and Legislature present their new consensus income projections to the Emergency Board. If they see softer revenue growth down the road, the Shumlin plan will need to be adjusted as it wends its way through the House and Senate.

Some of the specific budget highlights include:

  • $8 million to create a new creative economy and innovation program at UVM and within the state college system;
  • A significant increase in state transportation aid to cities and towns;
  • $3.1 million to beef-up the State’s budget stabilization fund;
  • A $1.5 million increase to put Fish and Wildlife funding on a sounder track;
  • A proposal to redirect $18 million in capital funding to help address the Irene-related destruction at the Waterbury Office Complex and the State Hospital;
  • Fully funding the Department of Tourism’s marketing efforts;
  • A $6 million replenishment in the Tobacco Fund to finance anti-tobacco use programs;
  • A suggestion (I guess you’d call) that supervisory unions be reorganized and consolidated.

IrI Irene Legislation – Just before the Governor’s budget message on Thursday, the House passed its second legislative effort thus far this year to assist cities and towns hard hit by the spring floods and Irene. In a nutshell, the approved bill enables the State Treasurer to defer the due date of education taxes to be transmitted to the State from storm impacted municipalities – from the normal statutory due date of Dec 1, 2011, to February 28, 2012. By postponing this bill, and absolving affected municipalities from any delinquency penalties, cities and towns hammered by Irene will be given a much-needed cash flow breather. Eleven towns, all from southern Vermont, have chosen to take advantage of this deferment option, to the tune of $7.1 million.

– Jeff Wilson, Manchester, Vermont, State Representative

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