Vermont state budget

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Vermont is expected to face an estimated $150 million budget shortfall for FY 2011. In January 2010 lawmakers announced that they plan to impose a 5% cut on their own paychecks for the next two sessions. Gov. James Douglas is expected to announce a spending plan on January 19, 2010.^[1]

In 2009 Vermont faced shortfalls of $28 million for FY 2010 based on the July 16, 2009 consensus revenue forecast. Gov. Jim Douglas proposed August 5, 2009 the $28 million needed in rescissions for the current fiscal year to keep the budget balanced,^[2] accepted by the Vermont State Legislature's Joint Fiscal Committee on August 18, 2009.^[3]

Vermont's General Fund FY 2010 revenue is below FY 2005.^[4] Gov. Douglas laid off 25 state workers and eliminated 50 vacant positions to hit the $7.4 million target as part of the $28 million in reductions. Gov. Douglas has been criticized for not accepting the Vermont State Employees Association's offer of 4 days of furloughs and give up 3 paid holidays to prevent this year's layoffs. The union also offered permanent elimination of a wellness program, dental coverage and tuition reimbursement to reach the $7.4 million figure. Gov. Douglas said he wanted permanent not temporary labor savings to explain his rejection of the union's offer.^[5]

Vermont's state revenues for the period as of October 2009, 4 months into FY 2010, were $5.95 million, 1.72% above target as announced November 10, 2009. The month of October was only 0.16% down from estimates. Personal Income Tax was +5.67%, Sales Tax +0.71%, Room and Meal Taxes were 4.38% in the positive with the 4th major revenue category of Corporate Tax negative 18.81% for the month. Compared to FY 2009 Personal Income Tax was down 11.75%, Sales Tax declined 4.48%%, Room and Meal Taxes were negative 1.20%, and Corporate Tax was up 11.92%.^[6]

The Vermont Emergency Board in light of the current economic turmoil decided to meet quarterly instead of twice a year. They were told at their meeting on November 12, 2009 that FY 2010's most recent revenue forecast is up $1.6 million for the General Fund of more than $1 billion, but were warned unemployment in the state will continue to rise. The Emergency Board is composed of legislative money committee chairs and Gov. Jim Douglas.^[7]

FY 2011 budget instructions issued to Vermont state agencies on October 2, 2009 told agencies to prepare their budgets at 8% below FY 2010's levels (after the August 18, 2009 rescissions).^[8]

Vermont Fiscal Year General Fund Revenues Comparison:^[9]

Actions taken in FY 2009 and 2010 to balance the budget include:^[10]

• The number of active state employees today has been reduced from a high in July 2008 of 8,383 to an estimated 7,960 as of July 2009.
• Another 90 positions are likely to be eliminated as the result of the retirement incentive. At that point, the number of State employees in Vermont will reach 2003 levels, with more reductions possible.
• Tax changes included: Reducing the capital gains exemption to a flat $5,000 (with some exceptions), eliminating the state and local tax deduction, lowering tax rates, cigarette tax increases, an estate tax exemption set at $2 million, and a tax amnesty program.
• The current deficit projection for Vermont is:
  • FY 2011 ($ 82 million) = 6.4% shortfall
  • FY 2012 ($155 million) = 11.6% shortfall
  • FY 2013 ($127 million) = 9.2% shortfall
• Total ‘Real’ (once duplications are accounted for) FY10 Budget = $4.6 Billion, including ARRA, which breaks down by funding sources as follows:
  • Federal Funds $ 1.44 B 31%
  • Fed. ARRA Funds $ 373 M 8%
  • General Fund $ 1.09 B 23%
  • Education Fund $ 1.07 B 23%
  • Transportation Fund $ 215 M 5%
  • Special Funds $ 450 M 10%

[edit] Budget Background

Vermont's fiscal year 2010 began July 1, 2009 and ends June 30, 2010. In September and October instructions are distributed to each agency and department, with a budget allocation for the coming fiscal year. By December the Governor reviews agency requests, past expenditures and revenue data before ultimately compiling budget recommendations for the upcoming fiscal year. In January, when the Legislature convenes, the Governor presents the budget proposals with a formal address to a joint meeting of all House and Senate members. Once both the House and the Senate approve all of the appropriations and make any necessary changes the Governor makes the final approval before the new budget bill is accepted. Should any changes be necessary throughout the fiscal year the Budget Adjustment Act allows for the Governor to submit proposed changes. The House and Senate pass the final version of the Budget Adjustment Bill and the bill is forwarded to the Governor for final approval. ^[11]

Public hearings are held throughout the budget process, dealing with particular programs, but not according to a set schedule. The state constitution prescribes a biennial legislature; in practice, legislature meets annually, in regular and adjourned sessions.^[12]

[edit] Budget figures

The following table provides a history of Vermont's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See Vermont state budget (2008-2009) for more information.

[edit] Accounting Principles

The Office of Vermont State Auditor is one of five constitutional officers in Vermont. The Office provides an independent and objective assessment of Vermont's governmental operations, publishing its audit reports online. Thomas M. Salmon was elected Vermont State Auditor in 2006.^[14]

The Institute for Truth in Accounting (IFTA) rates Vermont “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Vermont's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[15] Vermont's CAFRs are a publication of the Vermont Department of Finance and Management. Jim Reardon is Commissioner of the Department and Management.^[16]

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 1999.^[18]
• An independent auditor’s report is published on page 12 of the document.^[19]
• It provides supplements to the budget workup, starting on page 128.
• The budget is posted using organized and consistent methods of financial reporting.
• Vermont law requires a balanced budget, but a deficit is permitted.^[20]
• It includes all costs incurred by the government, including long-term liabilities, starting on page 20 of the document.^[19]
• The CAFR compares estimated and actual budgetary numbers, such as on page 131 of the document.^[19]

[edit] The bad

• The Vermont office was somewhat tardy in submitting the budget.
• The CAFR is posted in a PDF format, so it’s not searchable online.

[edit] Budget transparency

Vermont currently has no statewide, official spending database online. However, the Public Assets Institute and the Ethan Allen Institute launched Vermont Transparency, which discloses information about state spending, state revenues, municipal spending, federal contracts, education finance, school spending and federal stimulus funds.

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

Vermont.gov is the website for the state of Vermont.

• Main article: Evaluation of state websites

[edit] The good

• Budget and annual financial audits are published.^[21]
• Elected officials are listed with contact information.^[22]
• Administrative officials listed with contact information under respective agency.^[23]
• Current state contracts are available.^[24]
• Information on the Vermont Public Records Law is provided, including a sample request letter.^[25]
• State tax information is provided.^[26]
• Includes a searchable database of all registered lobbyists and their employers.^[27]

[edit] The bad

• Does not provide information on ethics and agency lobbying contracts.
• Does not provide contact information/form for making open record requests.

[edit] Legislation

• Vermont Joint Resolution 57, available here, requested "the Agency of Administration to post all state contracts and grants in full text on the internet."^[28]

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[29]

• Vermont will receive an estimated $581,817,388.^[30]

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[31][32]

According to the ARRP website, the stimulus package sent almost $4.6 million to six Congressional Districts in Vermont created 7.5 jobs. An additional $368 million was sent to two other districts in the state. However, Vermont has only District 00 and is represented by one Congressman. That district received nearly $320 million less than the non-existent District 1. Vermont’s fake Districts received a total of $398,601,110 to "create/sustain" 1,909.2 jobs.^[33]

[edit] External links

[edit] Additional reading

• Congressman Peter Welch,"User's Guide to Economic Recovery Resources," retrieved March 30,2009
• Gov. Douglas,"Inaugural Address of Governor James H. Douglas," January 8,2009
• Gov. Douglas,"Governor’s Budget Address," January 22,2009

[edit] References

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	v • d • e State of Vermont Montpelier (capital)
Transparency	Public Records Law | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | Transparency blogs | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of Towns | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of township websites | Evaluation of school district websites |
Government	Vermont State Constitution | Executive | House of Representatives | Senate |
Judiciary	Vermont Supreme Court | Superior Court | District Court | Judicial nomination process | Judicial news | Judicial activist organizations |
Ballot Measures	Ballot measures | History of direct democracy | Campaign finance requirements |