Vermont state budget
From Sunshine Review
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Vermont faced additional shortfalls of $28 million for FY 2010 and $23 million for FY 2011 based on the July 16, 2009 consensus revenue forecast, just 2 weeks into FY 2010. Gov. Jim Douglas proposed August 5, 2009 the $28 million needed in rescissions for the current fiscal year to keep the budget balanced,[1] accepted by the Vermont State Legislature's Joint Fiscal Committee on August 18, 2009.[2]
Vermont's General Fund FY 2010 revenue is below FY 2005.[3] 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.[4]
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%.[5]
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.[6]
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).[7]
Vermont Fiscal Year General Fund Revenues Comparison:[8]
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 (est.) |
| $967 million | $1.035 billion | $1.112 billion | $1.151 billion | $1.200 billion | $1.103 billion | $1.025 billion | $1.084 billion |
Actions taken in FY 2009 and 2010 to balance the budget include:[9]
- 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. [10]
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.[11]
[edit] Budget figures
The following table provides a history of Vermont's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $3.8 [12] | $17.8 [12] |
| 2001 | $4.0 [12] | $18.8 [12] |
| 2002 | $4.2 [12] | $19.6 [12] |
| 2003 | $4.5 [12] | $20.6 [12] |
| 2004 | $4.8 [12] | $21.8 [12] |
| 2005 | $5.2 [12] | $22.7 [12] |
| 2006 | $5.4 [12] | $23.6 [12] |
| 2007 | $5.6 [12] | $24.5 [12] |
| 2008 | $5.8 [12] | $25.5 [12] |
| 2009 | $6.0* [12] | $26.5* [12] |
- 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.[13]
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.[14] Vermont's CAFRs are a publication of the Vermont Department of Finance and Management. Jim Reardon is Commissioner of the Department and Management.[15]
| Credit Rating | Fitch | Moody's | S&P |
| Vermont[16] | AA+ | Aaa | AA+ |
[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.
- Vermont Joint Resolution 57, available here, requested "the Agency of Administration to post all state contracts and grants in full text on the internet."[17]
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Revenue Source | Expenditures | Contracts | Employee salary |
|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a |
[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.[18]
- Vermont will receive an estimated $581,817,388.[19]
[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.[20][21]
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.[22]
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Ethan Allen Institute
- Vermont Department of Finance and Management
- Vermont Agency of Administration
- Vermont state site
- Vermont Legislature
[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
- ↑ Gov. Douglas' Office, "2010 Rescission Proposal to JFC," August 5, 2009
- ↑ Joint Fiscal Committee, "Committee Modifications and Comments," August 18, 2009
- ↑ Vermont Legislative Fiscal Office, "VT Revenue and Budget Picture," September 18, 2009
- ↑ Burlington Free Press, "Pressure grows on Vermont budget," October 29, 2009
- ↑ State of Vermont Agency of Administration, "2009 Revenue Results," November 10, 2009
- ↑ WPTZ, "Vt. Emergency Board To Get Revenue Forecast: Unemployment Expected To Rise Through Next Year," November 12, 2009
- ↑ Department of Finance & Management, Budget & Management Division, "FY 2011 Budget Instructions," October 2, 2009
- ↑ Vermont Legislative Fiscal Office, "VT Revenue and Budget Picture," September 18, 2009
- ↑ Vermont Legislative Fiscal Office, "VT Revenue and Budget Picture," September 18, 2009
- ↑ State of Vermont,"State budget process," retrieved March 31,2009
- ↑ National Association of Budget Officers, "Budget Processes in the States," 2008
- ↑ 12.00 12.01 12.02 12.03 12.04 12.05 12.06 12.07 12.08 12.09 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 US Government Spending,"Vermont State and Local spending," retrieved March 30,2009
- ↑ Vermont State Auditor Web site, retrieved November 16, 2009
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Vermont Department of Finance and Management Web site, retrieved November 16, 2009
- ↑ State of Indiana, “State Credit Ratings-as of June 24, 2009"
- ↑ Vermont Joint Resolution 57
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal,"Stimulus Spending by State," March 12,2009
- ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- ↑ Vermont, Watchdog.org, November 17, 2009
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