Posted By Anne on June 8, 2010
Budget of FY 11
For three years now, the recession has affected Vermont families, businesses and the state budget. The FY 2011 budget required difficult choices to resolve a $154 million gap between revenues and expenditures, while caring for each other, strengthening our communities and investing in the future. Through hard work and compromise we are positioning our state for a solid economic recovery.
The budget gap results from: $20 million in declining Federal Stimulus revenues, $70 million of growth in Medicaid and health care costs, $25 million in retirement expense pressures, in part due to loss of investment revenues in those retirement funds, $39 million of pressures in state government, and $17 million in other factors. We were able to work through these difficulties, as well as the Legislature’s differences with the Governor, to agree on a responsible, balanced budget.
The FY2011 state budget makes investments to preserve the health, well being and dignity of Vermonters. We restored the Administration’s proposed cuts to home-based services that are critical to keeping elderly Vermonters and people with disabilities in their homes. By sustaining Vermont’s Senior Companion program, Housing and Supportive Services grants, Foster Grandparent program, and the Neighbor to Neighbor program, our neighbors can continue to live with dignity in their communities and avoid the extraordinary cost of nursing home care. Our restoration of flexible family funding, attendant services and targeted case management means that parents of children with disabilities can maintain employment, knowing their children are in good care.
Many Vermonters are sharing the burden of budget reductions. State employees and legislators accepted a pay cut for 2 years. Teachers made changes to their retirement saving Vermont $15 million. Participants in Catamount Health will pay higher deductibles. Grants throughout state government will see reductions.
In order to improve Vermont’s financial stability, the FY2011 budget invested in tax policy to promote business investment, as well as positions that encourage business growth, collect owed taxes, and save significant funds by improving Medicaid integrity.
The FY2011 budget demonstrates responsible choices for Vermont’s fiscal future by reducing the 2012 deficit from $250 million to $122 million. We saved $17 million in retirement costs for teachers and state employees for this year, and each year going forward. We provided a portion of funding to replace the expensive and inadequate Vermont State Hospital. We began a new budgeting process in Challenges for Change that reduces costs by $38 million, and more in the future, while improving government effectiveness and outcomes. This is a budget that reflects our means as well as Vermont’s community values.