Tag Archives: Mary Hooper

The long and winding (and circular) road

It’s been a very long week at the House Appropriations Committee, which has been trying to close the remaining $18 million or so in the budget gap for Fiscal Year 2016. In today’s session, members tried everything they could think of, and then some, to balance the budget while avoiding some of the “big uglies” — the proposed cuts that nobody wanted to make.

Shall I cut to the chase? After advancing through the five stages of grief, they ended up accepting pretty much the entire list, including $6 million from LIHEAP, $2 million from a Department of Children and Families weatherization program, a $1.6 million hit to Reach Up, a million-dollar cut for the Vermont Veterans Home, a reduction in state funds for Vermont PBS, and $817,000 from Vermont Interactive Television.

This list was dubbed a “wish list” by the committee — not because they wanted to cut the items, but precisely the opposite: their wish was to avoid having to cut these items that were put on the chopping block in Gov. Shumlin’s budget proposal.

There were a couple of adjustments. As reported in my previous post, the committee adopted Rep. Maty Hooper’s plan to phase out the state prison at Windsor and devote some of the savings to re-entry programs aimed at reducing the inmate population and avoiding the export of more inmates to out-of-state prisons. And a $500,000 cut to the judiciary system was technically made a one-time cut, with the understanding that the system will reform itself in the coming year to generate equivalent savings in future years.

All the “wish list” cuts adopted by Appropriations added up to a little over $14 million in savings, mainly from the Agency of Human Services. Which is almost inevitable; the committee was looking for cuts only in General Fund programs, which leaves out a significant share of state spending. Most General Fund spending is in Human Services, so that’s where the cuts had to come from.

Mind you, nothing was finally decided today. Some committee members still hope to restore some of the cuts, but in order to do so, they’ll have to find equivalent cuts elsewhere. (Appropriations has no authority to increase revenues; it only oversees the spending of state funds.) As they put it, “buy back” some cuts. That seems unlikely, however; at day’s end, the committee was still $1.93 million short of a balanced budget. So in order to restore any of today’s cuts, they’d have to find more than $2 million in savings elsewhere.

Appropriations Chair Mitzi Johnson looking for cuts of any size, large or small.

Appropriations Chair Mitzi Johnson looking for cuts of any size, large or small.

And they tried really hard today. Most of the committee’s Democratic majority did not want to impose Shumlin’s cuts. Committee Chair Mitzi Johnson repeatedly invited members to come up with their own substitutes. And they all looked high and low, with almost no success.

At one point, Johnson asked members to split up into “unlike pairs” to discuss the “wish list” and other possible cuts. That session lasted almost an hour, and ended with several members making cellphone calls in pursuit of information on possible savings. Items of as little as a few thousand dollars were offered.

In the end, they wound up back at the “wish list.” In the absence of any alternatives, and with guidance from House leadership that only a certain amount of new revenue would be available, the Appropriations Committee bit the bullet and tentatively approved all the cuts on the “wish list.” It also approved a couple million in additional savings that weren’t on the “wish list.”

Watching all this made me appreciate how hard it is to find savings in the budget. For all the conservatives’ cries of waste and abuse and lavish spending, Republican members had no more success than Democrats in finding fat to trim. In the end, committee members of all stripes were reluctantly united behind a budget proposal that will bring painful cuts to many areas of government. There were no easy calls.

This is an early step in the process. The budget has to get through the full House, where trouble may loom in the form of a Republican/liberal coalition that opposes the budget for very different reasons. If it gets through the House, it’ll have to make its way through the Senate’s often weird and unpredictable gauntlet. But the Appropriations Committee tried and tried and tried; and in the end, it couldn’t find more palatable alternatives to Gov. Shumlin’s budget proposal.

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Mary Hooper pulls some fat from the budgetary fire

Previously I brought you bitter tidings of a budget cut that would mean sending more Vermont inmates to for-profit, out-of-state prisons.

Well, my pessimism was premature. Today, Rep. Mary Hooper (D-Breezy Acres) introduced a plan to phase in the closure of the Southeast State Correctional Facility, and devote some of the projected savings to new re-entry programs designed to lower the inmate population. The plan appeared sound and convincing to the House Appropriations Committee. If it all works as planned, Vermont’s inmate census will be low enough when the prison closes, that no out-of-state transfers will be required. (Corrections Commissioner Andy Pallito had estimated that 100 more inmates would have to be exported to the tender mercies of the Corrections Corporation of America.)

And bonus: the released inmates will be better prepared to make a successful re-entry into civilian life. That makes them less likely to re-offend.

Her proposal was accepted by the Appropriations Committee and folded into its budget plan. I don’t know all the details of Hooper’s proposal; I didn’t have a chance to speak with her today. But it’s good news. It turns a negative into a positive, and still allows the state to bank $1.7 million in savings from the prison closure.

More on today’s hot and heavy Appropriations action coming soon. Warning: not a lot of good news.

Happy budget fun times

The two House committees in charge of the state’s purse strings got together for a joint meeting Wednesday afternoon, and heard a solid hour of sobering news. The state has a substantial budget gap that seems to be widening by the day, and there is little appetite for the scale of cutbacks or tax increases necessary to close it. The two panels: Ways and Means, which acts on taxation and revenue; and Appropriations, which makes the spending decisions. In a tough budget year like this one, each of the two panels wanted to gain a better understanding of the challenges facing the other.

The bulk of the session was a walkthrough of proposed expenditures and revenues for the coming fiscal year, led by Joint Fiscal Office budget guru* Sara Teachout.

*Not necessarily her actual title. 

Sara Teachout of the Joint Fiscal Office, pointing to a large flatscreen display full of dispiriting numbers.

Sara Teachout of the Joint Fiscal Office, pointing to a large flatscreen display full of dispiriting numbers.

She began the session by outlining one of the little-known worms in the budgetary apple: cuts in spending would take effect on July 1, the start of FY 2016, but many of the potential revenue enhancements would not. For example: If the state eliminates a tax deduction on personal income, that revenue would not be realized until April 2016, when 2015 tax returns are due. That’s three-quarters of the way through FY 2016.

Much of Teachout’s presentation was a repeat of her tax-budget tutorial I heard at a recent Ways and Means meeting; I wrote three reports on the meeting, which can be found here, here, and here. (If you don’t want to wade through all three, do the last one first.) She did offer more detail at this joint meeting, including a very specific listing of the real costs of various tax expenditures and deductions. (All of her documents are posted on the Ways and Means webpage.)

There was some limited discussion after Teachout’s teach-in. Most significantly, Ways and Means chair Janet Ancel restated her support for a cap on tax deductions: “Speaking for myself, it’s the right thing to do if we’re looking for new revenue.” Rep. Mary Hooper, a member of the Appropriations Committee, noted that a cap on deductions “spreads out the impact, rather than zeroing in on specific exemptions or deductions.”

As I reported previously, Vermont’s tax rules allow the average million-dollar earner to claim hundreds of thousands of dollars in deductions. That’s why top earners pay an effective income tax rate of 5.1% instead of the statutory rate of 8.95%.

Two years ago, the House approved a cap on itemized tax deductions at 2.5 times the standard deduction; the measure died, mostly because of Governor Shumlin’s opposition. This year, he has signaled his openness to changing deductions and expenditures, even as he remains steadfast in opposing increases on his Big Three taxes: income, sales, and rooms & meals.

The cap would, IMO, greatly enhance the fairness of our state tax system. Currently, top earners pay a lower proportion of their earnings in state and local taxes than people in any other income group.

There was also some support in the room for looking at some of the sales-tax exemptions. For example, the state could impose a ceiling on clothing purchases — making them tax-exempt only below a certain dollar amount.

Rep. Mitzi Johnson, Appropriations chair, said her committee will “begin a conversaiton soon to lay out targets [for spending cuts].” She noted the importance of the joint meeting for gaining a clearer picture of “where the revenue could be coming from.”

The meeting was one more small step in what promises to be a long, grinding process leading to decisions that will make at least some constituencies unhappy. As one Statehouse observer told me — only half jokingly — “it might take until July” before they can work everything out.