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Article published Jan 23, 2009

Douglas slashes budget, calls for cutting 660 jobs

By Louis Porter Vermont Press Bureau
MONTPELIER – Facing a $201 million gap between state revenue and expenditures over the next fiscal year, Gov. James Douglas' Thursday proposed a budget that would take its toll on services and workers across nearly all of state government.

Those feeling the pain would include some of the elderly, the disabled, the blind, doctors and 660 state workers if the budget – $1.1 billion of state General Fund spending and more than $4 billion in education and federal spending – is approved. The proposed budget is expected to be a smaller budget in terms of state money than any time back to fiscal year 2006.

Of the 660 state positions which would be eliminated if the budget were approved by lawmakers, roughly 285 of those workers are expected to be in the Agency of Human Services, while about 45 are expected to be in the Agency of Natural Resources.

The cuts would come both through the removal of vacant positions and layoffs. That reduction, which amounts to roughly 8 percent of the state workforce, is on top of the 400 previous vacant positions already eliminated.

There were no increases in broad based taxes proposed by the governor, who has held strong to his insistence that such taxes would be counter-productive. One tax increase that will be "inevitable" over the next year, however, is the assessment levied on employers to pay for the state's unemployment insurance program, Douglas said.

The fund is projected to be as much as $97 million short by the end of the next fiscal year. "Employers in Vermont will pay an additional tax," the governor said.

"Vermonters expect us to preserve basic services for the many, and not just a more generous benefit for the few," Douglas said, in a sentence that effectively summed up his approach to the tough fiscal times. "There is no joy in making cuts at such a challenging time."

But Democratic lawmakers said they had several issues with the proposed budget, although they have not reviewed it thoroughly yet.

"My concern is that most of the cuts here are going to be in the human services budget," Speaker of the House Shap Smith, D-Morrisville, said. They also worried about a possible addition to the property tax through Douglas' requested changes to school funding.

"We have an obligation to be transparent with Vermonters when we are going to take money out of their pockets," he said.

The elimination of the state's prescription drug benefit VPharm is "particularly difficult" Douglas said, given that his administration and the Legislature pledged when they created the program several years ago not to allow Vermonters to be hurt financially by the Medicare Part D program – as they will be now.

Such a cut was already included in a proposed change to the current year budget. Lawmakers have recently been hearing from Vermonters who will be hurt by the change and are not eager to cut the program.

Douglas also targeted – in the rhetoric of his speech if not action given the constraints on his power – public school spending and the state's nonprofits.

"Bringing education spending in line with other important aspects of government is the first step toward a more equitable budget," Douglas said.

The governor incorporated in the budget savings from his recent proposal to change school funding, including shifting $40 million in teacher's retirement payments to the Education Fund.

The changes amount to an increase in local property taxes, Democratic leaders in the Legislature said.

But Douglas disagreed. If school spending in the budgets that are to be voted on in a few weeks is reduced, the changes can be made without property tax increases, he said.

"It will hold the line on property taxes if local school budgets are not increased on a per pupil basis," he said.

As for nonprofits, "a review of salaries for non-profit executives reveals some with robust compensation packages well in excess of state or municipal employees," Douglas said.

The housing organizations across the state particularly should be consolidated, Douglas said.

The governor also proposed directing more than $8 million that would have gone to the Vermont Housing and Conservation Board to the General Fund instead, although half of that would be replaced with expected federal money.

Vermont State Employees Association leaders said the proposal to cut 660 positions and workers is a mistake.

"This is a grim day particularly for the very vulnerable population of Vermonters who depend on the work of Vermont state employees," said Jes Kraus, the head of the union, who called the budget as proposed "an anti-stimulus package."

Administration officials said they could not, under fair bargaining rules, unilaterally propose re-opening the union contract to institute reduced hours or pay instead of layoffs. But they did not rule out the idea.

"That is a membership decision," Kraus said. But, he added, the administration has not been helpful about getting information to the union about how much the layoffs are expected to save and how many of them there will be in what departments.
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It could be a long time before I can afford a trip back to Africa or anywhere else.

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~Ann

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