Administration proposes new budget plan

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(Host) Governor Jim Douglas has unveiled a plan to cut an additional $42 million from next year’s budget.

It’s the administration’s response to the budget plan that Democrats passed earlier this month – and that Douglas plans to veto.

VPRs Bob Kinzel reports.

(Kinzel) Administration Secretary Neale Lunderville says the new plan is a responsible way to balance next year’s budget – it includes more cuts than the Legislature proposed and it raises fewer taxes.

Lunderville says the $42 million in additional cuts are focused on Human Service programs and the Education Fund because these two areas represent a huge part of the state budget:

(Lunderville) "Some of the reductions that we’ll be proposing today are certainly ones that are not easy to make but we have to put them in context and the context is Vermont already has by the New York Times study the most generous benefits in social services more generous than any other state we have to put in context that we spend nearly more than any other state on education."

(Kinzel) The plan also calls for 120 additional state employee layoffs. Lunderville thinks some of the positions can be eliminated by not filling vacancies.  These layoffs would be on top of the 320 job reductions that the Administration is already seeking:

(Lunderville) "There certainly will be an impact we said with the 320 positions that there will be an impact and should we end up pursuing $17 million in savings we will reveal to all of you which positions will be on that list."

(Kinzel)The governor’s plan also eliminates statewide property tax subsidizes for families making more than $75,000 a year and it makes an additional $5 million cut to the state’s Housing and Land Conservation program.

Senate Majority leader John Campbell says he’s disappointed by the Governor’s plan and he thinks the budget divide between the Democrats and Douglas has grown wider with the release of this plan:

(Campbell) "From what we have already passed and what the governor proposed today I think there is a wide chasm there and anything we do has to be responsible not only for this year but also for the upcoming years and I just do not see it with the governor’s proposal today."

(Kinzel) And Campbell says the governor’s plan highlights the strong philosophical differences between Douglas and the Democrats:

(Campbell) "We in Vermont put a certain value on helping out those people who are the most vulnerable and how can we now as a state say we’re going to pull the plug on you and you have to find some other way to take care of your children, to take care of your elderly or your handicapped people I find his to be again an assault on everything that Vermont stands for."

(Kinzel) Douglas’s plan raises $13 million in new revenue compared to the $26 million included in the Democrats’ plan.  He supports their increases in alcohol and tobacco taxes but he scales back changes to the capital gains tax and he eliminates a plan to cap income tax deductions.

As a result, his plan to lower income tax rates is not as large as the one passed by the Legislature.

The Democrats say they’ll continue to study the governor’s plan and will offer a more detailed evaluation in a few days.

For VPR News I’m Bob Kinzel.

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