(Host) The state of Vermont is expected to receive $85 million from the federal government as part of the recently passed federal tax cut bill. Legislative leaders are putting together a package to allocate these funds before adjourning.
VPR’s Bob Kinzel reports:
(Kinzel) Just as the legislative session enters what many people feel will be its final week, the House and Senate Appropriations committees have been given a new assignment: figure out how to deal with $85 million in new federal revenue.
Under the federal law, $35 million must be spent on Medicaid programs but the remaining $50 million has few strings attached to it. This money will come to state in two checks – $25 million next month and another $25 million in October.
Governor Jim Douglas is making it very clear to lawmakers that this one time money should not be used for any ongoing programs of state government:
(Douglas) “We’re at the eleventh hour of the negotiations on the budget for the next fiscal year and to reopen that process at this point would delay the session. So I really believe the budget conferees ought to focus on the bottom line as they were a week ago, put the money in reserve and wrap the session up.”
(Kinzel) A preliminary plan is developing that would allocate half of the first payment, or roughly $13 million, to the state’s rainy day budget fund. This fund has been depleted this year and lawmakers are eager to restore some money to it. The other half would be used to prepay the opening of the new Springfield prison and to pay down some of a deficit in the state’s computer programs.
The second payment of $25 million would be placed in a separate fund that lawmakers could tap into next winter if the state economy doesn’t rebound. House Appropriations Chairman Richard Westman thinks it’s very important to put some money away for any unexpected developments next year:
(Westman) “And we want to make sure that we have that money in a place where we can have it saved and we can use it if we need to, to help us. Because we’re not sure that next year and the rest of this fiscal year is going to be rosy.”
(Kinzel) If the state economy does improve, Senate Appropriations Chairwoman Susan Bartlett says there are a lot of one time projects that lawmakers could consider next winter:
(Bartlett) “Then it’s an opportunity to do some one time spending. It can be computers, it could be – we have a long term plan for improving and upgrading the infrastructure of our state parks. We could do energy efficiency dollars available for schools.”
(Kinzel) It’s expected that the plan to allocate the new federal money will be included in the state budget for next year.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.