State budget growth not to exceed 1%

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(Host) Governor Jim Douglas says he’ll propose a new state budget tomorrow that calls for very limited growth in state spending next year.

Speaking Tuesday night on VPR’s Switchboard program, Douglas said the overall growth rate for the entire budget will be 1%. Since Douglas is proposing increases in public safety, economic development and higher education, this means many other departments will have to get by with less money:

(Douglas) “Other agencies of state government, which is most of them, have been asked to take reductions sometimes as high as 5% or 10%. That’s a very difficult reduction but it’s essential because we have a very high tax burden in Vermont and I don’t want to dip into the pockets of the voters of our state to fund government. We can do this, we can tighten our belts, we can meet the human needs of Vermonters while still exercising restraint.”

(Host) Douglas says he’ll propose some significant changes to the Medicaid program. The governor wants to eliminate co-payments for many programs but he’ll also propose larger deductibles for recipients in higher income eligibility groups:

(Douglas) “The overwhelming percentage of Medicaid recipients will not pay more, they’ll either pay the same or in a few cases pay a little less. And secondly, there will be no reduction of the scope of programs or services offered. And thirdly, no one will be denied eligibility from the program. So I think it’s a compassionate yet fiscally responsible approach. And we really have to do something because the Joint Fiscal Office projects that in fiscal 2008, if we fail to act, the Medicaid program will be in the hole to the tune of $150 million.”

(Host) Douglas will also propose a restructuring of the state’s Medicaid pharmaceutical program to encourage greater use of generic drugs.

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