Gov. Phil Scott's finance leadership team presented a revised $1.66 billion fiscal 2021 budget proposal Tuesday, a 2.42 percent reduction from the $1.7 billion spending plan Scott offered in January.
"The proposal, presented in separate virtual briefings to the state House and state Senate Appropriations Committees, comes a week before the full Legislature returns to work to complete the budget process for the year. It does not propose new taxes or fees, instead relying upon better-than-expected revenues, already realized budget savings and expenses that can be redeemed by federal coronavirus relief funds. In total it uses $158 million in one-time funds. What it doesn't include is $30 million in bridge funding for the financially troubled Vermont State College System, instead listing it as a potential use of federal relief dollars if and when the government approves such a use, or allocates more funding. House lawmakers pressed Finance and Management Commissioner Adam Greshin on that point, and Greshin said Scott would approve the use of reserve funds to provide bridge funding if federal dollars are not available.
Last week, when the state Emergency Board presented the updated consensus revenue forecast from the state's top economists, it offered bad news and good news: The declines in revenue are still large, but not as large as feared. That forecast figures significantly in the new budget proposal. But Young and Greshin also warned that a big hit may come in fiscal 2022, depending on how the pandemic and recovery play out and what Congress decides to do about continued aid to states. Another decrease in revenue is projected for fiscal 2022 by the state's top economists, and one-time sources of money can't always be guaranteed. "We're sober about the fact we face a challenge next year," Greshin said. "There may well be there another pool of money we can draw on, it may well be the federal government steps up, maybe the economy bounces back stronger than you think."
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