The second session of the legislative
biennium began on Tuesday of this week. Once again we are faced with
fiscal year expenses that exceeded revenues and require some
adjustments to the budget. Fortunately, revenues came in a little
better than expected, but were outpaced by increases in Medicaid
expenditures.
The Appropriations Committee has already been taking a
close look at areas where spending has not been as high as projected
and is looking for money to move around to fill the Medicaid gap.
The ability of the Joint Fiscal Office and the legislature to predict
the state’s financial picture continues to be inadequate despite
our best efforts last year. It appears our crystal ball needs an
upgrade.
While the budget adjustment is a high
priority, the effects of Act 46, the Education Reform Act, are even
more pressing. The caps that school boards across the state are
facing on per-pupil spending increases have been greater than
anticipated. This is especially affecting school districts that are
continuing to experience declines in student population. In CSSU
Charlotte, Williston, Hinesburg, and CVU are in this situation.
Charlotte will be assessed a significant penalty unless it can reduce
its budget by more than $500,000 under the current formula. The
repercussions throughout the state have caused the House and Senate
Education committees as well as the Governor to work on changes that
will mitigate the impending pain. Since school boards have to settle
on a budget recommendation by the third week in January, the
legislature must act within the first two weeks on this.
There are three proposals going into
the session. The House Education Committee’s bi-partisan proposal
is to increase the cap from 1.48% to 2.38%. This would make the
required spending reduction for Charlotte a more manageable $53,000.
The Governor is recommending that the caps and penalties be suspended
for a year to allow more districts to consider and vote on
consolidation. Since the purpose of the spending caps and penalties
was to give a push for consolidation, it makes sense to allow time
for consolidation studies to be completed and, if appropriate, be
presented to the voters. The Senate’s proposal is to scrap the Act
46 caps and revert back to the pre-Act 46 spending caps and
penalties. This issue will be a major news story, so watch the news
and you will know the outcome as soon as I do.
I look forward to publishing my weekly
reports in our local papers throughout the session, altenating
between The Charlotte News and The Citizen,
to keep you informed. I also welcome your comments and can be
reached by phone (802-233-5238) or by email
(myantachka.dfa@gmail.com).
