The Vermont Legislature is working diligently on responsible funding plans for the new COVID-19 reality. Instead of creating a typical budget for fiscal year 2021 which begins July 1, the House approved a budget only for the first quarter. With revenues down, businesses and residents struggling, expenses uncertain, and federal funding having many strings attached, we can’t responsibly budget in the face of so much uncertainty.
This budget funds state operations for July, August, and September, generally allocating departments with 25% of their 2019 budgets — with two exceptions. VTrans and The Agency of Natural Resources conduct the bulk of their work during summer months, so they would be funded at 60% and 50% respectively. In August the Legislature will reconvene and, using updated revenues and forecasts, will craft the budget for the remainder of the year.
While a lot of federal money has already been distributed in Vermont through programs like Unemployment Insurance and the Payroll Protection Program, much more is needed. The Legislature is giving final approval to a first round of $93 million in targeted relief. State Auditor Doug Hoffer has an excellent breakdown of state and federal spending dollars on the Auditor’s website, https://auditor.vermont.gov/content/covid-19-federal-and-state-expenditures-0
The House is putting finishing touches on a major allocation of nearly $600 million to shore up almost every sector of the economy, within the federal guidelines (which are strict and often unclear). Because the amount, timing, and conditions of further federal funding are still uncertain, we are holding $400 million in reserve for allocation in August when we better know what needs are most critical at that time. Should federal funds come through before August, those reserves can be released earlier.
But none of this explains why the process is so painfully slow. Under the Governor’s State of Emergency the administration can and did take executive action quickly. However money can only be allocated by the Legislature and that process is designed (for normal years) to be slow precisely to prevent hasty action.
For example, the above $600 million allocation is part of federal COVID-19 relief funds. Since the money arrived in April we have been asking for clarification on the restrictions and guidelines on its use. The Governor proposed general blocks of spending: agriculture, housing, health care, schools, etc. The House adapted that proposal, making changes as new information develops. Committees of jurisdiction dig deep into the details of how relief funding can be most effectively used within the given restrictions, and taking testimony from many, many stakeholders and experts. Those recommendations then go to the Appropriations Committees which sifts through them and pares down the huge funding requests to match the dollars available. The House then has to debate, vote on it twice, and then it goes to the Senate where the same process must occur.
As always, please contact me with questions or comments.