Vermont’s wartime budget

2023-05-24

Dear friend,

This week the House of Representatives delivered to Governor Phil Scott H.494, our budget for the fiscal year starting July 1, 2023.

I voted "Yes" on the budget with 90 members of the House. I ask the Governor to sign it.

This budget is not without controversy. As expected, the House Republican caucus voted against it, under the logic that we are over-spending.

A number of Democrats and Progressives also voted against the budget, bringing the total to 53 votes against, but for the opposite reason. They think we aren't allocating enough resources to more gently wind down the "motel voucher" program. (See 2,300 Vermonters to become homeless July 1st.)

I voted "Yes" because voters told me last year that they want to see their elected leaders strike compromise. H.494 looks to me like one of those times where a compromise means it doesn't please anybody.

This is going to be a long post. Here's a picture of our new goats to break it up. Baaaaaa!

As the Legislature started the budget process in January, we were all aware of the impending end to emergency federal funding related to the COVID-19 pandemic.

Even with the COVID money receding into the rear-view, though, Vermont is a small cork bobbing in the waves of national and international problems. And those problems very much affect our budget.

The United States is a country at war. Militarily, we are directly or closely involved in:

--the Global War on Terror
--the American intervention in Yemen
--the American military intervention in Niger
--the American-led intervention in Syria
--the Russian Invasion of Ukraine

Let's not forget the Korean War, which will hopefully never again go hot, but hasn't ended. We have 28,500 active-duty troops in South Korea, and 55,000 in Japan. Overall, we have about 170,000 active-duty military personnel stationed outside the United States and its territories.

Without a major military base or the like here in Vermont, we often avoid seeing on a daily basis the direct impacts of these conflicts. But our military families know.

Overall, Vermont's military budget is $65.6 million, some but not all of which is supported by federal dollars. Besides the main operating expenses, the budget would spend $1.4 million on veterans' affairs, only a fraction of which is supported by federal dollars. We allocated another $1.3 million for the National Guard Tuition Benefit Program.

On a smaller scale but no less life-changing, our budget includes $10,000 each for:

--A grant to the USS Vermont Support Group, a nonprofit organization supporting military members serving on the USS Vermont (SSN 792) and their families.

--A grant to North Country Honor Flight, an organization that sponsors escorted trips for veterans to visit the war memorials on the National Mall, to cover the expenses of 10 Vermont resident attendees (application forms).

For the second year, Vermont is exempting up to $10,000 in retirement income for veterans from income taxes. I would like to see this cover all veterans' income. This is one of many compromises in this budget.

Our entire economy feels the strain of the war in Ukraine. Inflation has hit Vermont's organic dairy farmers hard, not only in diesel costs but grain prices that went through the roof. I fought hard for the $6.2 million in assistance to organic dairies included in H.494.

If only those were the only challenges we were facing. But there's more.

More than 106,000 persons in the U.S. died from drug-involved overdose in 2021, including illicit drugs and prescription opioids. Scores more are addicted to opioids and struggling to survive. This crisis is dominated by fentanyl, a synthetic opioid whose chemical warfare is sent to us from China, via Mexico. Even as we deploy naloxone to prevent opioid overdose deaths, the new drug they are sending us is xylazine, which doesn't respond to naloxone.

From where I sit as a State Representative, Vermont is a triage unit in a world awash with refugees of wars and conflicts that I'd like our national leaders to get us out of. (This is another reason I voted "Yes" on S.5, The Affordable Heat Act -- to study how to reduce our reliance on Putin's poison, natural gas.)

Vermont's cities and towns are setting up cots in gymnasiums and handing out tents and sleeping bags as they brace for homelessness like we've never seen.

If things weren't already tenuous before the pandemic, more people are coming to Vermont than ever before. This has been especially hard to deal with because, somehow, we're also short-staffed. What's true for local businesses struggling to find staff is true for essential Stage agencies like the Department of Public Safety, the Department of Education, the Agency of Human Services, and the Department of Transportation. Fewer people are doing more work.

The State budget benefits, if you can call it a benefit, from so-called vacancy savings. (By the way, vacancy savings are a strong factor in Phil Scott's reputation for fiscal responsibility. Unspent money rolls over year to year as he touts his administration's efficiency. But is that sound management? I think Vermonters are smart. And while I'm not going to call out any agencies today because I respect the hard work and dedication of the State employees who are carrying a heavier burden at understaffed agencies, I think Vermonters notice when we are affected by understaffed and faraway State agencies.)

In one way or another, cost increases and lack of services are stretching the resources of working Vermonters who are contributing members to our communities.

I see this in the 20-something Vermonters from St. Albans I spoke with last month in the State House. They have steady jobs in early education but are living at home and putting off starting a family because they can't afford rent.

That's one of the many reasons why I was proud to vote "Yes" on H.217 to enact a 0.44% payroll tax as a reliable funding source for affordable childcare that pays a living wage.

A lot of our social safety net is there for the lowest-income Vermonters.

H.217, which passed the House on a tri-partisan 118-27 vote, is a bill to support and grow our middle class. The Governor asked for a $56 million increase in childcare spending. The House and the Senate, reaching broad consensus, decided that $120 million is the figure that makes this system work for the middle-class, and that will help employers answer that question -- "Is there any childcare nearby?"

The median income for early childhood teachers in Vermont is currently under $40,000 and $22,000 for assistants, typically with no PTO or healthcare. If H.217 becomes law, starting on January 1, 2024, the state will reimburse child care providers at a 35% higher rate, enabling them to stabilize their businesses and raise wages.

But if the childcare worker makes more money, will there be housing for them?

This is the same question faced by many young families in Vermont, like the small-business owner in Halifax who's ready to build a home and raise kids on land he already owns. But those plans went on hold when the estimate came back at borrowing $500,000 to build a two-bedroom home.

I strongly supported the passage of S.100, An act relating to housing opportunities made for everyone. In addition to key Act 250 reforms that should over time bring down the cost of housing (see Acronym bills come HOME), S.100 puts into the budget the following programs to build our housing infrastructure:

--$50 million to the Vermont Housing and Conservation Board to expand affordable and mixed-income housing statewide.
--$20 million to VHIP, a successful program that provides grants and forgivable loans to private landlords to renovate, weatherize or improve accessibility for eligible rental units that are currently offline, plus the creation of new accessory dwelling units (ADUs).
--$2 million to VHFA to continue the First Generation Homebuyer Program.
--$20 million to VHFA to permanently establish a Missing Middle Homeownership Development Program, continuing a successful ARPA-funded pilot.
--$20 million to VHFA to create a new revolving loan fund to build middle-income rental housing. Plus: Studies on our codes (residential, fire and safety), a task force to look at mobile homes

Here again, this budget is a compromise. We're making these infrastructure investments as we close the nozzle on the firehouse of money we were spending on the motel program. Supported by federal aid, that was a $240 million/year program -- twice the cost of childcare.

Even as we transition out of the motel program, the budget puts $67.6 million in base funding for housing assistance, and adds $34.4 million in one-time funding, including $12.5 million to help our community partners, working with the State, to transition people to more permanent housing.

I wish it were more. But if we overstretch our means, it will be worse in the long run.

This is life in wartime. H.494 is not a budget that does everything for everybody. It is a budget with hard choices. Even as we respond to immediate crises, we must plan for the long term and invest in programs and infrastructure that support a prosperous economy in Vermont.

If the Governor signs the budget today, state agencies can focus on the hard work ahead of them, and not on contingency planning. If the Governor signs the budget today, these and other benefits will be locked and ready for the new fiscal year July 1st.

--$10 million to the Department for Children and Families to assist individuals and households experiencing homelessness.
--$15.2 million in ARPA – Emergency Rental Assistance Program funds
--$5 million for a Housing Opportunity Program grant
--$1.5 million for Family Supported Housing programming
--$1.5 million for families with very low income participating in the Reach Up program

This was your Windham-6 Representative's first year helping shape the State's budget. I worked hard to represent my constituents. At the end of the budgeting process, I'm no different from any individual Representative who sees some things I would like to see cut, and some things I would increase if I could.

H.494 is a work of compromise across the House and the Senate, and with the Governor.

Gov. Scott's $8.37 billion spending plan represented a 8.1% increase in base appropriations over last year’s budget. The Legislature came back with $8.5 billion and a 13% increase in General Fund expenditures.

Ouch. I wish we had come in lower. I wish we were able to level-fund the FY24 budget. I simply don't see how that would be possible, when increased costs and increased needs are hitting State government just like they are Vermont households.

However, there are bright spots. This is a balanced budget that is supported by diverse revenue sources that are coming in strong. Despite the stressors in the economy, General Fund revenue continues through May 2023 to track ahead of projections, according to the Joint Fiscal Office.

This is a budget that asks more of taxpayers, and it also delivers more. I ask the Governor to sign it and move the State forward.

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Questions or comments on the FY24 budget, or any of the bills I mentioned today? I'd love to hear from you.

P.S. Thanks for reading! Here's a break for your eyes -- apple blossoms and Jack Russell terrier puppies in Halifax last week.