Legislative Orientation Fiscal OfficeFiscal Overview

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Legislative Orientation Fiscal Office/Fiscal
Overview

• Stephen Klein, Fiscal Officer
• Legislative Joint Fiscal Office
• Vermont State Legislature
• November 19, 2004

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Joint Fiscal PresentationNovember 2004

• The Joint Fiscal Committee and the Joint Fiscal
  Office
• Revenue Estimates and Funds the Vermont budget
  dilemma
• The National Context The Vermont budget context
  and other states

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Legislative Joint Fiscal Committee 2 VSA 501

• 4 - Chairs of two Appropriations Committees,
  Chairs of House Ways Means, Senate Finance
  Committee
• 6 3 from each chamber, 1 from each major
  political party and one other
• Committee selects chair - traditionally rotates
  between branches
• Provides fiscal oversight when Legislature is not
  in session, develops revenue and spending
  information

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The Legislative Joint Fiscal Office1 Baldwin
Street Tel [phone]

• Nonpartisan staff to serve
• Money Committees (Appropriations, House Ways and
  Means, Senate Finance, Transportation)
• Other House Senate Committees Members
• Fiscal Issues Budget, Revenue, Health Care,
  Education and Transportation, Capital Budgets
• Publishes Fiscal Focus newsletter, Fiscal Facts,
  fiscal briefing materials and reports

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Joint Fiscal Office Staff 1 Baldwin Street Tel
828-2295

• Fiscal Officer
• Stephen Klein
• House Appropriations
• Maria Belliveau Virginia (Ginny) Catone
• Senate Appropriations
• Stephanie Barrett Rebecca Buck
• House Ways and Means/Senate Finance
• Mark Perrault
• Sara Teachout

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Joint Fiscal Office Staff 1 Baldwin Street Tel
828-2295

• Health Care
• Steven Kappel
• Transportation
• Neil Schickner
• Capital Budgets/Revenue
• Catherine Benham
• Budget Systems
• Sandy Noyes
• Economic/Revenue Consultant
• Tom Kavet

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Key activities

• Staff support for Legislature
• Prepare budget bill supporting documents
• FY 2005 Budget Adjustment, FY 2006 Budget
• Develop revenue estimates in cooperation with the
  administration
• Prepare fiscal notes for bills
• Develop analytical materials for legislature
• Fiscal Facts (annual summary of fiscal info)

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Revenue Estimates and Funds The FY 2005 State
Budget

• in millions Approp Net
• General Fund 956 956
• Transportation Fund 222 222
• Education Fund 1,144 894
• Special Funds Other 415 329
• State Fund Total (Net) 2,737 2,401
• Less property tax EF 650m
  1,751
• Federal Funds 1,098 1098

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Revenue Estimates and Funds

• This presentation focuses on the
• The general fund
• The health access trust fund (A special fund)
• Education
• Transportation and capital spending
• Revenue forecasts - twice a year - January
  July.
• The legislature and executive each make an
  estimate. Then the Emergency Board (The Governor
  and the four legislative money committee chairs
  adopts a consensus figure.

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VT GF Budget Growth FY 2002-2005

• Year to year spending growth averaged 3.5 over
  past four years
• FY 2002 3.2
• FY 2003 2.8
• FY 2004 2.7
• FY 2005 5.1 Total spending 956 M
• FY 2005 Budget growth 5 overall but more than
  half was corrections and mental health spending
• Corrections Spending 8.8M 9.6
• Mental Health Spending 15.8M 26
• Other GF budget growth average 2.3

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Vermont Medicaid the Future

• Projected HATF balance and operating results
• 2004 25M fund balance
• 2005 Net deficit (15-20M)
• 2006 Operating deficit (60-70m)
• 2007 and beyond operating deficit grows at 18 -
  20m a year
• FY2004-FY2008 PATH only, State Dollars. Includes
  federal fiscal assistance does not include
  Medicare impact

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Education Fund

• Grand list growth exceeds expectations
• Good news Makes fund strong. State tax rates
  will likely drop below last year
• Concerns
• Is this a bubble ?
• Will lower taxes/ temporary fund strength result
  in higher spending by school districts and
  unsustainable state spending commitments?

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Transportation Fund Highlights

• Direct Transportation Spending grew from 128M in
  FY00 to 174M in FY05. Including Fed funds, FY
  2005 spending will be 359 M
• Key expenditures in FY 2005
• Paving 33M (Current condition preservation 93
  M)
• State Bridges 29M (Current condition
  preservation 59M)
• Town Programs 54M, Roadway 80M, DMV 20M,
  Maint. 53M
• Indirect expenditures (JTOC) is an additional
  40M
• Major Project demand exceeds available funds. FY
  05 project funds over 56M. 517 in remaining
  costs in major active projects alone
• Infrastructure is aging Estimated cost to
  re-deck bridges over 30 years old exceeds 1.0
  billion

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The Capital Conundrum 12/03Illustration only
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Vermont and National Context

• Vermont, like other states, is in a period of
  economic growth but will face ongoing budget
  pressures
• Risks include rising energy prices, global
  uncertainty, federal deficits, and the on-going
  war on terrorism
• FY 2006 Vermont Budget pressures are significant
• Federal budget reductions likely, including
  Housing, DET, Public Safety
• Corrections, Mental Health costs are growing
  rapidly
• Health care and Medicaid costs continue to rise
• Transportation, Capital needs are growing
• Vermont Begins FY 2005 with 8 total reserves
  One time resources yet ongoing problems.

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All State Year-End Balances As a Percentage of
General Fund Expenditures
49 states reporting for FY 2003-FY 2005. NCSL
10/04
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Net State Tax ChangesBy Year of Enactment,
1995-2004
For 2004, 47 states reporting (NCSL 10/04)
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Other State responses to Budget Shortfalls in FY
2005 (NCSL 10/04)

• Tapping a variety of state funds (22 states)
• Cutting spending (15 states)
• Tapping rainy day funds (10 states)
• Reducing the workforce or taking other actions
  affecting state employees (8 states)
• Using tobacco settlement funds (7 states)

Note 45 states reporting
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For Further Information, Contact The Legislative
Joint Fiscal Office One Baldwin Street
Montpelier Vermont802-828-2295http//www.leg.st
ate.vt.us/jfo