Vermont Gov. Peter Shumlin reached a deal Aug. 13 to cut about 2% from expenditures in the state's current budget.
General Fund revenues have come in lower than expected in three of the last four months. State government now believes that revenues for the fiscal year that started July 1 will increase 3% from last fiscal year, rather than increase 4.8%, as had been budgeted.
On Aug. 11 Shumlin recommended $31 million in budget cuts to be sure the state ended with a balanced budget. The General Assembly's Joint Fiscal Committee on Wednesday rejected Shumlin's proposal.
However, after the committee and the governor reached an agreement to change about $1 million of the cuts, the two sides reached an agreement on a new $31 million deal.
"We have moved quickly to propose fiscally responsible adjustments to keep the state budget balanced, without raising taxes on hardworking Vermonters," Shumlin said on Aug. 11. The cuts do not affect the state's stabilization fund.
"Available General Fund revenues have increased from the bottom of the last recession by close to $300 million to the highest level in state history and are projected to increase by another $40 million this year," Shumlin said.
The cut was made partly by stabilizing funding for the state's university and state colleges rather than increasing it, as had been budgeted. The state will also keep the Medicaid provider rate stable instead of increasing it, as had been budgeted.
Vermont is rated Aaa by Moody's Investors Service, AA-plus by Standard & Poor's, and AAA by Fitch Ratings.
