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Date: Wednesday, October 23, 2013Tuesday, November 5, 2013Sponsored by: Vermont Agency of Administration
Videoconferencing services provided by:Vermont Interactive Technologies
Moderated by: Jeb SpauldingSecretary of Administration
Presentation by: Jim ReardonCommissioner Department of Finance &
Management
VIT Live Streaming (without Chat feature): http//www.vitlink.org/streamingmedia/vtcvitopen.php
Budget Basics◦Where does the money come from?◦Where does the money go?
FY15 and Beyond◦The Budget Process◦The Next GF Budget Gap
Final Thoughts - Questions
The budget incorporates both the spending and the revenue sides of the fiscal equation.
Vermont has a very good base revenue projection process. But revenue changes will always be difficult …
Annual spending changes seem marginal – but the base will continue to be looked at …
Budget growth is ultimately a function of economic activity and personal income growth
What is the New Normal – constant fiscal pressure but a more volatile funding environment
Total was $4.1B in FY08 now to $5.2B in FY14 Average annual growth 3.6% since FY09
General Fund (GF) is now 26% of total (down from 30%) GF growth has averaged 3.4% since FY09
Federal Funds now 35% of total (up from 30%) Base Federal Fund growth has averaged 6.4% since FY09
Education Fund – local spending decisions – state fund pressure Transportation Fund – as system needs grow – constant revenue
challenge
Gross State Product avg. growth 1.3% (projected @ 3% in ’14)
General Fund 25.9%
Transportation Fund & TIB5.2%
Education Fund22.5%
Special funds5.1%
Healthcare funds5.9%
Federal Funds35.4%
FY14 Budget As Passed - All Sources of Funds = $5.23 Billion
Includes Net Ed Property Tax and Federal Funds
net edprop tax18.5%
K-12 Ed32.2%
Debt Service1.5%
Higher Ed1.6%
Natural Resources1.7%
Transportation11.8%
Corrections2.7%
Protection (All)5.5%
All Other5.3%
Medicaid+ 28.3%
Children & Families5.5%
Gen'l Gov't1.8%
Labor&Commerce&Devel.2.1%
FY14 Budget As Passed - All Funds Uses =$5.23 BillionIncludes Net Ed Property Tax and Federal Funds
K-12 Ed24.1%
Debt Service3.2%
Higher Ed3.5%
Natural Resources2.9%
Transportation10.0%
Corrections5.9%
Protection (All)9.1%
All Other3.4%
Medicaid+ 25.6%
Children & Families6.5%
Gen'l Gov't3.9%
Labor&Comerce&Devel.1.8%
FY14 Budget As Passed - All State Funds = $2.4 Billion Excludes Federal Funds and Net Ed Property Tax
K-12 Ed27.3%
Debt Service5.2%
Higher Ed6.2%
Natural Resources1.9%
Transportation0.0%
Corrections10.1%
Protection (All)8.8%
All Other3.5%
Medicaid+ 21.6%
Children & Families8.9%
Gen'l Gov't5.1%
Labor&Commerce&Devel.1.3%
FY14 Budget As Passed - General Fund = $1.355 Billion
Healthcare will continue to suck up a lot of oxygen – FMAP, Exchange, ‘17
Constrained fiscal environment ◦How to manage risk? Vision
The Budget Process
The Next GF Budget Gap
Governor goes first FY14 BAA
Executive Recommendations will be presented to House Appropriations Committee (HAC) in Dec.
Next Revenue Update will be in Jan. FY15 Budget will be presented in Jan.
Executive Budget InstructionsGovernors Initiatives usually tied to budgetAchieve balance across funds and demandsAll about the GF in the end
FY13 came in better than expected 50% to property tax relief25% to federal funds 25% to rainy day fund
FY15 Demand on the GF is higher than forecast revenue growth
$55M of one time resources balanced FY14
Retirement obligations
Pay Act costs – roll out plus new contract
Other Human Service Demands
Education Finance expectations
Debt Service
Technology Funding
Build Reserves - $12 million in rainy day fund
Capital Demands
Administration will need to balance demands to revenues available
No New Broad Based Revenue
Governor’s Strategic Planning
Performance Focus
Federal Funding Risks
FY15 No Medicaid/GC Reserve
Questions?
This presentation will be available at: http://finance.vermont.gov
Answer our survey. Go to http://www.surveymonkey.com/s/NW8528T