VT Budget Picture DRAFT

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VT Budget PictureDRAFT

• January 23, 2009
• Prepared by the Joint Fiscal Office

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The State Budget - Context

• So How Big is the Budget?
• Once duplications are accounted for
• Total Real Budget 4.3 Billion
• Which breaks down by funding sources as follows
• Federal Funds 1.3 B 30.2
• General Fund 1.2 B 27.9
• Education Fund 1.0 B 23.3
• Transportation Fund 215 M 5.0
• Special Funds 450 M 10.5
• Restricted 66 M 1.5
• The focus of this presentation is the General
  Fund and Transportation Fund

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To the extent that any category is held harmless
from changes i.e. untouchable the universe
within which you can achieve savings is that much
smaller
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We Are In The Midst Of A Downturn, and Face
Issues Both Cyclical and Structural

• Cyclical In that revenue has and continues to
  fall as we go through the economic downturn that
  is impacting Vermont and the Nation We hope
  that, as the next slide indicates, revenue
  returns after a period of years so part of the
  shortfall is a temporary cyclical shortfall
• Structural In that we face some structural
  areas where spending exceeds revenue on a
  permanent basis

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General Fund - FY 2009 to date Our Current
Economic Erosion

• Jan 2008 General Fund FY 2009 Sources 1,238.4m
• April 08 Downgrade of (24 m)
• July 08 Downgrade of (24 m)
• Nov. 08 Downgrade of (36.8m)
• Jan. 09 Downgrade of (10 m)
• Total Downgrades to date (95.2m)
• April 08 Adjustments (24 m)
• Aug. 08 Rescission (24 m)
• Dec. 08 Rescission (19.7m)
• Jan. 09 Admin proposed adjustment 16.8m
• Total Adjustments/Rescissions Since Jan 08
  (50.8m)
• FY 2009 Gap (January 09) (44.4 M)

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The Problem Solutions?

• Cyclical Structural Gaps FY09-FY13 - After
  67.6 million of adjustments and reductions in
  FY09
• 5-Yr Cumulative Gap - mostly cyclical (624 M)
• 5- Yr Medicaid/Catamount need (376 M)
• 5-Yr Cumulative Gap including Medicaid (1.0 B)
• Federal Help? These are estimates of the portion
  of federal stimulus proposals that are likely to
  impact the state General Fund directly.
  Proposals include provisions that impact non-GF
  areas of the state budget in addition to these
  estimates. Actual VT impact will depend on size,
  details, strings etc. that are included in what
  is eventually enacted.
• Medicaid portion of Jan. 09 E-Board FF forecast
  175m
• US House Stimulus Proposal (budget impact est.)
  250m
• Solutions
• Reductions realignments consolidations base
  savings
• Revenue - temporary is cyclical or on-going is
  structural
• Use of Reserves or other funds one-time only
• Other ?

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Transportation Structural Gap

• Current infrastructure preservation need
  
• FY09-FY14
• Annual Need 414m
  2,070m
• Available-FY08 211m 1,055m
• Annual Gap 203m 1,015m
• Federal Help
• Forecast 87.5m/yr 175m over two years
  
• Scenario II 101m/yr 202m over two years
• The federal help could be higher, but even if
  that is so it will only help us bridge our gap
  for a few years the underlying annual
  infrastructure gap remains.