Legislative Update 1/23/2024
As you might expect, much of the focus in Montpelier is on budgets, both current and upcoming. The Legislature has always passed a balanced budget and last year was and, this year will be, no exception. We’ve learned that General Fund revenues are a little higher than were projected, so that side of the balance sheet looks good.
This week the House will be voting on the annual Budget Adjustment Act (BAA) which is the midyear “true-up” of the current budget. Projected revenues may vary: some allocated money doesn’t get spent and some emergency spending, like flood relief, needs to be balanced out. All committees have submitted their suggestions, and with the ongoing housing crisis, much of the available revenue is going into housing of various kinds.
Allocations in the BAA include $30 million in “seed money” for affordable housing, and $25 million for a middle-income housing program. The majority of both allocations depend on additional ARPA money being reassigned when and if it goes unspent in other programs. An additional $17 million goes to housing homeless people and restructuring the hotel voucher program. A smaller amount is earmarked for rental assistance programs, to help those people who do have housing to stay in it. Also included is $10 million in additional flood relief.
Anticipating sharply rising education costs, school boards around the state are doing their best to pare back spending, but the cost drivers are many, not within school boards’ control, and are kind of a “perfect storm” of factors:
School maintenance & construction; PCB, lead, and PFAS abatement - Schools need to be safe places for students to spend their days.
Student post-pandemic needs - schools have taken on more and more social services simply to get students ready to learn.
Teacher and staff shortages - this is at crisis level, from administrators to bus drivers
Staff health care costs - up 16% this year
Inflation pressures - transportation, heating, supplies and just about everything.
Revised “student weighting” in the funding formulas, reflecting the higher costs of educating some categories of students. These costs will impact different district differently.
Revenues - during the pandemic, tax revenues were high due to increased spending (remember those stimulus checks?) which drove down projected tax increases. Reserves set aside at that time are inadequate to drive down current increases.
Common Level of Appraisal - this is a bit of a paradox because the strong real estate market drives up Grand List values, which in turn decreases the tax rate. However, wildly skewed CLAs in many towns drive those tax rates back up.
The legislature is looking hard at ways to temper increasing costs. These trends are not unique to Vermont - they are happening across the country in red, blue, and purple states. Next week I will discuss some of the positive steps we are taking.
It is my honor to serve the constituents of our district.
Please contact me with concerns and ideas: rchesnut-tangerman@leg.state.vt.us