- Associated Press - Thursday, January 23, 2014

MONTPELIER, Vt. (AP) - The Vermont House gave preliminary approval Thursday to a midyear budget adjustment bill that relies on higher-than-expected state revenues and reserve funds to boost spending for Medicaid and housing programs.

The Budget Adjustment Act is a regular mid-winter exercise in Montpelier, as lawmakers adjust spending to respond to needs for more - and occasionally less - spending for various state programs that have been spotted in the first six months of the July-to-June fiscal year.

In the latter category this year is reduced demand on the state’s Reach-Up welfare-to-work program, where enrollment is down from the 6,700 households projected for fiscal 2014 to about 6,300 - a savings of nearly $600,000.

Larger upward pressure - for Medicaid, emergency housing to stem homelessness and more out-of-state prison beds to make room in Vermont prisons for pre-trial detainees - are being covered by revenues coming in at a slightly faster clip than had been forecast.

In all, the bill advanced on a voice vote Thursday will increase general fund spending - that’s for most state programs with the big exceptions being education and transportation - by about $12.3 million over the $1.36 billion approved last spring.

The measure approved Thursday would take about $3.4 million of that increase from a so-called “rainy-day fund.” But Rep. Martha Heath, chairwoman of the House Appropriations Committee, said an amendment to be offered Friday would reduce that amount by $1 million. That’s thanks to some revenue from the state’s property transfer tax that had been overlooked previously.

The only debate on Thursday came on an unsuccessful amendment by Rep. Mark Higley, R-Lowell, who tried to strike $500,000 set aside to pay for furniture and other furnishings for the state Agency of Education after it moves from its current quarters in Montpelier to new offices in nearby Barre.

Higley argued in an interview that such an expenditure should be included in the main budget bill that lawmakers pass later in the spring. “A lot of things seem to be coming through the Budget Adjustment Act now that should be done through the regular budget process,” he said. He added that the money already had been spent, effectively borrowed from special education funds that come from Medicaid, and that lawmakers were now looking to fill the gap.

Higley’s amendment said the Education Agency’s existing furniture could be moved to Barre and used for a year, a provision that bothered Heath. She argued that the furniture had been bought with the Montpelier office spaces in mind, and that it would be needed there when new occupants move into those offices.

“It doesn’t make common sense to move that furniture and then move it back when it’s likely needed where it is now,” she said.

Higley’s amendment was voted down and the bill advanced, both on voice votes.