- Associated Press - Thursday, March 20, 2014

MONTPELIER, Vt. (AP) - Budget writers in the Vermont House were deep into the homestretch Thursday on crafting a spending plan for the next fiscal year and, as in the past, some of the toughest decisions appeared to center on the last 1 percent.

Vermont will end up with a general fund budget of about $1.4 billion, lawmakers said, but the focus in the House Appropriations Committee on Thursday was on $14 million.

Gov. Peter Shumlin this year asked for $14 million in new spending, to be paid for with a tax on health insurance claims. The tax-writing House Ways and Means Committee decided it didn’t want to raise that tax, so the Appropriations Committee was left to try to find $14 million in cuts.

By the end of the day Thursday, $8.4 million was the total cost of items that remained on a combination of the governor’s wish list and the committee’s. Rep. Martha Heath, D-Westford, the panel’s chairwoman, said it would begin Friday with about $3.4 million left to allocate to cover those needs.

Hanging in the balance would be items ranging from $360,000 for increased child care subsidies for low-income working families to a 2 percent increase in funding for the nonprofit regional agencies contracted to provide mental health services around Vermont.

The $3.4 million left to allocate on Friday depended on an agreement from the Ways and Means Committee that it would raise about $4.4 million in new taxes. Among the candidates for tax increases: a $1 per pack increase in the tax on cigarettes, or lifting the exemptions from Vermont’s 6 percent sales tax on soda or dietary supplements.

Lawmakers said the budget process is unusually tough this year, because the burst of federal funding designed to lift the nation out of the recent recession had dried up, and opportunities for moving money around from under-used state funds was used in recent years.

“It makes you want to cry,” Rep. Kathy Keenan, D-St. Albans, said as she perused the list of remaining programs that likely would go unfunded.

Lawmakers expressed concern that a decision to provide most of a 2 percent increase for Medicaid, part of which would boost funding for the regional mental health agencies, could soak up most of the $3.4 million. But language in last year’s budget bill left the agencies to believe they would see an increase, said Rep. Ann Manwaring, D-Wilmington.

Among other items still on the oversubscribed wish lists of the governor and lawmakers:

- A 2 percent increase in funding for the University of Vermont and state colleges, to take effect for the second half of the coming fiscal year in January;

-Two-percent increases for Vermont Public Television, the Vermont Council on the Arts, Vermont Symphony, Vermont Historical Society and Vermont Humanities Council.

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