Date: Wednesday, October 23, 2013 Tuesday, November 5, 2013 Sponsored by: Vermont Agency of Administration Videoconferencing services provided by: Vermont Interactive Technologies

Moderated by: Jeb Spaulding Secretary of Administration Presentation by: Jim Reardon Commissioner Department of Finance & Management VIT Live Streaming (without Chat feature): http// 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% 3% in ’14)

 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 Instructions Governors Initiatives usually tied to budget Achieve balance across funds and demands All about the GF in the end

FY13 came in better than expected 50% to property tax relief 25% 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:  Answer our survey.  Go to