Budget challenges likely to be top issue for 2015 Vermont Legislature

The top Republican leader in the Vermont Senate says he thinks the only way the state can close a budget deficit forecast of $100 million for the next fiscal year is by cutting spending and seeking new sources of revenue.

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Senate Minority Leader Joe Benning, R-Caledonia, said Friday he doesn't want to consider new taxes, but he sees no other option.

"I absolutely, positively hate to raise taxes, but what we've got for a fiscal mess right now, I'm not sure how we're going to get out of it because you can't simply cut everything," Benning said. "That's going to force us to look for new ways to get revenue."

The Legislature returns to Montpelier on Wednesday for the start of its 2015 session.

Lawmakers agree that state finances are expected to be one of the top issues this year. The state faces an unexpected $17 million shortfall in this year's budget and a projected $100 million gap in the next fiscal year.

In addition to the budget, lawmakers are expected to focus on education reform to help reduce property tax growth, reforms to the state's child welfare system in the aftermath of the deaths of two toddlers, the clean-up of Lake Champlain, and energy issues, among others.

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"We've got a very challenging session ahead," Democratic Gov. Peter Shumlin said at a Tuesday news conference in Montpelier.

Shumlin said the shortfall arose when state growth figures came in less than anticipated. An original estimate of 5 percent growth now looks like it will come in around 3 percent, he said.

"As you know, our spending is rising faster than our economy and therefore our revenues," Shumlin said.

Shumlin said his staff is working on a budget that will be presented in the next couple of weeks.

"We're going to need everybody to help. You can't fix a structural deficit like the one we have or make progress toward fixing it if you don't ask for shared sacrifice," he said.

He wouldn't rule out a tax increase.

"I have always tried very hard to solve our budget problem without raising income tax rates, sales tax rates, and rooms and meals tax rates," Shumlin said. "I am trying to do that again."

House Speaker Shap Smith, D-Morristown, and Sen. President Pro Tem, John Campbell, D-Windsor, didn't return calls seeking comment.

Rep. Don Turner, R-Milton, the House minority leader, also said he sees the state's finances as one of the top issues facing the Legislature. He thinks House committees should look at the state agencies and departments they oversee to determine if budget savings can be found.

"I think it's vitally important that we get the Legislature more engaged in state spending," Turner said.

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Associated Press writer Lisa Rathke contributed to this report.