Towns in limbo as road funds are frozen

MONTPELIER — $6.2 million in transportation payments that local towns anticipated in mid-January are being frozen as a result of budget-cutting negotiations among the administration of Gov. James Douglas, the Agency of Transportation and a key committee representing both branches of the Vermont legislature.
Those payments, plus another round due in April, could still be made in full at a later date or could be reduced, according to state officials. Their size and timing depends on a number of in-state factors, including the health of January tax revenue figures and ongoing negotiations between the state’s Republican governor and Democrat-controlled Legislature.
State officials also hope the administration of incoming President Barack Obama moves quickly with an economic stimulus package that could include funds for local transportation projects.
Rep. David Sharpe (D-Bristol) said joint fiscal committee member Shap Smith — the Democratic nominee for speaker of the Vermont house — told him that hopes for local transportation money in such a stimulus package was the single biggest reason for an agreement to freeze January’s Agency of Transportation highway grant payments.
Without such an agreement, there are no guarantees the payments will be made in full, according to Sharpe, a member of the House Ways and Means Committee.
“He said the primary reason behind the postponement is … we’re hoping for some support from the federal government,” Sharpe said. “If that’s not forthcoming, then all bets are off, I guess.”
Sharpe is not fully optimistic about the forecast for January revenue figures, and said the overall state budget picture is not pretty. Cuts will have to be made somewhere, he said, and could still be made in quarterly highway payments that are due not only in January, but also in April.
“The state is in really dire financial straits,” he said.
At stake are quarterly January and April payments that in Addison County range from about $6,900 in Goshen to almost $42,000 in Middlebury.
One who is more optimistic about the payments coming through is Neil Schickner, the transportation policy analyst for the Legislature’s Joint Fiscal Office, who said he believed legislators supported funding most or all of them.
He noted that the Legislature’s Joint Fiscal Committee — which represents the Legislature in money matters when it is not in session — opposed a proposal by the Agency of Transportation and Gov. Douglas’s office to cut $1.8 million from the $25.8 million of highway payments.
Schickner expects any cuts to be modest because lawmakers do not want to see local property taxpayers have to pick up the tab next year.
“The (Joint Fiscal Committee) rejected the agency’s recommendation because they didn’t want to see the towns taking that big a hit,” he said.
Regardless of the eventual outcome of the debate on the highway cuts and other elements in the state, the timing is awkward for towns.
While the legislature waits for Obama, who won’t be inaugurated until Jan. 20, selectmen are trying to finalize town budgets that must be legally warned for Town Meeting Day in March, and they are also trying to meet publishing dates for town reports that typically include proposed budgets. Usually, selectboards try to finalize their budgets by the end of January, and are often able to complete those tasks in December.
Ferrisburgh, for example, had just about finished work in mid-December on a budget that would have increased spending by only $2,000 over the current fiscal year, to about $1.47 million before voter-approved donations. Selectmen were happy with their spending plan, but are now unsure of their next step because of the uncertainty over the fate of Ferrisburgh’s originally projected $39,000 January and April transportation payments.
Chairwoman Loretta Lawrence said the board will sit down in early January and rethink its options, probably with the assumption that much of the money won’t be there. Like some other boards in the current economic climate, Ferrisburgh selectmen are hoping to hold the line this year.
“We’re going to look at the whole budget, especially the highway budget,” she said. “We really don’t want to go back to the taxpayers with another increase given the economic situation.”
Local selectboards could be left to make their best guesses about their revenues for the rest of this fiscal year. Schickner acknowledged that it could be February before lawmakers agree on a bill to release highway funds, although he said a quick resolution remains possible.
“They could, when they convene, push through a bill,” Schickner said.
Meanwhile, town officials will feel their way along during their budget process. As Lawrence noted, Ferrisburgh has plenty of company in this dilemma.
“We always like to be able to tell our taxpayers exactly where we are,” she said. “But this is a unique situation, where anything is possible.”

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