When Gov. Peter Shumlin last month announced a $31 million revenue downgrade, he sought to put into perspective the magnitude of the cuts that would be required to balance the state budget.
“In the big picture, this is a relatively minor adjustment to a $1.4 billion general fund budget,” Shumlin said back on July 24.
But for the human services agencies targeted for reductions in the governor’s rescission plan, the potential impacts don’t feel so manageable.
At a public hearing at the Statehouse Tuesday evening, advocates warned a panel of lawmakers of the adversities that will befall their clients if the cuts are approved. And they lamented the disproportionate toll of this budget-reduction exercise on the Agency of Human Services.
“It always seems that the folks that need the most assistance to alleviate harmful circumstances, or help in strengthening their families, get hit the hardest,” said Karen Lafayette, a legislative liaison for the Vermont Low Income Advocacy Council.
Lafayette and other said proposed cuts in reimbursements rates to Medicaid providers will break budgets at the scores of service organizations that had rely heavily on those funds. Dan Quinn, president of Rutland County Mental Health Services, said his organization derives 90 percent of its revenue from Medicaid payments. And he said the reductions in those payments would exacerbate an already meager wage scale that has led to 25 percent annual turnover and a high staff vacancy rate.
Lawmakers approved a 1.6 percent increase in Medicaid reimbursement rates back in May. The increased rates took effect July 1; the governor’s plan would rescind the higher payment rates for the remainder of the fiscal year.
Julie Tessler, executive director of the Vermont Council of Developmental and Mental Health Services, says the governor’s plan would cut $6 million from agencies, like Quinn’s, that oversee community-based care for about 50,000 elderly, disabled and mentally ill Vermonters.
“That system of care has been under severe stress, trying to meet the needs of people’s severe and persistent mental illness,” Tessler says. “This is the wrong time to back up on that commitment.”
Tessler says the cuts, which would affect substance abuse programs, will also erode a system of outpatient care designed to relieve pressure on inpatient treatment facilities already struggling to keep pace with demand.
It’s a concern shared by hospital executives, who worry their emergency room departments could be inundated with psychiatric patients who might have otherwise gotten help from community-based centers.
Hospitals too will suffer financially as a result of a Medicaid reimbursement reduction that will cut about $8 million in total.
Bea Grause, executive director of the Vermont Association of Hospitals and Health Systems, says the Medicaid cuts will necessitate a cost shift that would mean higher rates for people with private insurance. And she says it’s an unsettling omen of how precarious funding for medical care might become under the single-payer proposal being pursued by Shumlin.
“I think it also raises the concern about the potential sustainability of Green Mountain Care, and having the state in charge of the entire health care system when there isn’t a system to guarantee stable funding,” Grause says.
Sarah Launderville, executive director of the Vermont Center for Independent Living, says the reduction plan would also take money from a special grant program designed to improve living conditions for disabled Vermonters.
“So somebody who has multiple sclerosis, we might pay for an air conditioner, so that somebody can breathe easily in their home, or wheelchair repair,” Launderville said.
The rescission plan would mean a 1 percent cut in funding for state colleges and the University of Vermont, a move higher education officials say will increase tuition rates already among the highest in the nation.
Lawmakers are scheduled to vote on the governor’s plan later today. But advocates say more time is needed to vet the impact of the proposal, and urged the Legislature’s Joint Fiscal Committee to delay action.
Shumlin has said he won't consider raising taxes to avert the need for cuts, and lawmakers, even if they're so inclined, wouldn't be able to raise revenues until the full Legislature reconvenes in January. But advocates say that does not mean they shouldn't consider revenue increases as a mean of filling at least a portion of the $31 million shortfall.
This story was edited at 8:55 a.m. Wednesday
