NEAL P. GOSWAMI
BENNINGTON -- The state's finance commissioner says the Vermont Veterans Home must make internal adjustments before seeking additional state funding to address what the state believes is a $1.7 million budget deficit.
Home Administrator Melissa Jackson and Board of Trustees President Joseph L. Krawczyk Jr. said on Thursday that the home was taking steps to reduce spending and increase revenue. They said the budget gap for the current fiscal year ending in June was over $1 million and would likely require additional funding from the state to balance the books.
On Friday, Department of Finance and Management Commissioner James Reardon said he received more detailed financial information from officials at the home on Thursday. "I was aware that they were continuing to operate at a loss over the last several months but I didn't really have a concrete discussion until just recently," he said. "It appears that the budget gap may be closer to $1.7 million at this time."
Additional state funds will not be forthcoming at this point, Reardon said. Reardon, on behalf of Gov. Peter Shumlin, has already presented the annual budget adjustment recommendation to lawmakers. It does not include any relief for the home, he said.
"I think it's premature at this point in time to recommend any budget adjustment for the veterans home. In fact, in our budget instructions that we send out every year regarding the budget adjustment, we always put in bold that the first recourse is to redirect resources within your existing funding. I think we need to look at the veterans home and see what they can do to close that gap," Reardon said.
The home purposely kept the 150-bed facility's census low following a near-loss in September of its provider agreement with the Centers for Medicare and Medicaid Services. The federal funding from CMS, which accounts for the majority of the home's $19 million annual budget, was in jeopardy unless several deficiencies identified by state inspectors were corrected. The home passed a last-chance inspection in September but is now under closer scrutiny.
The census has dropped to 118 residents as the home focused on correcting the deficiencies and training staff. Reardon said efforts will now be made to bring the census closer to capacity. "We need to kind of think about trying to increase that census to generate more revenue," he said.
Expenses must also be reduced, though. Reardon said variable costs, including food, should have decreased with the census. Other efforts will be made to ensure the home is receiving payment from federal insurance programs for residents as warranted.
"I think we need to first of all look at ways to close that gap internally at the Vermont Veterans Home before we start a discussion about providing any further relief," he said. "I don't think we've done all of our homework that is necessary."
Reardon said it is likely the home will close the fiscal year at the end of June with a loss on the books, which is allowed under state law.
"I think it will be very difficult to close that gap between now and the end of the fiscal year," he said. "We're taking this seriously. It is a concern to myself and other members of the administration. We're going to look at ways to close that gap and put the home on a financially sustainable path and we're going to be doing that in the near term. As a result of that, we will then determine what are the next appropriate steps. We're just not there yet."
The administration could still seek additional funding for the home in next year's state budget, according to Reardon, if work on the budget adjustment for the current fiscal year is completed before a review of the home's finances is complete. Reardon said such a move is not unprecedented. Any language in next year's budget would be retroactive to this fiscal year, he said.
Meanwhile, Reardon said he maintains full confidence in the leadership team in place at the home.
"I'm absolutely confident with the management down there. Melissa and Joe, the new incoming board president, have some pretty significant challenges that, quite frankly, aren't always within their control," Reardon said. "I have confidence in Joe as the president of the board and Melissa Jackson as the administrator."