Gov. Peter Shumlin set out his budget priorities on Wednesday, which include more funding for higher education, fighting poverty, drug treatment and transportation, and include $19 million to extend improvements for a western rail corridor which would include Bennington.

The $1.44 billion proposal for the state fiscal 2015 budget, which would take effect in July, is up 3.56 percent over the current budget.

Shumlin, a Democrat, told the legislature that this, his fourth budget as governor, is "balanced and fiscally restrained."

"It invests in areas critical to our most vulnerable and to our future job growth, while rejecting broad-based tax increases on hardworking Vermonters. It keeps our reserves full, and our pension contributions funded at the recommended levels," he said. "It matches Montpelier's appetite for spending with Vermonters' ability to pay."

One budget proposal quite relevant to Bennington County is rail service in the western corridor of the state. "On rail, we took a giant leap forward when we secured another federal grant of $9 million to fund the rebirth of the western corridor," Shumlin said.

"Our rail team is moving projects faster than ever to connect downtown Burlington to Rutland to Bennington to Albany, and on to New York City," he said. "My budget proposes $19 million to extend these improvements, bringing us closer to our goal of growing jobs and economic opportunity by delivering better freight and passenger rail service up and down the western side of Vermont."

Shumlin touted that "good things are happening all across our great state. Vermont's unemployment rate is the fifth lowest in America, and the lowest this side of the Mississippi."

He continued, "Jobs have rebounded from the depths of the recession, with over 11,000 new jobs created since I first spoke to you three years ago. In the last year alone, we have seen 2,000 jobs created in our manufacturing and professional services sectors, with our wages rising faster than inflation."

Shumlin said there will be $71 million gap between projected revenues and spending which will require "discipline" to meet. Stimulus money from the Obama administration in Washington is now finished and the political tide has turned.

"That funding is now over. Instead Washington is now cutting back on key programs that help our most vulnerable," Shumlin said. "But the good news is that as we have been creating jobs, our General Fund revenues have been recovering, up $178 million in the past three years and projected to be more than $250 million after this next fiscal year.

"So our challenge in balancing the budget is not to eviscerate worthwhile programs serving Vermonters, but instead to curb the rate of growth and bring our programs back in line with our revenue," he said.

Instead of relying on $44 to $55 million in one-time funds as in the past to balance the books, this budget will rely on only $30 million in one-time funds, about half of the amount last year, he said.

Scott responds

Lt. Gov. Phil Scott, a Republican, said in a statement after Shumlin's address that he found encouraging "the increase in transportation infrastructure funding, the downtown tax credits and increases to the Regional Development Corporations and Small Business Development Center."

Scott said he did "have many questions about the sources of revenue that will be tapped to pay for the increased spending proposals the governor laid out. Items such as the 9 percent increase for VHCB (the Vermont Housing and Conservation Board) and the $35 million in the transportation bill, amongst many others, are big ticket items and it isn't clear how we're going to pay for them.

"I also wonder how the $71 million budget gap was filled when you consider the additional spending coupled with the governor's promise to not increase taxes," Scott said.

While he agrees with the governor's supportive words in the address "on economic competitiveness, pension reform and property taxes, I'm disappointed that he didn't offer any new proposals to address those critical issues," Scott said.

"Last week, the governor laid out a bold plan to address opiate addiction. I was hoping today we would hear an equally bold plan to address our economic problems. We simply can't afford to wait any longer to prioritize work on these issues."

Here are some of the spending priorities Shumlin set out in the budget address:

Education

The budget includes a 2-percent increase beginning in January 2015 for state colleges and the University of Vermont, the second consecutive increase after five years of level funding.

Shumlin addressed the issue of local property taxes throughout the state to support schools. The state this year increased the potion of the sales an use tax going to the education fund, adding $9.5 million to help keep property taxes lower. His budget proposal fully funds the required transfer to the education fund in 2015, he said.

"While I am incredibly proud of the progress we have made together on education, I am not at all happy that Vermonters will once again bear an increase of 5 to 7 cents in the statewide property tax rate next year based upon projections for local school spending," he said, noting that the overall student population continues to decline. "I urge Vermonters at town meetings across our state this year to carefully scrutinize school budgets that increase per pupil spending and grow faster than our incomes. Look hard to see if you can achieve savings for better outcomes at a lower cost."

Poverty

"In these challenging times, as the federal government continues to make shortsighted cuts that hurt our most vulnerable, our state must do what we can to blunt the damage by allocating our limited resources wisely," Shumlin said.

Increases include doubling the Vermont Rental Subsidy to $1 million, with $200,000 in additional funds for Family Supportive Housing, to help prevent homelessness; an increase of $300,000 for the Emergency Solutions Grant to help support homeless shelters; increased support for children, including $800,000 to quality childcare centers; and an additional $740,000 for families in need; and an increase of $650,000 in funds for substance abuse and mental health treatment services for Reach Up recipients.

The budget proposal pays for these increases from growth of the property transfer tax and the base general funds without program cuts.

Drug abuse and health care

"I have also included in this budget new funding to support the ambitious drug abuse prevention and treatment agenda I laid out for you last week," Shumlin said. "We are also on track to create the best community-based mental health care system in the country."

In his State of the State address last week, Shumlin proposed more than $1 million of additional support for treatment and recovery.

"We will also continue to push for the best health care system in the nation," he said. My budget proposes a 2 percent increase in Medicaid reimbursement rates starting in 2015 for our hardworking providers, to help reduce the cost-shift for those of us who pay private insurance."

Regarding trouble with Vermont's rollout of the federally mandated health exchange, Shumlin said "I am very disappointed, and I take responsibility for it. But the difficult rollout of the exchanges here and across America should remind us once again that we need -- we deserve -- and we can have -- simple, universal, affordable, comprehensive health care for all, where costs are sustainable and access to quality care is guaranteed because you are a Vermonter."

Economic development

On economic development, Shumlin's budget includes 9 percent in increased funding to the state's regional development corporations, the Vermont Employee Ownership Center, and the Small Business Development Center. The proposed budget also provides $3.3 million of support through the Next Generation Fund; expands the Registered Apprenticeship program and the On-the-Job-Training program. After citing such tech and manufacturing firms in Vermont as Global Z, BioTek and Green Mountain Digital, Shumlin said he wants his administration to work with the legislature "on further ways to encourage and grow technology development leading to even more manufacturing and job growth right here in Vermont."

The proposed budget also includes an additional $500,000 in downtown tax credits; a 9 percent increase for the Vermont Housing and Conservation Board; and an additional $1.1 million to support improving Vermont water quality. "We also recognize the tremendous scenic, cultural, environmental, recreational, and economic impact of our Working Lands initiative by for the first time including its funding in the base budget, with a 5 percent increase," Shumlin said.

The governor's budget proposal includes $686 million for transportation, an increase of $33 million from last year, what he called the biggest investment in transportation in state history. This funding would repair or replace more than 100 bridges, perform preventive maintenance on dozens of more structures, expand car and van pooling and the bus network, pave 300 miles of roads and support the establishment of a "Green Highway -- with electric vehicle charging stations connecting Montreal to Montpelier, and beyond in New England."

Material from the Associated Press was used in this report.

Reach Mark Rondeau at mrondeau@benningtonbanner.com. Twitter: @banner_religion