At the beginning of the session last month, one of the first daily riddles I shared in our committee was a simple question, “Why is it good to balance on your left foot on New Year’s Eve? Because that way you can start off the new year on the right foot.” Unfortunately, that didn’t happen Friday afternoon in the House Appropriations Committee when it gave preliminary approval to the session’s first significant bill (annual budget adjustment act or BAA for short) on a party line 7-4 vote.
This was following a partisan recommendation from the House Human Services Committee to include language in the BAA extending winter rules for the hotel voucher program until June 30. The winter rules essentially open available hotel rooms for the homeless without any limit on the number of days.
These changes reverse the agreement with the Legislature and the governor last year to end winter rules on March 31 and abide by the 80-day maximum period through the end of the fiscal year.
Additionally, the Democratic majority on the committee took $14 million that was earmarked for state bond repayments to fund several housing programs. Some may liken it to just keeping the credit card balance $14 million higher than it would have been in the governor’s proposed budget adjustment.
The annual BAA is essentially a “true-up” of various state programs and funds based on actuals for the first six months of the fiscal year. The largest item, for example, is to raise the appropriation in the Medicaid program, based on increases in health care costs or money needed to balance the books at the Vermont Veterans Home. Most of the changes proposed by the administration are shifting funds where we overestimated the need and added to those we previously underestimated. Including policy changes to the annual “true-up” bill is where it can get dicey.
The BAA was slated to get a final committee vote on Monday and will be up for a full House vote Thursday and Friday of this week. Unless changes are made prior to then, the governor, Republican House members and the Democratic leadership will be at odds, which may spell trouble for other major issues this session.
Last Tuesday, Governor Scott addressed a joint session of the House and Senate with an outline of his administration’s proposed state budget for the fiscal year beginning July 1. He used the opportunity to share his priorities and how they will fit into next year’s budget. His focus areas include education reform, housing, public safety and affordability. The nearly $9 billion (state and federal funds) spending plan has plenty for lawmakers to like and dislike.
His proposed budget allocates additional funding for several housing programs in addition to his call to reduce the regulatory burden for new developments. On the public safety front, he repeated the call to repeal the Raise the Age law, which increases the age allowing 19- and 20-year-olds to get charged as juveniles instead of adults. That law has been delayed the past few years.
On the affordability front, Scott took aim at several environmental laws previously enacted over his vetoes that will increase the cost of electricity and heating fuels. His administration will present proposals to either repeal or modify several climate laws in the coming week. He also proposed several tax breaks, including expanding the child tax credit to 6-year-olds, increasing the earned income tax credit for lower income families, eliminating the state income tax on veteran pensions (38 states do not tax them) and a slight increase in the income threshold to exempt social security benefits.
In the backdrop of the FY26 state budget is a growing concern over what the new U.S. president and Congress may do with federal funding to the states. With 36% of Vermont’s state revenue coming from Washington, D.C., any reduction could put additional pressure on programs and services here.
With education, Scott proposes setting aside $77 million to bring down this year’s estimated 6% average increase in property taxes as part of a transition proposal to lower the overall costs of Vermont’s K-12 education.
Meanwhile, details are starting to emerge on the governor’s proposed changes to our education system. A quick look at the numbers indicates that overall state spending would be lower by $184 million from current levels once the transformation is completed. Districts could still spend more but would have to raise the funds from local taxpayers, rather than the state. A NEA spokesperson was highly critical of the spending reduction, saying it would lead to massive layoffs.
As Scott said in his inaugural speech on Jan. 10, we are all on “Team Vermont” despite our differences. It is my sincere hope that legislative leaders recognize they need to find ways to include bi-partisan input on major bills this session and help get us back on the right foot!
Jim Harrison is the state representative for Chittenden, Killington, Mendon, and Pittsfield. He can be reached at JHarrison@leg.state.vt.us.
