State Bond Bank authorizes $13M in new municipal loans amid ongoing funding demand

During a recent House Appropriations meeting in Vermont, discussions highlighted significant financial efforts aimed at addressing municipal needs and hazard mitigation following recent disasters. The meeting, held on April 15, 2025, revealed a pressing gap of $124 million between state and municipal funding, with approximately $100 million of that attributed to municipal needs.

State Treasurer's initiatives have led to a total of $33 million in new lending to municipalities over the past two years. This includes a $15 million loan facilitated through the bond bank and an additional $5 million from the Emergency Relief and Assistance Fund (ERAF). Recent lending efforts also included a $13 million round, primarily funded by reimbursements from FEMA, which has allowed for a revolving loan fund to support municipalities.

Despite these efforts, the bond bank reported receiving around $30 million in loan applications, indicating a substantial unmet need for municipal cash. This reflects a consistent demand for financial support, similar to the $35 million in applications received after the 2023 disaster.

The meeting also addressed hazard mitigation funding, which is calculated at 15% of estimated damages from FEMA's public assistance program. With an estimated $815 million in damages, Vermont could potentially secure around $120 million for hazard mitigation efforts. Currently, over $70 million is locked in with FEMA, primarily funding the state’s hazard mitigation program.

A significant focus was placed on buyouts, with over 270 applications received, consuming the existing hazard mitigation funds. While some applications have been withdrawn, the interest in buyouts underscores the community's ongoing challenges in recovering from past disasters.

As Vermont continues to navigate these financial challenges, the discussions from this meeting reflect a commitment to addressing the needs of municipalities and enhancing the state's resilience against future hazards. The outcomes of these funding efforts will be crucial for supporting local communities and ensuring their recovery and preparedness.