Joint Fiscal Committee holds large portions of Act 113 open, flags federal‑fund cut triggers and technical fixes

The Joint Fiscal Committee on Wednesday reviewed the senate version of the fiscal year budget bill (Act 113) and left multiple sections open for further work, saying staff would incorporate technical corrections from the administration and clarify how federal funding reductions would trigger statewide spending changes.

Grady Nixon, a fiscal analyst with the Joint Fiscal Office, told committee members the document under review should be 102 pages and includes both technical edits recommended by the administration and a set of items with “outstanding questions.” “There are a number of proposed changes that the Joint Fiscal Office has reviewed and determined to be technical in nature and then some that we saw some outstanding questions on,” Nixon said.

The committee closed routine annual sections but kept open several substantive provisions pending clarification. Members specifically asked staff to revisit language on: the fiscal‑year closeout, cash‑fund appropriations, a transfer from a transportation fund to the TIP fund that the house reduced from $2.3 million to $900,000 (creating a $1.4 million difference flagged for explanation), and one‑time appropriations that overlap with earlier budget‑adjustment language.

Committee members discussed a house change that reduced a planned transfer to the TIP fund and noted uncertainty about the source of the $1.4 million that became available for a one‑time appropriation for electric vehicle supply equipment. Nixon said the house’s lower transfer “left $1,400,000 in the transportation fund that could then be used for electric vehicle supply equipment,” and the committee asked staff to track where that amount originated.

Lawmakers also reviewed several one‑time appropriations and pilot funds that the house had altered, including: - $1.8 million for local economic damage grants for flood‑impacted communities (Addison County and others affected in 2023 and 2024); - reductions to a treasurer appropriation from $14 million to $4 million in one item referenced in the second budget adjustment; - $2.8 million for a developmentally disabled housing pilot (BACB) and $850,000 for judiciary network security and bathroom upgrades; and - a $1,000,000 pilot municipal stabilization appropriation for flood‑prone property assistance and related municipal programs.

The committee also reviewed reporting and oversight provisions. It kept open a January 15, 2026 deadline for a comprehensive report from the secretary of administration on the funding structure for Vermont community‑based organizations, and it asked staff to draft language requiring reporting on any reductions to anticipated federal revenues and the status of appropriations affected by such reductions.

A central policy issue drew sustained attention: how the bill would treat reductions in federal funds and who could act when federal funding drops. The house added language that would require Joint Fiscal Committee approval and, in some cases, Emergency Board review before the administration could unilaterally implement spending changes triggered by a 1% or larger reduction in total anticipated federal funds. Committee members pressed for clearer triggers and for language specifying whether the trigger is a congressional action, a formal federal notice, or a later budget outcome (for example, an October federal budget action), and whether cumulative reductions should count toward the threshold.

The committee also discussed the general fund balance reserve. Staff explained proposed language that would allow the Emergency Board, while the General Assembly is not in session, to unreserve and make available up to 10% of the reserved balance to respond to declared emergencies or reductions in revenue or federal funding. Members flagged interplay between that language and existing statute that allocates closeout flows, including the statutory 50% split to stabilization reserve and pensions (section 308(c)), and asked staff to identify statutory conflicts.

Other items left open or flagged for follow‑up included: reporting requirements on use and obligation of ARPA funds; a provision allowing the secretary of administration to reimburse up to $14.3 million in prior federal funds expended through ERAP contingent on Joint Fiscal Committee approval; treasurer‑requested technical updates to the Vermont State‑savings programs and VPIC contribution amounts (the house set a $250,000 contribution figure that some members questioned); and position and personnel language establishing or extending permanent and limited‑service positions in multiple agencies.

Committee staff were directed to incorporate the administration’s technical letter where appropriate, to draft clarified language on federal‑fund triggers and cumulative reductions, and to return with updated section text. The committee did not take formal votes on bill passage during the session; instead, members repeatedly instructed staff to “leave sections open” or “close” routine annual items and to prepare revised text for future consideration.

The committee’s next steps include staff redrafts reflecting the technical letter and members’ requested clarifications, additional information from the administration on the transportation transfer and flood‑grant funding sources, and follow‑up with the treasurer’s office on VPIC contribution language. A number of provisions will remain open until those clarifications are supplied.