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Vermont education leaders warn reconciliation, delayed FY25 allocations could affect Medicaid-funded school services
Summary
At the April 10 committee, Agency of Education officials said federal continuing resolutions and budget reconciliation debates have delayed FY25 allocations and created concern that changes to Medicaid could reduce funding that covers school-based health and special-education services.
State education officials told the Senate Education Committee on April 10 that delayed federal allocations and the ongoing congressional reconciliation process pose risks to services funded partly through Medicaid and other federal programs.
Deputy Secretary Jill Brooks Campbell said the agency has not yet received preliminary FY25 allocations for many federal education grants (for example Title I, IDEA and Perkins) and that continuing resolutions have complicated the normal distribution cadence. She warned the bigger uncertainty is the reconciliation legislation in Congress, which could alter Medicaid and other programs that have downstream effects on education funding.
"We have two Medicaid programs," Campbell said. "School-based Medicaid, which is primarily used for services to pay for services for students on IEPs who are eligible for those services... mental health, psychologists, physical health doctors, speech therapy, occupational therapy." Campbell and other agency staff said Vermont also receives federal reimbursements tied to Medicaid eligibility counts; changes to Medicaid eligibility or state matching shares could reduce reimbursements and increase pressure on local and state budgets.
The agency explained the difference between discretionary education funding (annual appropriations with a ceiling) and entitlement programs such as Medicaid and child nutrition, which are driven by participation and have different funding mechanics. Officials said a substantial reconciliation-driven change to Medicaid — for example, raising the state share — would have a material fiscal effect on state and local education budgets and on services for students who rely on school-based therapies.
Staff also noted a timing dynamic that could reduce short-term harm: children who are identified as Medicaid-eligible early in a school year continue to be counted for the year, so long federal delays could, in some cases, blunt immediate year-to-year losses. But officials said the uncertainty is high and that the agency is coordinating closely with the Agency of Human Services to monitor potential outcomes.
Officials said they expect additional continuing resolutions and that a presidential budget had not been released at the time of the meeting. They advised legislators and districts that the agency is tracking developments and will update stakeholders as allocations and reconciliation language become clearer.
