Senate Appropriations reviews House changes to FY26 budget bill SH489, flags reserve and transfer language

The Senate Appropriations Committee met April 2 to review House amendments to the fiscal year 2026 budget bill, SH489, with Grady Nixon of the fiscal office walking members through the house-passed text and highlighting dozens of line-item changes, transfers and new reporting requirements.

The committee’s review focused on adjustments the House made to the governor’s recommended budget ("GovRec") and on new language affecting reserves and midyear authority. Nixon said the House added intent language clarifying that interim appropriation adjustments should prioritize health, safety, education and the economy, and that capital-bill appropriations were folded into the bill’s purpose language.

Among the larger, itemized changes the fiscal office highlighted were: a reduction of an appropriation for mobile and portable radio equipment from $920,000 in the GovRec to $800,000 in the House text (a $120,000 reduction); an added $275,000 for the Department of Forests, Parks and Recreation for a fire apparatus; House additions for an urban search-and-rescue team; and a $1,400,000 appropriation aimed at increasing access to EV charging ports, funded in part by a reduced transfer to the transportation infrastructure bond fund (the transfer was reduced from $2,300,000 to $900,000, freeing $1,400,000 in the transportation fund, according to Nixon).

Nixon also identified health- and environment-related changes: the House cut $240,000 from PCB testing funding, removed a $500,000 appropriation for a pilot recovery campus start-up and added a $300,000 appropriation described as supporting recovery residency certification by the Vermont Alliance for Recovery Residences. The House reduced an environmental contingency appropriation that previously appeared as $9,000,525 (and related figures discussed) by roughly $4,000,000 in its text; committee staff flagged that reduction for follow-up.

On corrections and justice-related items, the House reduced by $100,000 a GovRec appropriation and retained a $200,000 appropriation to hire a consultant to develop a plan to transition the Northeast Correctional Complex or parts of it to a treatment-focused facility; the House also added a reporting requirement directing the Department of Corrections to submit the consultant’s findings to the Joint Legislative Justice Oversight Committee by Dec. 1.

Housing and community development line items also shifted: the House reduced funding for rental revolving loan and middle‑income homeownership development programs (Nixon cited cuts of $7,500,000 and $5,000,000 respectively) and moved an appropriation for the Vermont Housing Improvement Program into the one‑time section. The House added or retained multiple smaller grants and targeted appropriations (for example, funding added for volunteer income tax assistance, primary care transition models, food bank grants and support for the USS Vermont support group).

A major portion of the discussion addressed changes to statutory reserve and midyear authority language. Nixon said the House added language directing the Department of Finance and Management to meet reserve requirements under 32 VSA §308 and related provisions of the second budget adjustment, then to set aside the $133,000,000 (as described in the second budget adjustment) and hold any remaining balance to address potential federal funding shortfalls. The House language also clarifies that, when the General Assembly is not in session, the Joint Fiscal Committee may make recommendations to the Emergency Board about transfers of funds reserved under that section and that the Emergency Board may unreserve and transfer funds to implement JFC recommendations — but the language does not force the Emergency Board to adopt JFC recommendations.

Committee members pressed staff on how the new text would work in practice. Questions included who could initiate an interim revenue forecast outside the scheduled January/July forecasts, how the 1% and 4% midyear thresholds would interact with the new JFC involvement, and whether the proposed criteria for implementing expenditure reduction plans (for example, limiting reductions in any appropriation to 5% and avoiding “unduly disproportionate” effects on single functions) would prove practicable during a sharp revenue downturn. Nixon said staff and JFO will follow up with additional clarifications and that some statutory cleanup and cross‑references will be updated to align with other pending bills (including the second budget adjustment).

The fiscal office presentation prompted questions from senators about technical discrepancies or missing line items (for example, whether firearms purchases referenced in testimony were captured in the current text) and requests that agencies be contacted for clarifications on specific appropriations.

No formal committee votes were recorded during the presentation. Committee members asked staff to provide follow-up materials and to coordinate with agencies when amounts or intent language were unclear. The committee expects to revisit the bill after staff and agency clarifications are supplied.

The committee’s review continues as the FY26 process moves forward; staff said final numerical alignment with other budget vehicles (including the capital bill and the second budget adjustment) will be necessary before enactment.