Appropriations committee advances revised Budget Adjustment Act, rolls back many governor requests

The House Appropriations Committee on March 19 reviewed a revised Budget Adjustment Act that largely restores the governor's recommended structure and removes a number of one-time appropriations that had been added in the House and Senate conference report.

Committee members and staff said the draft returned most of the governor's changes, routed $14,000,000 back to the treasurer's office for bond redemption and left about $133,500,000 to be carried forward into fiscal 2026 for future appropriation or transfer.

The revised bill removes several appropriations and pilots that the Legislature had added earlier. Among the changes staff highlighted, funding for a pilot under Act 186 and additional Vermont Housing and Conservation Board (VHCB) pilot funding were dropped; municipal flood grant expansions that would have increased funding to impacted communities were pared back; and earlier language that prevented reversions of prior judiciary funds was struck so those reversions (about $850,000 and $50,000 in two items) are restored.

"The money's going back to the treasurer. We'll deal with it in FY '26 budget," the committee chair said when introducing the draft bill, describing the plan to move many transactions into the full-year budget process.

Why it matters: committee staff said the conference committee negotiated a narrower set of changes after the governor vetoed the earlier bill. That means immediate, one-time infusions that the House and Senate had added will not take effect under the revised BAA unless they are later restored in the full FY 2026 budget.

What changed: Joint Fiscal Office analyst Emily described the spreadsheet showing differences between the governor's recommendation, the version as passed by the Legislature, and the new BAA. Grady Nixon of the Joint Fiscal Office said the revision returns a $14,000,000 one-time appropriation to the Treasurer for early bond redemption that the Emergency Board had used in July after flooding; the House/Senate conference version had not backfilled that appropriation, and the new bill restores it.

Other specific items identified in the committee discussion: - Health and human services: the governor's requested increase for provider stabilization grants (moved to the Department of Vermont Health Access) remains in the new BAA, with the governor having asked to increase a $4,000,000 line to $10,000,000 and move it to DVHA. - Department for Children and Families: a previously proposed $181,840,000 one-time appropriation tied to extending cold‑weather policy through June 30 was removed; committee staff said the Agency of Human Services believes it has savings to fund the extension without that appropriation. - Municipal flood grants: the conference report had reallocated funds to wrap grants for communities affected by July 2024 and August 2023 flooding; the new bill removes the $1.8 million expansion while leaving a prior $200,000 allocation for Addison County in place, producing a net $1.6 million reduction from the conference proposal. - VHCB and Act 186 pilot: appropriations added in H.141 for VHCB and an Act 186 pilot were removed in the new BAA. - Judiciary reversions: language permitting the Legislature to repurpose about $850,000 and $50,000 in prior-year judiciary funds was reverted to the governor's original recommendation, which returns those amounts rather than authorizing new uses. - Positions: several positions that had been created in prior iterations (two in the Human Rights Commission and one in the Attorney General's Office, among others) were not carried forward in the draft language; staff said the sections and numbering were adjusted accordingly.

Staff and members indicated some items remain subject to later change in the full-year FY 2026 budget or in Section C (the provision that takes immediate effect). Grady Nixon told the panel where the changes appear in the bill text — for example, the treasurer one-time appropriation is in section W, page 29 of the draft.

Committee procedure: members asked whether the administration planned to testify on the draft; staff said the administration had requested some transfers (for example, an insurance reserve transfer of $3,000,000 and $220,000 to an Emergency Personal Survivor Benefit Fund) and those transfers remain in the new BAA. The committee scheduled time to review a web report showing line-item differences before voting later in the morning.

Ending: Committee staff said they would circulate an updated web report (including House changes) and then return to the live meeting to take a vote later in the session. No formal vote on the draft BAA was recorded in the transcript provided to the committee during this session.