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Conference committee on FY26 budget reserves $13.5M for tax credits, advances nursing incentives and position changes
Summary
Members of the legislature's FY26 budget conference committee agreed to reserve $13.5 million for tax credits, provide language and funding for nursing incentives, and consider reclassifying several positions while setting aside money for potential extended sessions and targeted primary care funding.
Members of the legislature's conference committee on the FY26 budget met to reconcile House and Senate budget priorities and agreed to reserve $13.5 million to cover proposed tax credits while advancing language and funding for several workforce and program priorities.
The agreement preserves the House figure of $13.5 million for tax credits (about $3.5 million more than the Senate position) so the Senate Finance Committee can decide final eligibility and amounts. Committee members also agreed to reserve $1.5 million to cover expenses that could arise if the legislature remains in session for additional weeks (estimated at $300,000 per week for five weeks as a planning figure).
Committee members directed staff to include language and funding for nursing incentives, noting a $500,000 allocation in the draft language for “nursing incentives” and asking for additional data points to appear in the report language. The group also discussed a proposal to reclassify two positions to exempt status with an associated one-time pay adjustment (discussed in the draft as roughly $25,000) and to route those personnel changes through the normal human resources approval process before administrative sign-off.
On health workforce financing, committee participants identified $520,000 in additional primary care funding as a priority tied to workforce and rural primary-care residency efforts and asked staff to find offsets to accommodate that amount. The group discussed telephone-tax receipts and a discrepancy in expected collections (figures discussed included roughly $2.5 million and a lower $536,000 estimate); participants noted the need to verify the correct amount before assuming the revenue in the final construct.
Members also addressed several base and one-time items across state agencies: adjustments to the Vermont Homeownership Incentive Program (VHIP) staffing and positions (three positions to be provided to the department, with LEHI to determine allocation), changes to court-diversion funding, and moving some training funds from base into one-time resources. The committee agreed to hold some previously identified funds (for example, an existing $490,000 allocation discussed in committee materials) as a reallocation of existing money rather than new spending.
On capital and special-fund housekeeping, staff described proposed language to revert unencumbered balances of certain prior-year appropriations and transfer those amounts into the environmental contingency fund so pending bill amendments can operate against available balances. The committee also reviewed brownfields language and asked that onetime language explicitly permit funds to be used for both evaluation and remediation.
Committee members discussed several smaller program allocations and technical fixes (tourism/grow grants, bond bank and VHFA adjustments, nursing-home staffing language, childcare and early-childhood pilot funding approaches, and continued support for local civic journalism). On the Vermont Small Business Development Center (SBDC), staff presented options to close a roughly $50,000 gap, including proposed one-time reductions in other programs to avoid backfilling federal leverage.
Participants repeatedly distinguished between policy language (what would be written into the FY26 section) and implementation steps needing HR review or later committee action. Multiple items were called out as contingent on related bills (S.126, S.397 and other bill language) or on Joint Fiscal Office verification of fiscal figures, and committee members requested follow-up language and confirmations in tomorrow’s drafting session.
The committee left several items for further work: final verification of telephone-tax revenue, drafting precise language to ensure onetime brownfields funds could be used for evaluation and remediation, and the precise placement and timing (base vs. one-time) for education finance changes and other multi-year items. Members scheduled additional drafting time to resolve those items and finalize the conference report.
