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Labor commissioner outlines federal funding mix, unemployment trust status to Appropriations Committee
Summary
Department of Labor Commissioner Michael Harrington told the House Appropriations Committee on April 25 that roughly 58% of department funding is federal, described core workforce programs funded by WIOA, and reported the unemployment insurance trust fund balance and planned IT upgrades as the committee
Michael Harrington, commissioner for the Vermont Department of Labor, told the House Appropriations Committee on April 25 that the department is predominantly funded by the federal government and that the health of the unemployment insurance (UI) trust fund and the status of workforce grants are key budget items for the state.
Harrington said roughly 58.36% of the department’s budget is federally funded, with about 22% from the state general fund, 19% from special funds and under 1% from department transfers. He told the committee that the department’s largest programs by dollars are unemployment insurance and workforce development and that the agency’s labor market information division is about 95% federally funded through the Bureau of Labor Statistics.
On workforce funding, Harrington described the department’s reliance on the Workforce Innovation and Opportunity Act (WIOA) for adult, youth and dislocated‑worker services along with Wagner‑Peyser labor‑exchange funds and other federal streams including apprenticeship and veterans’ programs. He estimated annual WIOA allocations in the neighborhood of $6–8 million and said most federal funds to the department are reimbursable — the department spends first and then draws down federal reimbursements.
Committee members asked about specific grants. Harrington said the RETAIN reemployment grant brought $21,000,000 to the state several years ago; the department used roughly $2,000,000 of that in the most recent year and recently received a no‑cost extension to continue spending remaining funds. He described the award as a one‑time discretionary grant that is not expected to be renewed.
On unemployment insurance, Harrington provided the committee with high‑level figures and context. He said the UI program line item is about $73.9 million on the ledger but that administrative funding flowing to the department is roughly $10–11 million; the remainder reflects benefit dollars and trust‑fund transactions held at the federal treasury. Harrington gave a current trust‑fund figure of approximately $305,000,000 and said he would prefer the fund to be “over $400 million” to better withstand a recession; he noted pre‑pandemic balances were higher (about $520,000,000 prior to the pandemic).
Harrington also discussed program integrity and operations. The department has established a UI fraud unit and participates in the national Integrity Data Hub that screens claims across states. He said Vermont’s comparatively rudimentary legacy systems and some manual processes helped limit the scale of identity‑theft fraud during the pandemic, but also that planned IT modernization remains important; a new unemployment IT system is expected to go live in spring–summer 2026.
Committee members asked for weekly claims trend data and other follow‑up; the department agreed to provide that information. There were no votes or formal committee actions during the briefing.
