House Appropriations hears breakdown of roughly $69 million in substance-misuse funding, including five federal grants

Paul Daley, financial director for the Vermont Department of Health, told the Vermont House Appropriations Committee on April 22 that the committee-recommended appropriation for substance-use programs is about $69 million, and that just under $16 million of that total is expected to come from five federal grant sources.

Daley said the largest federal source is the formula grant long known as the substance abuse block grant, recently renamed the Substance Use Prevention, Treatment, and Recovery Services Block Grant (SUBG). He described SUBG as a noncompetitive formula award administered through the Substance Abuse and Mental Health Services Administration (SAMHSA). “Each year, we get an award, and we have 24 months to spend that award,” Daley said, noting the current SUBG award period ends in September 2026.

He identified the other major federal streams included in the appropriation as the State Opioid Response (SOR) grant (a SAMHSA program created in 2018 and awarded annually within a multi‑year project period), a Centers for Disease Control and Prevention grant called Overdose Data to Action (OD2A), Medicaid administrative claiming through the Centers for Medicare & Medicaid Services (CMS), and the Strategic Prevention Framework Partnership for Success (PFS 3), a competitive SAMHSA prevention grant for community prevention work.

Daley described how the grants are used. He said most of the awards flow back out as grants to local providers, estimating that in many programs “about between 70–90% of the funds go out as grants.” He said the SUBG appropriation includes a higher share for personal services (about 30%), while OD2A contains more funding for state staff because it supports surveillance and analysis work. On Medicaid administrative claiming, Daley noted the federal participation rate is 50% for activities such as credentialing and monitoring of substance‑use treatment providers and that those federal amounts appear in the budget line because Medicaid administration is not included in Vermont’s Global Commitment waiver.

On timing and award certainty, Daley told the committee that most of the federal awards expected to fund fiscal 2026 appropriations were included in the federal budget available under the continuing resolution and that the state has seen grant awards return toward a more normal schedule. He said that, while the administration change created some earlier uncertainty, he was “not concerned” about renewal of these five grants because the funds are appropriated by Congress. Daley also said Vermont typically draws down federal funds after incurring expenditures, in line with federal requirements to minimize time between federal disbursement and use: “we draw down funds weekly, monthly, or quarterly based on the expenditures that the state has already incurred.”

Committee members asked about who benefits from the grants. Daley said the funding can cover the full continuum of services — prevention programs in schools and communities, outpatient services for uninsured clients, workforce development for providers, residential treatment expenses not covered by Medicaid, and recovery services. He added that the SUBG can be used to focus on alcohol‑use disorder as well as illicit substances and that, in Vermont, alcohol use disorder remains a large problem. Daley said evidence from long‑running prevention work supports reductions in youth use when communities apply evidence‑based practices.

Committee members also raised immunization funding after Daley’s presentation. Daley answered questions about an immunization supplement award that had been canceled earlier in the year; he said the supplement — a COVID‑era immunization award that had been extended previously — was canceled effective March 24. He said the federal Vaccine for Children program provides vaccine to states at no charge and that the state’s routine immunization grant operates on a different award schedule; the department has submitted its application for the next immunization grant cycle.

Representative Dickinson asked about program efficacy; Daley said program evaluation is largely in the hands of subject‑matter experts but that long‑running prevention investments have produced measurable declines in youth uptake for substances tracked by the Youth Risk Behavior Survey. On vaping trends, Daley said state data show youth vaping has declined significantly from its peak, and he recommended the Youth Risk Behavior Survey as the most reliable Vermont source for tracking those trends.

The committee did not take formal action during this hearing. Members thanked Daley and scheduled the next Appropriations hearing for April 23, when regional planning commissions, the Department of Economic Development and the Department of Tourism are expected to appear.