Committee reviews Appropriations language to let Emergency Board use balance reserve for declared emergencies and federal funding changes

Budget staff and legislators reviewed draft changes to the Appropriations Act that would let the Emergency Board, with joint fiscal committee involvement, release money from the general fund balance reserve in response to declared emergencies or reductions in federal funding.

The staff presentation explained that the proposed amendment would add statutory authority allowing the Emergency Board to “unreserve this amount from the balance reserve, replenish spending authority if needed,” in the event of a declared emergency while the General Assembly is out of session, and would also create a process to respond when federal fund revenues fall below the amounts set in the Appropriations Act. Budget staff (Speaker 4) identified the July flood last year as an example of when such flexibility could let previously appropriated one-time funds be redeployed for recovery needs.

The draft defines “unduplicated appropriations” for government function units and establishes a tiered response depending on the size of a federal-fund reduction. For small changes the Secretary of Administration would notify the Joint Fiscal Committee (JFC); for larger reductions the Secretary must prepare expenditure-reduction and transfer plans for JFC review and follow existing rescission procedures. Speaker 4 said the draft would use the Appropriations Act’s numbers as the baseline for federal funds so the Emergency Board and JFC can calculate any difference.

Committee members raised several concerns. One legislator (Speaker 1) and others asked whether the change should be indefinite or session-limited; one option discussed was leaving the change in draft language but making the authority session-long and returning to the issue in January. Another concern was delegating substantial discretion to the Emergency Board while the legislature is not in session. A member (Speaker 3) said that giving the Emergency Board broader authority “is a little more authority than I would like to invest ... when we’re out of session.”

Members also questioned the calculation method. Budget staff recommended excluding the Education Fund from the unduplicated appropriations calculation because the Agency of Education’s core appropriation is roughly $400,000,000 while the education fund adds about $2,400,000,000; including the larger education fund would materially change the percentage thresholds that trigger the process. Staff noted the complexity of caseload-adjustment-driven federal funding and cautioned that per-case calculations can produce effects that are not straightforward to interpret in the rescue/rescission framework.

Several process points were clarified: the Secretary of Administration would notify JFC; JFC can ask that the Emergency Board execute transfers as part of a plan; the Emergency Board adopts revenue forecasts in July, so the proposal sets the Appropriations Act as the baseline federal-fund amount for purposes of measuring changes; and, if conditions warrant, a new revenue forecast can be adopted mid-year (staff cited precedent in 2009). Speaker 4 said any transfers would require the procedural approvals in the existing rescission statute before execution.

The draft also contains several other budget-related provisions that were discussed in the same meeting packet: program language tied to a one-time appropriation for a Vermont community program (program name in draft), a new session provision about settlement funds that references an $11,000,000 payment the UVM Health Network must provide to primary-care providers under a Green Mountain Care Board order, report language directing the Department for Children and Families and the Chief Superior Judge to submit a supervised-visitation funding report, and language directing the Secretary of Administration to make recommendations on the adult-education funding formula and administrative home for adult education grants. Staff noted some line edits will be made before the committee’s vote and that a final 300-page bill at the printer does not yet reflect all suggested revisions.

Committee members asked for language tweaks to make some provisions session-limited rather than indefinite, and requested the staff prepare conference-committee language. Staff said they would work with bill drafters (Brandon/Brent referenced in discussion) to prepare alternate text and expected to present updated language before the committee vote. Several members also urged care in managing one-time appropriations, noting that one-time money available now might be spent before a July forecast and therefore might not be available to backfill a mid-year shortfall.

No formal motions or votes were recorded in the transcript excerpt. The committee agreed to reconvene and vote later in the day after members had time to review the materials and the staff-provided spreadsheets and bill drafts.