Committee reviews $15 million IT fund request, statutory transfers for tax modernization

The House Energy and Digital Infrastructure Committee on Feb. 19 reviewed several IT- and tax-related items in the governor’s FY2026 budget, including a $15 million transfer to the statewide information technology fund and statutory transfers for tax-system modernization.

Committee members heard from Secretary Riley Hughes and staff about the $15 million request, which the administration described as a partial buy-down of arrears that accumulate in the Agency of Digital Services' internal service accounting for enterprise technology services. Secretary Riley Hughes said the funding is intended to reduce the backlog that causes agencies to receive large chargebacks a year after they consume services.

The committee also discussed one-time statutory transfers: $4.3 million to the tax computer system modernization fund and a $1.5 million transfer from the education fund into the same tax fund. The committee read language from statute describing the tax fund mechanism: "Fund shall receive annual transfers from the general fund and the education fund and amounts not to exceed 0.21% of total revenue collected in the prior fiscal year by the Department of Taxes." The transfers are directed by statute and department practice.

Members questioned the timing and scale of the IT transfer and asked for fund balances, a breakdown of which enterprise services the $15 million would cover and a near-term plan to move billing from the current 12-month arrears model to more current invoicing. Representative Sebelia said the committee should support steps to address the arrears: "I will support it for the simple reason that if we don't support this to try and get a handle on deficit spending, it's just gonna multiply and multiply," she said.

Representatives and administration staff agreed to follow up. The Agency of Digital Services and Joint Fiscal Office expected to provide a more detailed allocation of the $15 million within 24 hours; committee members requested a fund-balance report for the tax modernization fund. The committee also asked Representative Sebelia to draft a recommended memo for the Appropriations Committee describing the deficit-spending issue and the department’s mitigation plan.

The meeting touched on other infrastructure items related to digital services: a request from the Department of Corrections for roughly $3 million to install Wi‑Fi in correctional facilities and a Vermont Community Broadband Board report on broadband construction activity. Committee members asked the corrections committee to confirm the status of that Wi‑Fi request and whether federal grant funding remains a viable source.

Ending: The committee did not take a vote on appropriations but agreed to gather more detailed financial information from ADS and the Department of Taxes, ask the Joint Fiscal Office to circulate its memo, and to include a concise, factual statement about IT deficit spending and the proposed $15 million buy-down in the committee’s budget letter to Appropriations.