Vermont Agriculture agency proposes about $59.99 million 2026 budget, cites salary and benefit costs as main driver

Secretary Anson Tebbetts and Agency of Agriculture, Food and Markets Chief Operating Officer Nicole Dubuque presented the agency’s proposed fiscal 2026 budget to the House Committee on Agriculture, Food Resiliency, & Forestry. The proposal totals about $59.99 million and includes what agency officials described as a net increase of roughly $609,000 over the current spending plan, with salary and benefit increases cited as the largest drivers.

The proposal breaks the agency’s base funding roughly into four streams: general fund (about 21 percent), federal funds (about 40 percent), special funds (about 35 percent) and interdepartmental transfers (about 4 percent). “We have about a $610,000 general fund increase over the current spending plan,” Tebbetts said. Officials told the committee that the budget does not reflect a major expansion of new programming but does add specific grant and federal award dollars in some areas.

Agency officials identified the main upward cost pressures as employee compensation and benefits, internal services and retirement costs. Nicole Dubuque said salary and benefits account for much of the proposed increase and noted the collective-bargaining cost-of-living adjustment used in planning: a 4.5 percent salary increase for the contract year. Health insurance costs were highlighted repeatedly; the agency presented division-level health insurance increases ranging into double digits in some divisions.

Programmatic changes and notable line items in the proposal include a $1.7 million federal increase for the Northeastern Dairy Business Innovation Center (DBIC) awards, a $450,000 increase tied to Lake Champlain Basin grants (an interdepartmental transfer with the Department of Environmental Conservation), and continued funding for Working Lands, Farm to School and Farm to Plate programs at levels the agency described as largely unchanged. The agency also proposed returning the Natural Resource Conservation Council (NRCC) base grant to $500,000, a $112,000 reduction from a prior $612,000 base; agency staff said that separate, larger grant flows to conservation districts (about $7 million) remain in place.

The agency described special funds (fee revenue from licenses and registrations) and federal reimbursements (for example, USDA-funded meat inspection work that the state performs and then is reimbursed for) as core to the budget’s structure. Dubuque explained the Vermont Agriculture and Environmental Laboratory (VAIL) in Randolph is a shared facility with the Agency of Natural Resources and other tenants; building space and tenant payments are calculated by Buildings and General Services and account for fee-for-space adjustments in the proposal.

Committee members asked about the durability of federal funding given pending federal decisions. Dubuque and Tebbetts said most federal grant awards included in the proposal remain in place under current continuing resolutions, but some items have been paused in Washington — for example, a portion of an organic-procurement-related DBIC appropriation — and federal staffing changes could affect USDA personnel who support state implementation. “We have not been notified that anything is being pulled back at this point,” Dubuque said; Tebbetts added that an agreement with USDA is funding dairy testing and temporary staffing for an HPAI-related dairy testing program.

Agency staff also reviewed carry-forward funds and multiyear obligations: many one-time appropriations and grant awards remain encumbered in multiyear contracts (examples cited included Working Lands, ecosystem services payments and meat/maple/produce one-time awards). The agency said those carry-forward amounts are obligated through existing agreements and remain available under those contracts.

Committee members questioned specific program details, including how ecosystem services payments are calculated and whether they include carbon sequestration components; the agency said the payment formula is per-acre and designed to reward practices that go beyond regulatory compliance. On the one-time meat/maple/produce awards, Tebbetts said the earlier round was a one-time appropriation and that the state is not positioned to repeat that level of one-time funding in the current fiscal context.

The presentation included program performance measures (licenses, inspections, compliance activities and other outputs) for divisions including food safety, animal health, weights and measures, maple and the produce safety program. Agency staff noted they are reviewing performance measures to focus more on impact and measures the agency can control.

The committee asked for follow-up material on several points, including division-level health insurance increases, the status of carry-forward balances and a deeper briefing on the ecosystem services program. Agency staff said they would provide more detailed breakdowns on request.

The proposal as presented contains no final legislative actions; it is a governor’s-recommended agency budget that will be reviewed by the legislature. Committee-level recommendations to Appropriations are due the following week, agency staff said. The agency’s formal budget submission timeline begins in late summer and culminates in the governor’s recommendation in September.