Vermont Community Action Partnership requests $1.65M base funding to expand microbusiness and financial coaching services

Liz Scharf, director of community economic development and food security at Capstone Community Action, told the Senate Economic Development, Housing & General Affairs committee that the Vermont Community Action Partnership is seeking $1,650,000 in base funding for fiscal year 2026 to support three financial capability programs: microbusiness development, Volunteer Income Tax Assistance (VITA) and financial coaching.

Why it matters: Scharf said the programs provide sustained, local one‑on‑one support for very small businesses — often sole proprietors or firms with fewer than five employees — and argued that modest recurring state funding would expand staff capacity, reduce wait lists and extend services to more low‑ and moderate‑income Vermonters.

What the partnership asked for

- The Vermont Community Action Partnership requested $1,650,000 in base funding for FY26 to support the three programs; specific increments presented were an $87,000 increase for microbusiness support (to add a business counselor and cover cost‑of‑living increases) and a $358,000 increase for financial coaching. Scharf said the VITA program (free tax assistance) also needs an increase; the transcript lists the existing microbusiness funding as roughly $98,000 per community action agency (about $490,000 total) and described a desire to move beyond that level.

- Scharf described eligibility and services: microbusiness counseling and workshops are available through each community action agency; clients for counseling services are generally required to be at or below 80% of area median income, while workshops are open to all. She said many clients need persistent one‑to‑one support and that staffers combine business coaching with personal financial counseling and VITA tax preparation.

Program outcomes and examples cited

- Scharf provided FY24 outcomes: community action agencies worked with just under 700 Vermonters on business coaching and workshops, helped start 73 businesses, supported 50 expansions, and helped 65 businesses access $687,000 in capital that resulted in 60 full‑time‑equivalent jobs.

- Historical totals: Scharf said the partnership has helped roughly 2,100 Vermont businesses over the agencies' tenure and leveraged more than $15 million in financing.

Services, partnerships and gaps

- The microbusiness work is delivered through Vermont’s community action network (Capstone, BROC, CVOEO, Northeast Kingdom Community Action, SEVCA). Scharf said the agencies partner with HireAbility, SBA, regional development corporations and local chambers of commerce, and rely heavily on word‑of‑mouth and local referral networks to reach clients.

- Gaps include marketing capacity to widely advertise services, the need for more accounting partners and CPAs willing to volunteer time, and limited ability to follow up long‑term with firms after they graduate from counseling. Scharf also noted the agencies step into emergency roles — citing COVID‑era Embrace grants and the Main Street Flood Recovery Fund — and that most of the programs' budgets go to staffing and sustaining professional counselors.

Committee questions and next steps

Committee members asked about tracking longer‑term outcomes once businesses scale, the boundary between free services and private‑sector providers and how the agencies coordinate referrals with other state programs. Scharf said the agencies can provide lists of client outcomes and that many of the program referrals come from state partners and nonprofits, but that marketing and staffing constraints limit broader outreach.

Ending

No committee vote was taken. Scharf asked for recurring base funding to retain and expand staff capacity so community action agencies can continue one‑on‑one coaching, tax assistance and financial counseling that supports micro‑entrepreneurs statewide.