House Appropriations chair briefs Senate on FY25 budget adjustment, flags Medicaid, housing and treasurer fund reallocations

Representative Chai, chair of the House Appropriations Committee, briefed the Senate Appropriations Committee on Feb. 11 about the House version of the fiscal year 2025 budget adjustment act, saying the House agreed with “virtually 99% of what the governor recommended” while making a set of targeted changes and clarifications.

The House packet, Chai told the Senate, trims or transfers a small share of general fund spending — she said the adjustments affected about 0.7% of general fund dollars and 0.17% of the total all-funds budget — and mainly addressed housekeeping, account truing and program-specific fixes. “In general, we agreed with virtually 99% of what the governor recommended in his budget adjustment proposal,” she said.

Why it matters: The changes shift one-time and special-fund dollars to address urgent caseload and provider needs in human services and to free up money for housing projects and other near-term priorities. Several of the adjustments also add or clarify allowable uses, close unused special funds and add guardrails for short-term grants.

Key Medicaid and human services items Representative Chai identified several larger human services adjustments. The House added $21 million for extraordinary fiscal relief for nursing homes and roughly $24.5 million to cover underestimated Medicaid “bed day” costs; Chai said the administration had undercounted roughly 78,000 Medicaid bed days, which drove part of the increase. She also said caseload counts were roughly flat or down while utilization — the per-case use of services — had risen, contributing to higher costs.

To manage utilization-driven pressure, the House included language enabling use of the Human Services Caseload Reserve Fund — which Chai said holds about $94.5 million — for eligible draws tied to utilization, and it used higher-than-expected consensus revenue to cover about $13 million of needs rather than relying on ongoing general fund.

Provider stabilization grants and guardrails Chai told the committee the administration requested $10 million in FY25 for one-time provider stabilization grants to a range of health providers, including federally qualified health centers, residential substance-use treatment providers and residential mental health providers. The House added that $10 million and inserted language requiring applicants to show sustainability plans for continued operations if the grants prove temporary.

Child care and childcare special fund language Chai referenced a large child-development appropriation ($213 million is mentioned in the hearing) and said the House made two changes related to the Child Development Division; she also said the House included intent language about creating a revenue stabilization reserve inside the childcare special fund but did not establish such a fund in the adjustment bill itself.

Treasurer-held buydown funds and reallocation decisions The House declined to revert the full $20 million the treasurer had previously set aside for an early bond buydown, transferring instead $14 million back into the budget adjustment package for near-term uses. Chai read from a memo provided by the treasurer explaining that the original $20 million was a one-time proposed early bond redemption and that using the funds for another purpose “would have no impact on the state's credit rating” and would not create an obligation to replace the funds.

Of the $14 million the House did not return to the treasurer's account, Chai said the House proposed specific allocations: $8.6 million to the Vermont Housing & Conservation Board to help with a pipeline of roughly $40 million in projects; $2.8 million to finish the third project under the Act 186 pilot housing program for individuals with developmental disabilities; $1.84 million to extend emergency general assistance cold-weather rules through June 30; and $850,000 redirected to the judiciary for network and security upgrades and one accessibility bathroom near the Essex courthouse (Chai specified roughly $50,000 for that accessible bathroom).

Property transfer tax and other revenue shifts The House clarified how recently enacted laws distribute additional property transfer tax receipts. Chai said the committee used the percentage allocations defined in the larger fiscal bill (Act 113) when reconciling language differences with the housing bill (Act 181). She said about $1,025,000 of new transfer-tax revenue is directed to the Department of Health’s substance-use programs under the post-adjustment distribution. At the same time, the House reduced transfers from sports wagering (Chai cited almost $900,000 less) and from the liquor-control fund in part because liquor sales are down and the liquor fund has run deficits.

Housing, rental and other program changes The House added (per Chai) an additional staff position at the attorney general's office and converted a limited-service position in the defender general's office to an exempt permanent post, matching statutory requirements for those positions. The rental housing revolving loan fund received language allowing participants to increase rents by more than 3% in circumstances the agency deems warranted.

Adult learning, SNAP and general assistance changes Chai said a technical correction was added for adult learning: about 120 students who were in the old high-school-completion program and fell into a transition gap will now be able to receive diplomas under the adjustment language. The bill also directs the Department for Children and Families to fully use the state's discretionary SNAP exemptions; Chai said this will preserve food benefits for families and that the state currently has federally funded 30-day SNAP vouchers that are not being used before they expire at the end of the federal fiscal year. Section 88 of the adjustment bill extends the emergency general assistance housing dates without changing eligibility.

Service-level agreements and agency arrearages Chai told senators that agencies are being charged for shared services months in arrears — in some cases 6 to 12 months — and that the Agency of Human Services has been particularly affected. The House included roughly $2.5 million in increases to cover service-level agreements, much of it for human services; Chai said departments reported spikes in costs (the state's attorney's office raised a storage-cost example tied to body-camera video, which produced a large anticipated charge that the parties said they were working to resolve).

What the Senate hearing covered and what remains Chai emphasized most House changes were technical or targeted fixes, not broad policy shifts, and she said the House sought to avoid using the budget-adjustment process as an ongoing budgeting tool for multiyear shortfalls (she cited the Veterans' Home as an example of a program that had used the adjustment process repeatedly). The House sent the adjustment package to the Senate for review; the Senate committee hearing on Feb. 11 served as a briefing rather than a floor vote in the Senate. No Senate vote on the package is recorded in the Feb. 11 hearing transcript.

Speakers and source material Chai frequently referenced the House floor report and materials on the committee page and read briefly from a memo supplied by the treasurer explaining the origins and constraints on the original $20 million set aside for early bond buydown. Emily Burns of the Joint Fiscal Office was noted as the staff expected to provide number-level detail in follow-up, and the treasurer’s memo and other committee documents were cited as posted materials.

Next steps The House-passed adjustments will remain under Senate consideration; senators said they expected additional detail from the Joint Fiscal Office and from agency witnesses as the Senate processes the adjustment package.