Senate committee reviews Agency of Administration FY26 budget; Office of Racial Equity moved to separate appropriation

Senate Government Operations Committee members on Feb. 7 heard an overview of the Agency of Administration’s FY26 budget request, including a proposal to move the Office of Racial Equity into its own appropriation, a new chief communications officer position, an $850,000 increase in the Clean Water Fund allocation for competitive-match opportunities, and higher insurance-related charges in the Office of Risk Management, agency officials said.

The budget matters to Vermonters because it funds central services that run state government — from human resources and finance to risk management — and it includes funding shifts and one‑time investments that affect municipal grant capacity, accessibility work and community technical assistance, the agency told the committee.

Secretary of Administration (name not specified) told the committee the secretary’s office request totals roughly $8.9 million in all‑fund appropriations for FY26 and is funded by a mix of general fund, interdepartmental transfers, special funds and internal service funds. Agency officials said the breakdown is roughly $2.9 million (33%) general fund; $2.88 million (32%) interdepartmental transfers; about $1 million (9%) special funds, including Clean Water Fund items; and $2.3 million (26%) internal service funds. The secretary said the Office of Racial Equity positions and operating costs are being moved into a stand‑alone appropriation for transparency "with no cost increase associated with that move."

"The Office of Racial Equity is funded by state dollars," the secretary said, adding that one position in the office is paid via an interdepartmental transfer to support a federal Preschool Development Grant (PDG) limited‑service position.

Nick Kramer, chief operating officer of the Agency of Administration, provided additional detail on the Clean Water Fund items and other line items. He noted that in addition to an $850,000 increase for flexible matching capacity on competitive federal opportunities, the secretary’s office contains a $25,000 historical appropriation; "so the total is actually $875,000," Kramer said. Agency staff described the $850,000 as a flexible pool to provide state match for competitive grants (such as those under IIJA and the Inflation Reduction Act) when opportunities arise, and said the Clean Water Board carries the formal statutory recommendation process for those funds.

Committee members pressed agency staff on specific elements: Senator Allison Clarkson asked where functions such as human resources and libraries sit relative to the four appropriations shown in the secretary’s office packet; agency staff replied that the packet covers only the secretary’s office and that other divisions (finance and management, tax, libraries, etc.) are in separate appropriations within the Agency of Administration. The secretary also said $700,000 in base general funds for the state’s language access plan are being moved into the Office of Racial Equity — a transfer of existing funding rather than a new appropriation.

The budget includes a proposed chief communications officer position, agency officials said, tasked in part with leading cross‑agency communications and improving digital accessibility to comply with updated federal guidelines under the Americans with Disabilities Act. The agency said initial priorities for the position will include coordinating a statewide effort on digital accessibility and strengthening public awareness of state programs.

On risk and insurance, agency staff described the Office of Risk Management as a three‑person office that administers internal service funds for workers’ compensation, general liability and other statewide insurance charges. Staff said workers’ compensation charges in the FY26 request total about $14,400,000 — up roughly 6.2% from FY25 — and that general liability charges are up about 6.8%. Rebecca White was named as the manager of that office. Officials said those internal service fund charges fluctuate with market conditions, claims experience and actuarial estimates.

Committee members also discussed local flood and climate risks and whether the state’s claims experience or per‑capita exposure might affect insurance costs; agency staff suggested that while Vermont has seen catastrophic events, the state’s overall exposure remains different from larger states that have seen large market shifts, and they recommended a deeper technical briefing for the committee.

Agency officials listed several one‑time and ongoing investments in the FY26 request: $220,000 for two more years of the IDEAL Vermont program (inclusion, diversity, equity, action and leadership); $1.1 million for the Truth and Reconciliation Commission (an independent entity that receives an appropriation); and $3 million for the Municipal Technical Assistance Program (MTAP), which provides regional planning and grant application support through regional planning commissions and other partners. The Office of Racial Equity was described as having seven positions in its standalone appropriation.

No formal votes were held at the Feb. 7 hearing; agency officials and committee members concluded the presentation with agreement to return with more detailed follow‑up and to invite subject matter witnesses on specific items such as libraries, insurance and the Truth and Reconciliation Commission.

The committee’s next scheduled appearance from witnesses is listed for next week in the meeting materials.