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Department of Mental Health separates facilities budget, requests authority for rising costs and program shifts
Summary
Vermont Department of Mental Health told the House Appropriations Committee it will split central office and facility spending into separate appropriations, move $38.7 million in personnel costs into the facilities appropriation, and asked for additional spending authority tied to federal funding streams amid rising residential and PNMI demand.
The Vermont Department of Mental Health asked the House Appropriations Committee on Feb. 5 to approve a restructured budget that separates central office functions from facility operations and to authorize transfers and increased federal spending authority to match changing program demands.
The reorganization aims to show more clearly what the state spends on the Vermont Psychiatric Care Hospital and the River Valley Therapeutic Residence versus central office operations, Shannon Thompson, the department's financial director, said. "We are separating out the overall Department of Mental Health budget into two different appropriations," Thompson said.
Committee members were shown that the department plans to transfer $38,681,170 in personal services from the central office appropriation into the facilities appropriation. Thompson said the split is intended "for transparency purposes so you can see really what we're spending on those two facilities versus our central office and the rest of the system." The department also described its overall funding mix as dominated by Medicaid and the Global Commitment, with roughly 9% general fund in the current chart.
Why it matters: Separating facilities from central office spending changes how legislators and the public will see personnel and operating costs tied to inpatient care and secure residential services. The committee heard that much of the department's spending flows through federal Medicaid Global Commitment and grant funding, meaning state exposure and federal match rates affect long-term stability.
Among the detailed line items Thompson and the department highlighted: - A transfer of $38,681,170 from central office personal services into the facilities appropriation. - Vacancy-savings in central office are roughly in the 4% range, Thompson said in response to a committee question. - The Vermont Psychiatric Care Hospital (VPCH) was listed at about $34.5 million in current-year spending; River Valley Therapeutic Residence about $9 million; and an inpatient bucket shown separately. - The Success Beyond 6 program carries authority of $72,000,002.50, while actual annual spending has generally been closer to the $60 million range, Thompson said; the program is funded by a mix of Medicaid and general fund with schools providing the local match flow-through. - Private nonmedical institution (PNMI) spending includes an increase of $822,304, which the department tied to higher utilization of residential placements for adolescents, with both in-state and out-of-state placements referenced.
The department told the committee it has begun moving some Global Commitment Investment funds and making technical corrections among fund sources to align its cost allocation. Thompson also said some CNMI (likely PNMI) pressures and inflationary rate-setting adjustments are showing up in the request.
Discussion and context: Committee members, including Representative Lewin, asked about vacancy savings and whether salary or new positions drove increases. Thompson said salary and fringe changes reflect pay acts and standard personnel cost changes and that additional detail could be discussed in follow-up briefings. Commissioner Emily Hawes and Deputy Commissioner Samantha Swee also answered policy and service questions during the hearing.
The department indicated it will seek federal spending authority in the fiscal adjustments act (BAA) for programs already approved but lacking appropriation-level authority in the base budget. It also flagged that certain grant funding (HCBS FMAP) currently supporting alternatives-to-ED programs expires in March 2026, prompting a base ask of roughly $800,000 for the last quarter of FY2026 to preserve services while the state analyzes longer-term options.
Ending: Committee members said they would review the appropriation split and follow up on questions about vacancy savings, PNMI trends, and the mechanics of Success Beyond 6 funding. Thompson said staff and the department remain available for more detailed budget discussions as the committee works through the appropriation language.
