Agency of Human Services proposes $3.5 billion FY2026 budget emphasizing substance-use treatment, shelters and Medicaid match

The Agency of Human Services on Feb. 4 presented a proposed $3,500,000,000 budget for fiscal year 2026, a 5.81% increase that agency leaders said is mostly “current services” required to maintain existing programs and staffing.

The proposal, delivered to the House Appropriations Committee, moves several one‑time investments into the base budget and targets new, limited enhancements to fill gaps in Vermont’s substance‑use system of care, expand permanent shelter capacity and add pretrial supervision in one additional county. Agency leaders also highlighted a favorable federal medical assistance percentage (FMAP) change that reduces the state general fund need for some Medicaid costs.

Jenny Samuels, secretary of the Agency of Human Services, said the bulk of the requested increase—about 5.34 percentage points of the 5.81% total—covers ongoing caseload, utilization and staffing pressures. "This really is a current services budget," Samuels told the committee, adding that the agency has about 3,835 employees, a 0.2% net increase (about 27 positions) over the prior year.

Samuels and Richard (Rich) Donahue, the agency’s chief financial officer, said the budget keeps previously funded pilot programs in place by moving them to base funding where evaluations showed positive results. Donahue described the global commitment or Medicaid matching appropriation (B301) as the central “mixing bowl” that contains the state share for Medicaid and the federal match. "The lion share of general fund for the agency is with the secretary's office as matching funds for global commitment," Donahue…