Department for Children and Families outlines FY26 budget, highlights homelessness aid, childcare funding swap and falling custody caseloads

The Department for Children and Families told the House Appropriations Committee on Feb. 4 that its proposed fiscal year 2026 budget shows small net growth overall while shifting some costs between funding sources and adding both one-time and base investments to homelessness and shelter programs.

"DCF is a large and complicated budget within a large and complicated agency," said Chris Winters, commissioner of the Department for Children and Families, introducing the presentation. Winters and Megan Smeaton, DCF financial director, walked lawmakers through revenue sources, caseload changes and program-level adjustments across DCF’s divisions.

At a glance, DCF said the FY26 proposal represents a 3.5% decrease to general fund support for the department’s base, a 1% increase to global commitment funding and an overall 3.3% increase to the total budget. The department’s base staffing count is 989 positions; including temporary and limited-service roles, DCF said the total exceeds 1,000 employees.

Why it matters: DCF runs programs that reach hundreds of thousands of Vermonters, including SNAP benefits, LIHEAP energy assistance, TANF-related services, child care subsidies and child-welfare services. Changes in federal reimbursement rates, caseloads and one-time federal dollars have driven several technical and programmatic adjustments in the agency’s proposal.

Emergency housing and shelter funding

The department proposed a $30.5 million one-time general fund appropriation to continue the emergency housing (hotel‑motel) program under current rules, and it included a $7.5 million base for the program. Winters told the committee that DCF’s current-year spending on the program exceeded $47 million.

Smeaton said the current GA (general assistance) emergency housing program serves about 1,100 households outside adverse‑weather months; DCF reported access to roughly 1,400 hotel rooms statewide. Outside the December‑1 to March‑31 adverse‑weather period the program applies an 80‑day cap per household in a 12‑month period, DCF staff said.

Committee members pressed DCF on hotel conditions and community impacts. "We do have authority through our rule making process to withhold funding if a hotel does not comply with Department of Health standards," Winters said, adding that local health inspectors and the Department of Health may inspect and close properties when needed. Winters also said DCF sometimes stops placements at a hotel after repeated complaints and that towns or hotels sometimes fund security locally.

To expand noncongregate shelter capacity, the DCF proposal includes a $2 million one‑time Housing Opportunity Program (HOP) grant pool to fund new projects, and a $3.3 million increase to the HOP base budget to sustain shelter capacity built in the prior year. Winters told lawmakers those recent investments produced roughly 85 shelter beds so far across multiple projects; many proposals encountered delays securing buildings, providers and staffing.

Childcare financial assistance and special‑fund swap

The Child Development Division reported that monthly enrollment in the Child Care Financial Assistance Program (CCFAP) rose from about 7,400 to more than 10,000 children over the last year, with the largest increase among infants (about 969 to nearly 1,800 infants, the department said).

Smeaton described two related budget moves for childcare funding in FY26: a $3.5 million reduction shown on the CCFAP appropriation based on a caseload analysis, and a proposal to swap special‑fund (payroll‑tax) dollars with general fund based on revised payroll‑tax revenue estimates. "The economists projected the childcare payroll tax would be about $19 million higher than the amount built into the base budget," Smeaton said; the department proposed using that special‑fund capacity in FY26 so an equivalent amount of general fund can be freed for other agency needs while maintaining the program’s total resources.

Committee members asked for more detail about the revenue projections, the mechanics of moving one‑time versus base funding, and the risk of under‑ or overestimating an entitlement program. Smeaton said the department had reviewed the estimates with JFO (the Joint Fiscal Office) and that the proposed swap leaves total program dollars unchanged while changing the composition of funding sources.

Family services caseload trends and child‑welfare work

On child welfare, DCF told the committee that the number of youth in DCF custody has declined steadily since 2016. Winters attributed the decline to a combination of factors including the use of structured decision‑making tools, investments in prevention services and changes identified in a 2018 UVM study. "We've been working on those recommendations ever since," he said, and added that the department has trained staff and worked with the judiciary to adopt structured decision guides.

Winters cautioned that although overall custody caseloads are down, the acuity and complexity of children entering care have increased, placing greater demands on the high‑end system of care, including private non‑medical institutions (PNMIs) and secure residential placements. DCF noted ongoing rate and inflation adjustments for PNMI providers and said it has added capacity such as the Red Clover program.

Other program notes

- SNAP (3SquaresVT), LIHEAP, Reach Up and the Office of Economic Opportunity (OEO) appeared in the presentation as large federal and state funding streams that feed DCF services. Smeaton flagged a Summer EBT spending authority request for the new federal Summer EBT program.

- Children's Integrated Services (CIS) work is being consolidated: funding and program responsibilities previously split between the Department of Mental Health and DCF for some regions will move fully into the Child Development Division to create a single statewide administration of the early childhood component, DCF said.

Committee followups and data requests

Members asked DCF to provide additional details after the hearing, including counts and churn rates for childcare providers (churn of openings/closings), a breakdown of housing‑related funding across state agencies, the number of General Assistance households who have exhausted their 80 days, and more detail on payroll‑tax revenue projections and how base vs. one‑time funding decisions were made. DCF staff said they would return those data and follow up with relevant agency colleagues.

What’s next

The committee did not take votes during the hearing; members scheduled further budget hearings with other human services agencies for the following day. DCF staff said they would be available for line‑by‑line review of the proposed appropriations and would provide the data the committee requested.