Treasurer’s office explains $14 million borrowing for flood recovery, proposes medical debt relief and climate uses for remaining funds

Ashlyn Doyon, director of policy at the Treasurer’s Office, told the Senate Appropriations Committee on Feb. 4 that the treasurer’s office originally received a $20 million one‑time appropriation in 2022 to consider buying down outstanding general obligation bonds, but the office “elected not to buy down bonds at that time” after market and cash‑management analysis.

Doyon said the administration subsequently borrowed $14,000,000 of that appropriation for flood recovery and that the emergency board directed the administration to present a plan to repay that amount in the governor’s Budget Adjustment Act. The BAA therefore includes language returning the $14 million to the treasurer’s account, Doyon said.

Treasurer’s office proposals for the remaining funds: Doyon described options the office has been exploring for the remainder of the original $20 million appropriation (roughly $6 million still available). She said the treasurer’s office has discussed: • A proposed $1,000,000 Trevor Medical Debt Relief Initiative intended to buy down up to $100,000,000 in medical debt (Doyon said the proposal would leverage $1 million to buy down a much larger principal balance owed by Vermonters; specific program mechanics were to be developed and the proposal would require separate legislation). Doyon said the medical‑debt proposal is being advanced in a separate bill and that the treasurer’s office expects committee consideration to start in the sponsor’s committee.

• Climate‑infrastructure proposals, including municipal technical assistance and a potential revolving loan fund seeded to leverage FEMA capital with a 10:1 match (Doyon said she was not yet ready to present final proposals because federal match and FEMA funding guidance were in flux following recent executive actions).

Committee questions focused on authority and timing. Several senators asked why the treasurer’s office kept the funds while exploring alternatives rather than reverting them immediately to the legislature; Doyon said the original appropriation was for bond buy‑down, and timing of bond issuances and market assessment are within the treasurer’s discretion, which changed the office’s approach to holding the appropriation while it evaluated highest‑value uses. Doyon said the treasurer’s office was “okay with” the House Appropriations Committee proposing to allocate the $14 million elsewhere and expected that a portion of the funds would be returned to the treasurer by the BAA while other uses might be adopted through legislative action.

Other treasurer’s office updates presented to the committee included unclaimed property activity (a $4,400,000 increase in the general fund transfer from unclaimed property receipts in the BAA true‑up; about 19,000 claims paid last year and about 17,000 paid in the first half of the current year) and the higher education trust fund (the treasurer reported a 10.2% overall gain for the fund this year and a roughly $1.7 million distribution across the state’s public institutions; the treasurer’s office noted the statute allows a 5% distribution when investment performance supports it and an additional 2% under specified conditions).

The treasurer’s office also summarized state bond ratings (double‑A plus from Moody’s, S&P and Fitch) and said ratings affect borrowing costs for state and quasi‑state borrowers; Doyon noted that the state has not regained a prior AAA rating since a downgrade in 2018 and that maintaining pension funding, reserves and other metrics remains important to ratings agencies. Committee members asked for follow‑up material on bond‑rating drivers and on the treasurer’s office’s recommended uses of the remaining appropriation.