Budget panel approves some FY25 adjustments, holds others pending follow-up

The Budget Adjustment Committee met Jan. 30 and agreed to a set of technical amendments and targeted program changes drawn from the governor’s FY26 recommended budget while holding several larger transfers for additional review.

Grady Nixon of the fiscal office walked the committee through the package, describing the origin of the items as coming from the governor’s FY26 recommendation and explaining that many are “c sections,” meaning changes to the current fiscal year budget. “This first is a $1,000,000 reduction to the appropriation for state placed students. Costs are lower than originally estimated,” Nixon said.

The committee approved the $1 million reversion for state-placed students and approved an extension of the Blueprint for Health “hub and spoke” pilot from two years to three years to allow carry-forward into FY26 because the pilot started late.

The panel also agreed to language and spending authority for several targeted items: a $2,800,000 appropriation to the Vermont Housing & Conservation Board (VHCB) to support a developmental disability housing initiative; clarifying language and oversight tied to a $10,000,000 appropriation for Vermont residential mental health providers; and changes to 32 V.S.A. § 308(b) authorizing transfers from the human services caseload reserve to federal childcare funds to support the Child Care Financial Assistance Program (CCFAP), with a small wording update to the “shall unreserve and transfer” clause noted for final drafting.

Committee members signaled support for changes intended to increase program flexibility for the Vermont Housing Finance Agency’s rental housing revolving loan program and for clarifying VHFA/VHCB authority to adjust previously authorized amounts where agency rules allow.

Members also accepted a request to add FEMA-related flexibility in Act 78 language, but limited the committee’s acceptance to the specific subsection (referred to in the meeting as “section 2” of the proposed E100.1 change) rather than the entire set of proposed amendments — committee members explicitly declined to include the larger subsection discussed as “number 4.” The committee noted the broader FEMA-related pool moves large sums in and out and wanted a narrower change at this time.

Several items were not pulled into the current budget adjustment act. The committee deferred action on two transfer updates in section G101 and an $11,000,000 estimated reconciliation payment for a facility referenced in the transcript as the Breville retreat; members asked staff to follow up with agency contacts (including chair-level consultation) before deciding whether to include those transfers. A proposed $2,000,000 split from the BGAP appropriation to create a disaster relief fund for businesses was discussed as revenue-neutral (reducing a $7,000,000 BGAP appropriation to $5,000,000) but committee members asked staff to check with the commerce chairs before pulling it into the BAA.

The committee also approved report language requiring the Department of Corrections to prepare a strategic plan on the financial sustainability and program efficacy of facility work programs; the item carries no new spending authority but directs a report and timeline back to the committee.

Committee chairs and staff agreed to follow up on outstanding clarifications, to refine statutory wording where noted, and to consider remaining items at a subsequent markup. Members scheduled further FY26-related deliberations the next day, starting at 9 a.m., including additional agency presentations and a planned straw poll in the afternoon.

The committee’s decisions at the Jan. 30 meeting were a mix of narrow approvals to preserve program continuity and holds to allow more review of larger transfers and new program proposals.