Administration outlines governor’s capital budget, proposes cash‑fund formula change

Nick Kramer, a presenter for the governor’s capital budget team, told the Senate Committee on Institutions and Information Technology on Jan. 29 that the governor is recommending a capital bill built on roughly $110 million in bond capacity and a package of cash and bond appropriations across state agencies.

Kramer said the administration’s revenue picture for the capital bill begins with a Capital Debt Affordability Advisory Committee (CDAC) recommendation of $100 million in bond authorization, plus about $6.8 million in bond premium and prior‑year reallocations, producing a total bond capacity the presentation lists as $110 million. Kramer described the premium as the market payment that reduces the amount the state must issue when investors pay above par for a sale.

The administration also proposed a change to the statutory cash‑fund transfer language that governs how much of the state’s general fund is directed to capital projects. Kramer said the draft bill would replace permissive language and set an annual transfer at 4% of the last completed fiscal year’s general fund, after debt‑service estimates—the change is presented in the draft as a clarification to the existing cash‑fund statute.

Why it matters: the recommended structure determines which projects get state funding this biennium and influences the state’s ability to draw federal matching dollars. Kramer flagged a section of the draft that would unreserve previously held funds for the Agency of Natural Resources to draw federal Infrastructure Investment and Jobs Act (IIJA) match; the administration described the unreserved amount as intended to help ANR draw high federal matches for water and environmental projects.

Major priorities highlighted in Kramer’s overview included year‑to‑year maintenance lines at the Agency of Administration and Buildings and General Services (BGS); building repairs and HVAC upgrades across state facilities; public safety and corrections infrastructure; housing and community development grants; and clean water and natural resources projects.

Housing: Kramer said the governor’s recommendation includes appropriations to help three housing projects selected for readiness and leverage of non‑state funding. He cited Bennington as an example of a larger, mixed‑use project that the administration expects these capital dollars to help close out.

Corrections and public safety: the packet includes funding for statewide corrections HVAC upgrades and other life‑safety work; Kramer said the recommended funding would bring all but one facility to the stated standard, with the remaining Northwest State Correctional Facility appearing on the administration’s 10‑year plan. He also reiterated that about $16 million previously appropriated for planning and early work on a replacement for the Chittenden Regional Correctional Facility (the women’s facility) remains available, and the administration did not add new large appropriations for that project in this bill.

Natural resources and federal match: the draft bill contains an unreservation and appropriation intended to allow the Agency of Natural Resources to draw IIJA and other federal funds. Kramer described the funds as high‑value from a federal‑match perspective and said the unreserved amount follows a plan set aside in prior years.

Other items cited included maintenance and upgrades for state historic sites, university and state‑college capital needs, clean water state revolving fund match lines (adjusted to reflect current federal awards), military and public safety readiness centers, and courthouse projects at several locations. Kramer also noted a small temporary pause on roadside historic markers this year because of capacity constraints.

Kramer concluded by directing committee members to the draft bill and the spreadsheet in the materials; he said department testimony will follow in future hearings and that the draft bill is intended as a starting point for legislative amendments. The committee did not take formal votes during this hearing; staff and agency witnesses were scheduled to appear in later sessions for line‑level questions and testimony.