Ways & Means sends advice on governor's budget adjustment, backs childcare reserve and allocation changes

The Ways & Means Committee on Friday agreed to send a formal memo with recommendations on the governor's budget adjustment bill, endorsing changes to childcare funding, property transfer tax allocations, and a transfer to the Liquor Control Enterprise Fund while reserving further action on a proposal to remove a sunset on marriage-license fees.

The committee's advice, drafted by staff and reviewed in committee, recommends that appropriations for the Child Care Financial Assistance Program (CCFAP) be aligned with projected expenditures and revenues and that the committee explore formally establishing a reserve within the dedicated childcare fund to manage revenue and expenditure volatility. The committee also recommended changing the property transfer tax (PTT) allocation in the governor's proposed budget adjustment so allocations conform to the percentages the Legislature adopted in Act 113 rather than the statutory default the governor's language followed. The committee noted it was generally supportive of a transfer into the Liquor Control Enterprise Fund to restore balance and asked liquor and lottery staff for steps to avoid future deficits. On H.6, a bill to remove the sunset on an increased marriage-license fee, the committee agreed to continue discussion and review it again when the budget adjustment returns to the committee.

Why it matters: The memo will accompany the budget-adjustment bill as it moves through the Legislature; the items affect how new and existing revenue streams are routed to programs including childcare, regional and municipal planning, and special funds used for domestic-violence services.

Childcare (CCFAP) and a proposed reserve The committee supported aligning CCFAP appropriations to projected expenditure and revenue levels. Committee members discussed uncertainty in early collections from the new payroll tax dedicated to the childcare fund and said that uncertainty — together with the fund's newness — argues for a reserve to protect the general fund and program continuity. The chair summarized the committee's position: “we are not reducing any funding for it at all, and we continue our commitment to childcare.” Staff noted $13,000,000 initially came from the general fund into the new dedicated fund and that Joint Fiscal Office (JFO) will circulate a memo with additional details on timing and numbers.

Property transfer tax (PTT) allocations Staff told the committee the governor's proposed budget adjustment harmonized PTT language with statutory allocations, which would have reduced funding for regional planning compared with the allocations the Legislature adopted in Act 113. The committee recommended changing the allocations in the BAA so they match the Act 113 percentages the Legislature adopted (which shift a larger share to regional planning and smaller shares to municipal planning and the Vermont Center for Geographic Information). Committee staff laid out illustrative dollar effects discussed in committee: under the committee's recommended allocation the increase would direct roughly $1,000,000 more toward regional planning than the governor proposed; municipal planning would see a smaller portion of the increase than the governor proposed but still a modest increase (discussed as roughly $100,000 in committee comments); and the Vermont Center for Geographic Information would receive an increase from about $436,000 to roughly $507,000 under the committee approach rather than the roughly $905,000 figure in the governor's proposal.

Liquor Control Enterprise Fund transfer Committee members reviewed testimony from Commissioner Knight and recommended language that would permit a transfer from the Liquor Control Fund to restore balance to the enterprise fund. The committee noted general support for efforts to keep enterprise and special funds from running persistent deficits and requested advice from liquor-and-lottery staff on steps to prevent a recurrence.

Marriage-license fee (H.6) and domestic-violence special fund Committee members reviewed H.6, a bill discussed earlier in the session that would repeal a sunset and prevent the marriage-license fee from reverting to $60 on July 1. Under current law, absent action the fee would revert and the domestic-violence special fund would lose an estimated $72,000 annually; town clerks statewide would see about a $24,000 annual reduction. Committee members noted the fund brought in slightly less than $600,000 last year; revenue sources include $50 of the $80 marriage-license fee and a $13.50 share of a $47 judicial-bureau surcharge. Members expressed concern about the tenuous nexus between some dedicated fees and the programs they support and said the committee would continue to consider the policy and process implications; some members said the matter could be handled later in the regular budget process because the change is not effective until July 1, 2025.

Process and next steps Committee members agreed to send the memo with the recommendations as drafted and to take up the full budget adjustment bill when it returns to Ways & Means, at which point staff expect to present more detailed reserve language and JFO revenue estimates. The committee made no formal roll-call vote on the memo in the transcript; members expressed general assent during the meeting and staff will finalize the language for transmission.