Committee hears history of Vermont Correctional Industries deficit; assigns members to draft parameters before recommending $3.1 million fix

The House Corrections & Institutions Committee on Jan. 22 heard detailed testimony about a long-running deficit in Vermont Correctional Industries (VCI) and directed three committee members to draft broad parameters to accompany any budget adjustment that would erase the balance.

Lynn Platt, financial director for the Department of Corrections, described VCI's original purpose as a set of production shops and work crews that provided vocational training, employment income and a matched-savings program for incarcerated people. Platt said VCI once operated multiple shops (woodworking, printing, sign and steel, plate-making and graphic arts) and a community work-crew program that performed municipal tasks. Over time, the program contracted; many shops closed, operations were suspended during COVID-19, and revenues fell while legacy expenses and closure costs accumulated.

Platt told the committee the VCI cash balance is in deficit by roughly $3.1 million and that the remaining operations are now limited to two small shops (license plates and a small graphic-arts operation). "We sold everything through surplus as we are required to do, and we got pennies on the dollar," Platt said, describing attempts to dispose of equipment after shops closed. She said the plate and graphic-arts shops now generate only a minimal net positive (Platt estimated roughly $30,000 net in FY26), meaning it would take many years to repay the accumulated deficit through ongoing operations alone.

Linda Ladd, a Department of Corrections financial director who has overseen correctional industries work, explained the program's vocational transition: DOC shifted from a self-supporting production model toward a vocational training model tied to certifications and reentry services. The department has moved many staff costs into correctional services and is using grants and seed funding (including Act 183 funds) to stand up vocational programming, Ladd said.

Committee members expressed frustration that the deficit grew over multiple years without earlier notice and asked for documentation on prior appropriations and past corrective steps. Several members said they were open to clearing the $3.1 million deficit so DOC could "clean up the books," but they also sought guardrails so the same shortfall would not recur. The committee did not take a final vote on a fund fix during the meeting; instead members assigned Representatives Troy, Mary and James to draft broad parameter language to accompany the governor's adjustment and to return with that language to the committee the following morning so the committee could act before transmission to Appropriations.

Why it matters: VCI historically provided paid work and a matched-savings option for incarcerated people; the program's contraction and the current deficit raise questions about how the state balances vocational training goals, the price of services sold to state agencies and municipalities, and the cost of operating programs that no longer generate sufficient revenue.

Next steps: Committee staff will provide the committee with historical appropriation documentation and prior one-time payments; the three assigned members will prepare parameter/intent language to accompany any recommendation to Appropriations. DOC staff said they will provide figures showing revenues, prior one-time appropriations and the timeline of the deficit.