Joint Fiscal Office outlines Budget Adjustment Act, flags opioid, childcare and nursing facility items

Emily Byrne, deputy director of the Joint Fiscal Office, told the Appropriations Committee that the Budget Adjustment Act is a midyear mechanism to correct assumptions in the current fiscal-year budget and to reallocate newly available or shortfall revenue.

"A budget is just a plan," Byrne said, stressing that projections made during the budget-writing process are routinely updated and sometimes materially different from actual receipts and expenses.

Byrne reviewed why the BAA exists: the Governor signed the FY2025 budget on May 23, 2024, FY25 spending began July 1, 2024, and in the months since the original forecast can change. She said the Emergency Board adopted a revised July revenue forecast that increased projected General Fund receipts by about $172,000,000 for the current year and that the board was scheduled to set a further forecast at its next meeting.

The JFO briefing described common drivers of midyear adjustments: caseload and utilization changes in programs such as Medicaid and childcare, federal matching-rate (FMAP) changes that affect state general‑fund obligations, timing shifts for projects and contracts, realized or unrealized vacancy savings, and difference between assumed and actual receipts (for example sports‑betting revenue). Byrne noted that some line items in the BAA are intended to be technical or ‘‘net‑neutral’’ transfers that move appropriation authority into the correct accounts.

Byrne and members flagged a set of items the committee should review closely. The presentation identified the childcare special fund as an area with increased revenue and lower-than-expected spending, creating a potential surplus that the Legislature must decide how to treat. The packet also called out an appropriation described in the materials as $40,000,000 for nursing facilities (the transcript identifies this line as associated with "Dale"); committee members were urged to examine that allocation closely.

Byrne described a clarification included in the BAA and the chairs' letter of intent relating to opioid‑abatement funds for treatment sites. The administration had proposed allocations that created ambiguity about whether $1.5 million should be split among three or four treatment centers. The JFO materials and the appropriations letter of intent clarified that the total allocation is $2,000,000, with $500,000 specified for the Howard Center in Chittenden County and the remaining amounts divided as directed in the bill language.

Committee members raised questions about the Agency of Digital Services (ADS) chargebacks to departments, noting ADS increases are embedded across many agency budgets. Byrne pointed members to the JFO website where the BAA worksheet displays changes by department (rows) and fund (columns), including General Fund, Transportation Fund, Education Fund, special funds and federal funds.

Chair-designated committee members outlined timing: Byrne and the JFO urged members to review the materials on the Appropriations Committee and JFO websites, meet with departmental staff where needed, and prepare recommendations quickly. The committee requested recommendations by the close of business on February 23; Byrne noted the BAA typically is among the first bills the General Assembly considers because it adjusts spending that affects current operations.

The JFO also explained that some adjustments are documented in the Appropriations Act ‘‘C section’’ or in letters of intent from the committee chairs; those vehicles are used to make clarifying language or contingent appropriations after initial budget passage. Byrne encouraged members to focus on major changes for this midyear adjustment and reserve deeper review for the FY2026 budget process.

The session ended with staff help-offers and procedural reminders about where to find the full spreadsheets and department presentations on the JFO website.