Bill language would let legislature and Emergency Board access small portion of balance reserve in emergencies

Committee staff described proposed changes to 32 VSA 308C that would permit the General Assembly to unreserve and appropriate up to 5% of the general fund balance reserve during a session for emergency appropriations. The amendment responds to recent years in which the balance reserve received no new contributions; under the earlier formula tied to 50% of prior-year additions, a zero prior-year contribution would prevent any emergency access.

Adam Greshin explained that the balance reserve currently holds roughly $98 million and that changing the access formula to 5% of the reserve would permit the legislature to unreserve nearly $5 million for emergency needs during session. The proposed language also gives the Emergency Board a limited mechanism to access the reserve when the legislature is not in session, but the administration and members discussed statutory limits: the Emergency Board cannot create new appropriations and can only move funds between existing appropriations. The proposed approach would allow the Emergency Board to reimburse departments for extraordinary expenditures out of existing appropriations up to the originally appropriated amounts, then offset those ledgered expenses from the reserve.

Representative members asked how the limit would work in large-scale emergencies; staff said the legislature could always call a special session for major needs, and that the proposed change was intended to ensure some mechanism to access reserves in ordinary emergency situations when contributions have not recently been made.

Ending: The committee received the technical statutory drafting and discussed trade-offs between reserve access flexibility and safeguarding the stabilization reserve; staff and members said they may revisit parameters but presented the 5% approach as a pragmatic fix for years with no prior-year contributions.