House Appropriations reviews governor’s Budget Adjustment Act proposing nearly $197 million in new funding and transfers
January 12, 2025 | Appropriations, HOUSE OF REPRESENTATIVES, Committees, Legislative , Vermont
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The House Appropriations Committee on Jan. 10, 2025 got its first full briefing on the governor’s proposed Budget Adjustment Act, a mid‑year package the administration says would make roughly $197 million available for current and future fiscal needs after July forecast updates.
Commissioner Adam Gresham and Deputy Commissioner Artie Merrill of the Department of Finance and Management told the committee the July Emergency Board (eBoard) revenue forecast increased expected revenue by about $184,900,000 compared with the January 2024 baseline. Of the roughly $197,000,000 the administration is allocating, approximately $110,000,000 is proposed for immediate appropriations and transfers; about $87,000,000 would be reserved for use in the FY26 budget, the presenters said.
Why it matters: the presentation flagged large health‑care and human‑services pressures that drove most requests, and it showed how the administration is matching special‑fund revenue changes, reversions and one‑time transfers to cover those pressures rather than proposing new policy. "This BAA contains little, if any, policy initiatives," Gresham told the committee, emphasizing the document is chiefly technical and corrective in nature.
Major budget movements and drivers
- Medicaid and long‑term care: The administration said human services accounts for roughly half of the spreadsheet adjustments, with large Global Commitment (Medicaid) increases. Gresham and staff described about $48,000,000 of general‑fund increase and a total increase of roughly $125,000,000 once federal matches are included in the Global Commitment column. Two nursing‑home components were highlighted: a $21,000,000 Global Commitment emergency financial relief payment and about $24,000,000 tied to higher utilization (additional bed days). Separately, an updated Medicaid consensus forecast added roughly $78,000,000 in gross spending; that line was partially offset by recognition of about $15,000,000 returned to the state after the Change Healthcare pharmacy rebate processing disruption, leaving a net movement discussed in B307 that the presenters described as about $54,000,000 on a net basis.
- Veterans Home: The committee was told the Vermont Veterans Home continues to face high operational costs, driven mainly by staff vacancies and extensive use of temporary/traveling staff; the administration said staffing and traveler costs are the dominant component of the Home’s requested increase and that the FY26 budget will seek a more realistic base to avoid repeated BAA dependences.
- Childcare/Child Development Financial Assistance: The Department of Children and Families reported a roughly $13,080,000 general‑fund utilization savings in the childcare subsidy program and an additional roughly $13,200,000 increase in payroll‑tax special‑fund receipts compared with prior estimates, producing about $26,000,000 of net general‑fund relief that the administration proposes to repurpose for other human‑services pressures.
- State employee health insurance: The presentation proposed a one‑time transfer into the state health benefits fund (the administration identified a general‑fund amount of about $18,500,000) intended to reduce the size of premium increases employees and the state will otherwise face next January. The presenters said calendar‑year premium increases that took effect Jan. 1, 2025 are about 15% and the one‑time transfer is intended to buy down future premium pressure and limit year‑to‑year spikes.
- One‑time appropriations and reversions: The language document and spreadsheet include numerous one‑time items (examples noted in the hearing: $4,000,000 contingent sustainability funding for mental‑health and substance‑use residential treatment; $1,000,000 for child‑support mainframe transition planning; $4,020,000 for Global Commitment match related to a pilot global payment program, split in the recommendation roughly $1,600,000 general fund and $2,300,000 federal). The administration identified about $19,500,000 in reversions to the general fund from unspent prior appropriations.
- Transfers and emergency board action: The administration identified several transfers it proposes in the BAA and noted one earlier Emergency Board action. Artie Merrill summarized an Aug. 8, 2024 Emergency Board motion the Board approved to dedicate $14,000,000 to emergency flood relief (split in the Board motion as $7,000,000 for a rapid response mobile‑home infill program and $7,000,000 for business emergency gap assistance); the BAA restores that funding to the treasurer’s bond‑redemption line as requested by the Board. Other transfers presented include a proposed Emergency Relief and Assistance Fund (ERAF) deposit of about $5,670,000 to cover state matching costs on FEMA repairs, an estimated $11,500,000 transfer to address a Liquor & Lottery enterprise fund deficit, and a roughly $4,000,000 additional net from unclaimed property receipts.
Committee review and next steps
Committee members and administration staff agreed the spreadsheet provides line‑by‑line detail but that committee members will want department‑level briefings. The administration said it will present language and additional detail at the committee’s next meeting; the committee planned a Tuesday session (Jan. 14) for deeper dives, including a Medicaid overview and further discussion of the BAA language. Several representatives pressed for detail on nursing‑home utilization, drivers of the veterans‑home cost pressures and the mechanics of special‑fund swaps (how payroll‑tax special‑fund receipts reduced general‑fund need in childcare). Gresham and Merrill repeatedly urged committee members to consult the language document (they pointed to page numbers and the narrative descriptions on the worksheet) and noted many items are technical corrections rather than new policy.
What the administration did not present or the committee did not decide
No formal committee vote on the BAA occurred at this briefing. The numbers presented are the administration’s recommendation; the committee will consider amendments and formal action in later sessions. The Emergency Board action described (the $14,000,000 flood relief dedication) was already approved by the Emergency Board in August 2024; other transfers and appropriations remain part of the BAA legislative process.
Ending note
Committee members were given the BAA spreadsheet and language document and told the documents include narrative explanations and line‑by‑line entries; the administration suggested starting with page 35 of the language document for the main bill language. The Appropriations Committee scheduled follow‑up detailed briefings on Medicaid, ARPA and recovery office matters in the next meeting cycle.
Commissioner Adam Gresham and Deputy Commissioner Artie Merrill of the Department of Finance and Management told the committee the July Emergency Board (eBoard) revenue forecast increased expected revenue by about $184,900,000 compared with the January 2024 baseline. Of the roughly $197,000,000 the administration is allocating, approximately $110,000,000 is proposed for immediate appropriations and transfers; about $87,000,000 would be reserved for use in the FY26 budget, the presenters said.
Why it matters: the presentation flagged large health‑care and human‑services pressures that drove most requests, and it showed how the administration is matching special‑fund revenue changes, reversions and one‑time transfers to cover those pressures rather than proposing new policy. "This BAA contains little, if any, policy initiatives," Gresham told the committee, emphasizing the document is chiefly technical and corrective in nature.
Major budget movements and drivers
- Medicaid and long‑term care: The administration said human services accounts for roughly half of the spreadsheet adjustments, with large Global Commitment (Medicaid) increases. Gresham and staff described about $48,000,000 of general‑fund increase and a total increase of roughly $125,000,000 once federal matches are included in the Global Commitment column. Two nursing‑home components were highlighted: a $21,000,000 Global Commitment emergency financial relief payment and about $24,000,000 tied to higher utilization (additional bed days). Separately, an updated Medicaid consensus forecast added roughly $78,000,000 in gross spending; that line was partially offset by recognition of about $15,000,000 returned to the state after the Change Healthcare pharmacy rebate processing disruption, leaving a net movement discussed in B307 that the presenters described as about $54,000,000 on a net basis.
- Veterans Home: The committee was told the Vermont Veterans Home continues to face high operational costs, driven mainly by staff vacancies and extensive use of temporary/traveling staff; the administration said staffing and traveler costs are the dominant component of the Home’s requested increase and that the FY26 budget will seek a more realistic base to avoid repeated BAA dependences.
- Childcare/Child Development Financial Assistance: The Department of Children and Families reported a roughly $13,080,000 general‑fund utilization savings in the childcare subsidy program and an additional roughly $13,200,000 increase in payroll‑tax special‑fund receipts compared with prior estimates, producing about $26,000,000 of net general‑fund relief that the administration proposes to repurpose for other human‑services pressures.
- State employee health insurance: The presentation proposed a one‑time transfer into the state health benefits fund (the administration identified a general‑fund amount of about $18,500,000) intended to reduce the size of premium increases employees and the state will otherwise face next January. The presenters said calendar‑year premium increases that took effect Jan. 1, 2025 are about 15% and the one‑time transfer is intended to buy down future premium pressure and limit year‑to‑year spikes.
- One‑time appropriations and reversions: The language document and spreadsheet include numerous one‑time items (examples noted in the hearing: $4,000,000 contingent sustainability funding for mental‑health and substance‑use residential treatment; $1,000,000 for child‑support mainframe transition planning; $4,020,000 for Global Commitment match related to a pilot global payment program, split in the recommendation roughly $1,600,000 general fund and $2,300,000 federal). The administration identified about $19,500,000 in reversions to the general fund from unspent prior appropriations.
- Transfers and emergency board action: The administration identified several transfers it proposes in the BAA and noted one earlier Emergency Board action. Artie Merrill summarized an Aug. 8, 2024 Emergency Board motion the Board approved to dedicate $14,000,000 to emergency flood relief (split in the Board motion as $7,000,000 for a rapid response mobile‑home infill program and $7,000,000 for business emergency gap assistance); the BAA restores that funding to the treasurer’s bond‑redemption line as requested by the Board. Other transfers presented include a proposed Emergency Relief and Assistance Fund (ERAF) deposit of about $5,670,000 to cover state matching costs on FEMA repairs, an estimated $11,500,000 transfer to address a Liquor & Lottery enterprise fund deficit, and a roughly $4,000,000 additional net from unclaimed property receipts.
Committee review and next steps
Committee members and administration staff agreed the spreadsheet provides line‑by‑line detail but that committee members will want department‑level briefings. The administration said it will present language and additional detail at the committee’s next meeting; the committee planned a Tuesday session (Jan. 14) for deeper dives, including a Medicaid overview and further discussion of the BAA language. Several representatives pressed for detail on nursing‑home utilization, drivers of the veterans‑home cost pressures and the mechanics of special‑fund swaps (how payroll‑tax special‑fund receipts reduced general‑fund need in childcare). Gresham and Merrill repeatedly urged committee members to consult the language document (they pointed to page numbers and the narrative descriptions on the worksheet) and noted many items are technical corrections rather than new policy.
What the administration did not present or the committee did not decide
No formal committee vote on the BAA occurred at this briefing. The numbers presented are the administration’s recommendation; the committee will consider amendments and formal action in later sessions. The Emergency Board action described (the $14,000,000 flood relief dedication) was already approved by the Emergency Board in August 2024; other transfers and appropriations remain part of the BAA legislative process.
Ending note
Committee members were given the BAA spreadsheet and language document and told the documents include narrative explanations and line‑by‑line entries; the administration suggested starting with page 35 of the language document for the main bill language. The Appropriations Committee scheduled follow‑up detailed briefings on Medicaid, ARPA and recovery office matters in the next meeting cycle.
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