Corrections & Institutions panel reviews two-year capital bill spreadsheet, bonding capacity

The Health, Corrections and Institutions committee on Jan. 9 examined the spreadsheet that tracks the enacted two‑year capital bill and discussed how bonded and cash funding is allocated across fiscal years.

Scott Moore, an attorney with the fiscal office, walked committee members through the spreadsheet and the bill text, saying, “This is the bill that we put together and the final version on the House and Senate. This is now session law. It is not in the green books. It is law, but it is session law.”

Moore and committee members emphasized that the capital bill is a two‑year process: enacted line items reflect amounts for the first and second fiscal years, and the committee can move dollars between those years during budget adjustment and markup. Committee members were told the governor’s budget recommendation is expected Jan. 28 and that the committee will use that, plus its own markup, to reconcile totals across columns representing Acts 69 and 162.

Why it matters: Bonded dollars and cash funds in the capital bill are treated differently and carry limits that shape what projects can be funded. Moore warned that bonded dollars are not interchangeable with general fund dollars and noted restrictions on their use: they cannot be used for ongoing operating costs or short‑lived items and are structured around multiyear payback periods.

Key details from the meeting: - Committee staff reported a working target of $100 million in bonding capacity for the next biennium, split as $50 million each year for FY26 and FY27, with a planned reassessment in August–September for FY27. Moore said the state treasurer will brief the committee next week on bonding capacity and the debt affordability process. - The spreadsheet shows enacted amounts from the 2023 session (Act 69) split into the two fiscal years and adjusted in the second year column for Act 162. Committee members were reminded that fiscal discussions refer to fiscal years (FY) — e.g., FY25 runs July 1, 2024–June 30, 2025 — not calendar years. - The capital package includes both bond‑funded and cash‑funded components; the cash component is used where bonding is not appropriate (for example design or early planning). Moore said some projects appear in both components, so total project cost can be the sum of both lines. - The Clean Water Fund was used as an example of how multi‑year allocations are handled: the committee had earmarked roughly $9.8 million in FY24 based on Clean Water Fund Board recommendations, and held a $6 million placeholder for FY25 to be allocated after the board’s recommendations are finalized. The Clean Water Fund supports projects tied to Vermont’s TMDL (total maximum daily load) obligations for Lake Champlain and Lake Memphremagog, work coordinated with the U.S. Environmental Protection Agency.

Committee process and schedule: Moore explained that markup sessions in February will revisit each line, based on departments’ testimony and spend‑down reports. Departments will be asked to supply recent allocation and expenditure data so the committee can decide whether to reduce, increase or reallocate amounts. Moore said the committee typically runs multiple passes through the spreadsheet to get the total to fit the bond-capacity “box.”

Spending constraints and technical limits: Moore and members flagged federal arbitrage rules and other restrictions that require bonded proceeds to be spent in a timely way. “It’s not like your general fund dollars. It’s your credit card,” Moore said, adding that bonded investments are structured around a roughly 20‑year payback period to match project useful life.

Other examples: The group discussed line items such as statewide major maintenance, statehouse historic finishes and cafeteria furnishings (replacement chairs and more accessible tables after flood losses). Moore noted those are typical kinds of projects that appear in the spreadsheet and can be adjusted between years.

Next steps: the state treasurer will present on bonding capacity and the debt affordability committee’s recommendation at a future meeting; the governor’s budget comes Jan. 28; departments will be asked to provide spending/earmark summaries before testimony; and the committee will begin formal markup in February.

Ending: Committee members and staff agreed to schedule follow‑up briefings (including a joint fiscal briefing on the capital fund structure), and to circulate a standardized questionnaire for departments to return prior to testimony so line‑by‑line decisions are informed by recent spend‑down and earmark status.