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Senate Government Operations schedules hearing to clarify whether municipalities can reallocate unspent funds under Act 57
Summary
Committee chair said a question from a Readsboro resident about Act 57's treatment of "unassigned" municipal funds prompted a Friday hearing; the chair favors requiring voter approval, while the Office of the Secretary of State (as described in the meeting) supports allowing legislative reallocation. The committee will hear VLCT and related parties.
The chair of the Senate Committee on Government Operations said the panel will hold a follow-up hearing Friday to resolve questions about how Act 57 treats municipal "unassigned" funds after a resident of Readsboro raised concerns.
"I have a problem with that," the chair said after describing the constituent's question about money a municipality had previously authorized for a project but had not spent. The chair said the Office of the Secretary of State (referred to by committee members in the meeting) supports allowing municipalities' legislative bodies to divert unspent funds to other purposes, while the chair preferred that voters should be asked for permission before such reallocation.
Senator John White said he believed the Legislature had required a public vote in similar circumstances: "I thought that we allowed them to have a vote by their communities on what to do with that money," he said during the exchange. The chair disagreed with that recollection and scheduled the detailed discussion for Friday, warning the session could last at least an hour and may run until 3:30 or 4:00 p.m.
Committee members said they plan to hear representatives from the Vermont League of Cities and Towns (VLCT) and invited staff (including a staffer named Tucker) to the Friday meeting. The chair said the item grew out of a question about Act 57 — referenced in the meeting as having originated in an earlier bill (H397) — and that the committee would use the hearing to determine whether towns and cities must return to voters before using previously authorized but unspent monies.
The question affects municipal budgeting practices across the state by clarifying whether a municipal legislative body may re-allocate funds originally approved for one purpose if the money remains unspent in a later fiscal year. The committee did not take a vote on the matter during this session; members set the Friday hearing to gather testimony and legal guidance.
Next steps: the committee will hear testimony and legal interpretation at the scheduled Friday session and may decide whether to pursue statutory changes or agency guidance afterward.
