Health Department proposes cuts to two workforce programs and unused drug-repository in tight FY27 budget

The House Appropriations Committee heard from Department of Health Commissioner Rick Hildebrand and Financial Director Megan Polk on Friday as the department sought support for its FY27 spending plan.

Hildebrand said the department's FY27 budget is "just over $221,000,000," a 1.2% decrease from FY26, and that federal funding remains the single-largest source while general funds account for roughly 11% of the total (combined general fund and state share of global commitment about 22%). He told the committee the department is proposing three program eliminations to close the gap: two workforce-development lines and the planned prescription drug repository implementation, which the department has been unable to operationalize.

Polk provided program detail on the workforce reductions and described the single largest cut as a set of tuition-reimbursement and scholarship activities run in partnership with the University of Vermont and VSAC. Polk said the tuition- and scholarship-related funding under discussion totals about $4,200,000 and that the programmatic breakdown includes roughly $3.4 million for nursing, about $420,000 for primary care and advanced practice providers, $190,000 for dentists and about $100,000 for other categories.

Committee members pressed the department for outcome data before cuts are finalized. One member asked "can someone give us a spreadsheet that says here's what's we're reducing, who it served and whether we gain or lose overall workforce capacity?" Polk agreed to provide the requested spreadsheet and service counts.

Lawmakers questioned cutting workforce programs while citing statewide shortages. A committee member noted prior estimates of a shortage of "maybe 5,600 nurses and over 300 physicians," and asked how eliminating these programs would affect recruitment and retention. Hildebrand acknowledged the difficulty of the choice and said the department must weigh programmatic services to individuals against workforce investments in a tight budget year: "When you're stacking it against programs that are providing services to people versus these programs, that's where some of these decisions came." (Hildebrand)

Polk and Hildebrand said the department hopes some workforce functions can be redesigned around federal grant opportunities such as the Rural Health Transformation Program, but that certain grants contain clauses that limit their use for tuition reimbursement.

Policymakers asked for clarity on program performance and retention: "Outcomes are important," Hildebrand said, and multiple members repeated requests for the department to show how many participants remain in-state after program participation.

Next steps: Committee staff will receive the department's detailed budget books and the requested spreadsheets; the hearing closed with the department offering follow-up materials and the committee scheduling further review.