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Lawmakers press treasurer on proposal to take $15M from higher‑ed fund; treasurer previews unclaimed‑property changes to support Vermont Saves
Summary
Members questioned how a governor-recommended $15 million withdrawal would reduce future scholarship dollars; Deputy Treasurer David Sherritt said the treasurer would only support statutory changes with agreement from the three beneficiaries and previewed an omnibus bill to raise the unclaimed-property threshold to support Vermont Saves and funnel remaining funds to higher ed.
At a Feb. 18 House Appropriations Committee hearing, lawmakers probed the fiscal and policy consequences of two separate proposals affecting the Vermont Higher Education Endowment Trust Fund.
Chair (Unidentified) told the panel the governor had recommended ‘‘taking $15,000,000 out’’ of the fund for an administration project that would require statutory change. Committee members warned that reducing principal would shrink future distributions: ‘‘You are reducing the principal by $15,000,000, which means that the interest available is going to be less, and it's gonna be less in scholarships over time because... the 5% is of fewer assets,’’ one member said.
Deputy Treasurer David Sherritt said the treasurer’s office would favor changes only if the three statutory beneficiaries — the University of Vermont, the Vermont State Colleges and the Vermont Student Assistance Corporation — agreed. ‘‘Any proposal to change the way the higher ed trust fund works needs to have the agreement of all 3 beneficiaries to the higher ed trust,’’ Sherritt said, and he told the committee he was not aware of beneficiary agreement as of his most recent check.
Separately, Sherritt outlined a provision in the treasurer’s omnibus bill intended to sustain a new program called Vermont Saves (a retirement‑savings program administered from the treasurer’s office). The proposal would raise the unclaimed‑property transfer threshold from $100 to $150 for accounts older than 10 years; funds sweep first to the Vermont Retirement Security Fund (which supports Vermont Saves) up to a modeled need, with remaining eligible transfers flowing to the higher‑ed trust fund, subject to an annual cap of $300,000.
Sherritt said Vermont Saves currently has about 5,500 enrollees and roughly $5 million in assets under management; the treasurer’s model projects the program reaching self‑sufficiency by FY2033 given expected growth, at which point unclaimed‑property sweeps to Vermont Saves would no longer be needed. For FY2027, Sherritt estimated Vermont Saves would need about $242,000 from those unclaimed‑property transfers to bridge costs.
Committee members asked for the treasurer’s full model assumptions (participant and asset growth), a fiscal-year series showing principal and interest available, and minutes identifying current council membership; Sherritt agreed to send the materials. No committee votes were taken on either the governor’s recommendation or the omnibus language during this meeting.
