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House Appropriations Committee weighs using one‑time funds as provider tax creates $18.5M FY28 gap
Summary
The Vermont House Appropriations Committee reviewed a draft FY27 budget that relies on about $20 million in one‑time and base funds and discussed the prospect of an $18.5 million provider tax reduction hitting FY28. Members debated tapping IT modernization interest and reserves versus preserving capacity for future years.
The House Appropriations Committee met March 19 to review a draft FY27 budget and to begin planning for FY28, when a provider‑tax reduction and other eligibility changes could reduce revenues by roughly $18.5 million.
Chair opened the meeting by saying JFO and administration data show roughly $20,000,000 in combined base and one‑time funds available for FY27, contingent on passage of a miscellaneous tax bill and by drawing interest from the IT modernization fund. “You’ll see on here that there’s about $20,000,000 of both base and onetime that we were able to find,” the Chair said, adding that tapping interest in the IT modernization fund is where most one‑time funds would come from.
The committee focused on tradeoffs between using one‑time dollars now and preserving capacity for a projected FY28 shortfall. “The provider tax reduction is gonna get into play. That’s 18 and a half million dollars,” the Chair said, noting that without those revenues the next fiscal year could look markedly different.
Members debated options for covering near‑term needs. One member urged using state surplus and reserves to protect vulnerable Vermonters this coming year, arguing federal policy and rising costs are already harming households. “I’m in to using our state tax dollars, especially ones that are considered surplus, to helping humans get through the next year,” that member said.
Another member cautioned against drawing down long‑term reserves and noted the state currently holds substantial savings. “Depending how you count it, we have well over $300,000,000 in reserves…if you add the money that we set aside last year, it’s upwards approaching $400,000,000,” the member said, urging prudence.
Committee discussion also addressed the administration’s ERP (enterprise resource planning) transition and the IT modernization fund. Members warned ERP conversions require multi‑year investments for training and redundancy; Chair said about $11,800,000 remains allocated to the ERP project but that the modernization fund also contains other planned projects. One member cautioned that using the fund’s interest now could reduce money intended for future IT projects.
Multiple representatives raised process questions about how to track new or converted positions relative to the Governor’s Recommendation (GovRec) and whether policy committees have capacity to review long‑running programs and special funds. Several members suggested targeted off‑session work or task forces to audit program effectiveness and identify inefficient or obsolete line items.
The committee did not take formal votes during the session. Chair summarized that members appeared to agree on using the identified FY27 sources as a starting point for the draft and asked colleagues to review priorities; Martin was scheduled to brief the group at 11:15 on judiciary changes in ACE 772 and related homeless‑youth bill provisions.
Clarifying details recorded in committee discussion include: identification of about $20,000,000 of combined base and one‑time funds for FY27 (contingent on a miscellaneous tax bill), an $18.5 million provider‑tax impact projected for FY28, approximately $11,800,000 remaining for an ERP project in the IT modernization fund, and state reserves characterized in discussion as “well over $300,000,000” and approaching $400,000,000.
The committee planned offline follow‑up and a return to public discussion and drafting of report language; no formal appropriations votes were recorded in the transcript.
