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Agency of Human Services seeks $3.75 billion for FY27; proposes $9.9M in program cuts and flags $195M rural health fund uncertainty
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Summary
At a March 10 Senate Appropriations Committee hearing, AHS Secretary Jenny Samuelson outlined a $3.75 billion FY2027 request (6.1% GF increase), citing FMAP shifts, caseload pressures and the need to annualize one-time programs; the agency proposed targeted reductions including refugee transitional housing and an education loan repayment program while saying $195 million in rural health transformation funds are available but not yet fully defined by CMS.
Jenny Samuelson, secretary for the Agency of Human Services, told the Senate Appropriations Committee on March 10 that the agency's FY2027 budget request totals $3.75 billion and represents a 6.1% increase in general-fund authority driven largely by caseload and utilization pressures and changes in federal matching rates.
"There were some hard I want to acknowledge there were some hard choices that we needed to make, but we feel like we really balanced what the needs were of Vermonters as well as our fiscal responsibility," Samuelson said, summarizing the leadership's year-long review of programs and prioritization process.
Why it matters: the request would preserve core services while shifting some one-time investments into base funding (shelter investments, pretrial supervision expansion, opioid recovery employment programs) and proposing eliminations or reductions to underused or duplicative efforts. Committee members questioned whether programs were cut solely because they were not statewide; Samuelson said the agency reviewed the reasons and made "case-by-case" decisions to avoid eliminating services that should remain regional.
Major drivers and specific requests: Samuelson listed $26.6 million in general-fund need to backfill a small FMAP decline (federal medical assistance percentage falling from 58.81% to 58.07%), $4.5 million to cover a loss in SNAP administrative match (federal share reduced from about 50% to 25%), and $8.7 million to address a childcare special-fund revenue downgrade tied to payroll-tax collection. She attributed $278.8 million in general-fund caseload and utilization pressure mainly to Medicaid/global-commitment adjustments and developmental-services trends.
On staffing and eligibility work, the agency requested $21.3 million in salary and fringe, including funding for about a dozen new Medicaid enrollment and eligibility (HABU) staff to implement more frequent redeterminations after federal changes.
Program reductions and contested eliminations: Samuelson identified roughly $9.9 million in proposed program reductions and eliminations. Examples included a $500,000 reduction to a refugee transitional housing line (she said lower refugee arrivals reduced utilization), repeal of a DIVA Medicare-assistance contract the agency said is not producing results, elimination of a $2.1 million general-fund ACO per-member add-on payment, and ending an education loan repayment line (largely supporting nursing workforce training).
Senators pressed the agency on alternatives and trade-offs, particularly around workforce supports. Samuelson said Vermont has been approved for roughly $195 million in Rural Health Transformation funds, which must be spent within federal timelines and may be renewed and rebalanced over five years. "The state of Vermont has been approved for a $195,000,000," Samuelson said, but she and agency staff warned that CMS guidance on a Vermont-specific definition of "rural" will determine what the funds may pay for and whether loan repayment is an eligible use. The agency also emphasized some rural workforce investments (tuition assistance) are already planned within that fund.
Mental health and forensic evaluations: Emily Haas, commissioner of the Department of Mental Health, told senators that DMH largely performs court-ordered competency evaluations as a pass-through and that increases stem from more orders overall and shifts in who is referred (including more misdemeanor-related evaluations), a trend that has raised costs and contributed to budget pressure.
Waiver and Global Commitment: Samuelson said the governor's budget includes language to pursue renewal of the Section 1115 waiver (Global Commitment) and that the state is budgeting for actuarial and technical assistance to negotiate with CMS; she cautioned that some waiver components are uncertain and that CMS priorities will shape cost and program scope.
Next steps: Senators requested more line-item detail on how proposed cuts relate to on-the-ground services, and the agency agreed to return with more specifics on rural transformation spending, workforce-program alternatives and exact dollar comparisons for eliminated programs. Supplemental materials (ups-and-downs packet, line-item spreadsheets, carryforward/reversion lists and single-audit findings) were cited as available on the committee's website.
The committee did not take a vote; agency staff and commissioners will provide follow-up briefings and worksheets at the request of senators.
