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Experts warn absence of an appropriations act would halt many state payments, complicate services
Summary
At an April 9 House Appropriations Committee briefing, JFO analyst Emily Burn and committee members discussed that, under Vermont Constitution §27, no appropriation on July 1 would deprive the treasurer of legal spending authority, potentially blocking payroll, Medicaid and vendor payments and triggering litigation and bond‑rating risks.
At a House Appropriations Committee briefing on April 9, Joint Fiscal Office analyst Emily Burn told members that absent an appropriations act the state would lack the statutory authority to make most payments.
"Section 27 of the Vermont Constitution says, 'No money shall be drawn out of the treasury unless first appropriated by an act of legislation,'" Burn said, explaining the constitutional and legal basis for the committee's second JFO issue brief.
Burn warned that without appropriations the treasurer could not legally make payments and agencies would lack spending authority. "The administration could not write checks or spend any money," she told the committee, noting that some narrowly defined carry‑forward authorizations and a small emergency fund exist but that those tools are limited and usually require subsequent legislative action to unreserve funds.
Committee members and staff discussed specific operational consequences: weekly Medicaid payments and vendor contracts could be interrupted; SNAP and other benefits tied to federal/state administrative timing could be affected; construction season payments and municipal distributions could slow; and hospitals, nursing homes and contractors could face cash‑flow stress. Burn also said other states' experiences show courts typically decide on which employees count as "essential" and on employment claims, but courts cannot themselves create appropriation authority.
Members asked about reserves and emergency authorities. Burn said reserve accounts can be spent only by legislation and that the emergency board has a narrow, limited pool (described in briefing as about $42 million), so relying on those tools would not cover broad state spending.
The briefing noted long‑term financial and legal risks: JFO told the committee that a failure to pass an appropriations act could harm the state's bond rating and that shutdowns in other states led to litigation and backpay costs that in some cases made shutdowns net fiscal losers.
Next steps and policy implications: committee members debated whether to source statutory fallback language (for example, a continuing resolution) in future sessions. Burn and members agreed that the question is complex and that more study would be required; no immediate legislative remedy was proposed at the hearing.
Sources and limits: the article is based on the JFO briefing and committee exchange. Staff repeatedly cautioned that many operational outcomes would depend on later legal interpretation and town‑level administrative practices and therefore remain uncertain.
