VSEA Strategic Analyst Adam Norton’s State Budget Proposal Breakdown

February 23, 2024

Governor Scott has introduced his FY25 budget, covering July 2024 to June 2025. This is an $8.6 billion budget in total, split between the General, Education, Transportation, and Special funds.

After years of significant growth fueled by significant federal infusions, State revenues are now leveling off. In fact, General Fund revenues are projected to fall by $17 million from FY24 to FY25, however, this is less than 1% of General Fund revenue. The Governor’s FY25 budget is a return to the pre-Covid years of austerity and half-baked budget proposals and gimmicks to achieve fiscal balance.

The Vermont legislature has their work cut out for them to build a budget the state can afford while meeting the various needs of the state, including housing, substance use, and public safety, without the federal funds Vermont has relied on the past three years.

The Governor’s recommended budget includes relatively few initiatives, a sign of the tightening fiscal environment. Below are the few proposed ongoing initiatives funded in the governor’s budget:

$9.9 million Global Commitment funds ($4.2 million General Fund) to increase Medicaid reimbursement rates for nursing homes;

$9.3 million Global Commitment funds ($3.9 million General Fund) to adopt the Medicaid “AHEAD” model;
$1.7 million to make permanent twelve mental health workers in our state police barracks and add eight additional mental health professionals;
A 3% increase in the base appropriations for the Vermont State Colleges, UVM and VSAC;
$2 million in foregone revenue collection to lift the cap on the Downtown and Village Center tax credits from $3 million to $5 million annually to increase housing stock in downtowns and villages;
Ongoing funding for 180 new emergency shelter beds through the Department for Children and Families;
Invests $4.9 million opioid settlement funds to expand staff and hours of operation in three or more existing hubs, expand school-based prevention services and transitional housing services.

The Governor proposed $54 million in one-time spending proposals, including the following:

$1 million for start-up costs for a psychiatric youth inpatient facility at Southwestern Vermont Medical Center;
$1 million to Vermont State University’s Community College of Vermont for their Vermont Tuition Advantage Program;
$5 million in bridge funding to Vermont State Colleges to help with operational expenses as they transition to a sustainable, unified institution of higher education;
$12.5 million to assist municipalities with their state match requirements for FEMA assistance;
$6 million for the Vermont Housing Improvement Program brings vacant rental units up to code;
$2 million for the Manufactured Home Improvement and Repair Program to provide additional assistance to income-eligible mobile home parks;

VSEA has identified the following issues pertinent to VSEA members in the Governor’s FY25 Recommended budget:

The Governor’s budget closes the Salisbury Fish Hatchery, RIFing four state employees and decimating Vermont’s trout stocks.
The Governor’s budget recommends vacancy savings in the Department of States Attorney’s and Sheriffs equivalent to nine Deputy State’s Attorney positions and one Victim’s Advocate, however that number of vacancies does not exist, thus adoption of this budget recommendation would result in layoffs.
The Governor’s budget proposes half of the necessary bridge funding for the Vermont State Colleges and does not adequately address inflationary pressures on the VSC’s base funding.
The Governor’s budget neglects to address the case log and court security needs in the Vermont Judiciary by failing to fund ten new Judicial Assistants, five IT positions, 17 Court Security Officers and 7 Sherriff’s Deputies.
The Governor’s deal funds the ADEC+ (Actuarially Defined Employer Contribution Plus) funding agreed to by the 2021 Vermont Pension Task Force with one-time funds, instead of base funding. The ADEC is fully funded.

This has been a brief review of the Governor’s FY25 Budget recommendation. The House Appropriations Committee is currently diligently taking testimony to craft their own budget document. VSEA legislative staff will continue to provide VSEA members with legislative updates on issues impacting them as the legislation session progresses.