The Vermont House gave preliminary but unanimous approval on Thursday to a $358 million package that spends tens of millions on housing, one-time bonuses for frontline workers, and funds a one-time payment required to seal the deal on a tentative plan for pension reform.
The budget adjustment act is usually a sleepy affair, passed in the opening weeks of the legislative session, that makes minor tweaks to the current year’s annual budget. Larger policy debates are reserved for the budget — or the Big Bill — which gets hashed out in the waning days of the session.
But with the state flush with federal cash — and under pressure to spend quickly as both labor and housing shortages come to a head — this year’s budget adjustment bill, H.679, is a different story.
“No one in memory has seen something like this. It is extraordinarily different,” said House Appropriations Chair Mary Hooper, D-Montpelier.
Labor shortages — particularly in the lower-paid care work sector — have reached a crisis point, and the bill sets aside $60 million in one-time bonuses for thousands of frontline staff working with some of Vermont’s most vulnerable populations.
Eligible employees include staff in assisted living facilities, nursing homes, residential care homes, home health agencies, designated and specialized service agencies, substance use treatment providers and recovery centers. If the package is passed into law, Hooper estimated the average worker would receive about $3,000.
The retention payments originally were proposed by Gov. Phil Scott, although House lawmakers decided to double the money suggested by the Republican chief executive and expand the number of eligible workers. Separately, the bill also allocates $6 million for retention payments to child care workers.
The governor also had sought about $80 million from lawmakers in the budget adjustment for housing initiatives, and the House’s spending bill largely funds his proposals.
Included are $55 million to the Vermont Housing and Conservation Board to increase shelter capacity and build about 250 units of housing, primarily for those exiting homelessness. There’s also $20 million set aside for the Vermont Housing Improvement Program, which will help pay for new accessory dwelling units or help landlords rehab empty properties that need to be brought up to code. Lawmakers, however, axed a $5 million proposal pitched by administration officials to pilot a program subsidizing home building for middle-income families.
Legislative leaders recently hammered out a deal with public sector unions on pension reform that requires the state to pony up a $200 million one-time payment to help pay down the retirement system’s debts.
The bulk of that — $150 million — was set aside by lawmakers last year in a special reserve fund, and the budget adjustment bill tops this off with an extra $50 million. Between the extra money the state and workers are agreeing to put into the pension system as part of the deal, Vermont’s unfunded retirement liabilities are projected to go down by about $2 billion.
The governor also had proposed that the state spend some of its windfall paying down about $50 million in assorted debts. House lawmakers agreed in part, and the spending bill retires nearly $20 million in transportation bonds. But Hooper said some of the money Scott was proposing to spend cleaning up the state’s balance sheet could go further elsewhere.
“When I look at that versus spending $200 million in total, and being able to buy down our pension liability by $2 billion — there’s no comparison,” she said.
Scott has yet to say whether he’ll sign off on the pension overhaul.
Even smaller line items in this year’s budget adjustment carry quite a bit of policy heft. The package, for example, would send an additional $9.7 million to the Vermont State Colleges, allowing the system to extend for a second year a popular free tuition program for students pursuing degrees in critical shortage areas.
The budget adjustment bill is up for a second and final reading on the House floor Friday. It will then head to the Senate.
