The Senate has given preliminary approval to a $367 million spending package, a measure that would spend tens of millions of dollars on retention and recruitment bonuses across human services programs, housing initiatives and debt reduction — among a dizzying array of other initiatives.
The package is the Senate’s response to a House-passed budget adjustment bill approved last month. The lower chamber can now choose to accept the Senate’s changes and send H.679 to the governor’s desk, or propose yet more amendments.
The budget adjustment act is usually a quiet affair that makes minor tweaks to the current year’s annual budget, while big policy initiatives and debates are reserved for the annual budget bill. But with unprecedented amounts of federal cash to spend quickly, this year’s process is a different story.
Republican Gov. Phil Scott and the Democratic-controlled Legislature have repeatedly butted heads over the best use of Vermont’s federally funded windfall. The governor has argued that the one-time money must be reserved for transformational projects that mostly require one-time capital investments. Lawmakers, meanwhile, have been just as eager to spend on people and programs.
These disagreements are playing out again here. Of particular concern to the Scott administration: a $60 million recruitment and retention grant program that would send one-time bonuses to thousands of workers across the state’s human services sector.
The bonuses were originally the governor’s idea. But lawmakers doubled the amount, using $30 million in American Rescue Plan Act funds, and expanded the number of eligible employees.
Vermont still has about $500 million left to spend in rescue plan funds, plus eye-popping surpluses and some $2.2 billion coming from the infrastructure deal passed late last year. But administration officials argue the money will nevertheless go quickly, and should be used more strategically.
The measure passed, 24-6, with near-unanimous opposition from Republicans. Sen. Rich Westman, R-Lamoille, who sits on the budget-writing Senate Appropriations Committee, was the lone GOP senator to vote with Democrats and Progressives.
“Housing, broadband: These are expensive. And that’s why they haven’t been done. So to take half a billion dollars and reduce it by 20% — which is what they’re doing — that is a big deal,” said Adam Greshin, Vermont’s commissioner of finance and management, in reference to the Senate bill’s total American Rescue Plan spending.
But Democratic lawmakers say the need to retain frontline staff is critical as Vermont and the nation see an upheaval across low-wage sectors. The Senate also added a requirement that bonuses be conditional on workers sticking around for at least a year.
The budget adjustment bill is sprinkled with other non-infrastructure-related rescue plan spending. There’s $6 million for the Vermont Foodbank, for example, and $10 million for the Vermont State Colleges to continue a popular free tuition program for another year. Another $6 million also has been set aside for child care worker bonuses.
But the legislation is also notable for what it does not include.
Scott had requested to spend $80 million among three housing initiatives. The House agreed to two, totaling $75 million, but axed a $5 million program that would help subsidize home-building for middle-income families struggling to enter the housing market. (Lawmakers have said they’re willing to entertain the administration’s proposal for a so-called “missing middle” program during the regular budget process, but need to see more details.)
Meanwhile, the Senate has whittled the $80 million requested by Scott down to $55 million — at least in the budget adjustment act. They’ve kept out the $5 million the House removed, and also nixed a $20 million appropriation to the Vermont Housing Improvement Program, which would help pay for new accessory dwelling units or help landlords rehab vacant or code-violating properties.
Senate Democrats say they intend to eventually give the program that $20 million. But they’re now planning to attach it to S.210, an update to S.79, a rental registry and safety bill that Scott vetoed last year.
Last year’s renter protection bill also included language that created the housing improvement program, and senators say that new appropriations should be paired with legislation that officially establishes the Vermont Housing Improvement Program into law.
After Scott’s veto, the administration went ahead and created the program anyway, since an initial pot of money had been set aside in the 2022 budget. Lawmakers counter that was a suspect move.
“We are not repeating the problem that was created last year and we’re having the money and the policy travel together,” said Sen. Jane Kitchel, D-Caledonia, who chairs the Senate Appropriations Committee.
But taking the housing improvement program’s earmark and putting it in S.210 is also widely seen as an attempt to force Scott to negotiate over a bill he does not like. And Republicans argue it is an unnecessary delay.
“The governor believes that any postponement of revenue directed towards housing is a move in the wrong direction,” Greshin said.
