The Vermont House advanced an $8.5 billion state budget with a late-night vote Thursday, bringing the so-called big bill one step closer to becoming law.
By a 98-34 vote, representatives advanced H.494, a spending plan dedicating tens of millions of dollars to alleviating Vermont’s ongoing housing crisis, offering lagging Medicaid reimbursement rates a boost, and setting aside funding for yet-to-be finalized child care and paid family leave proposals.
Debate on the bill was minimal. It faces a final vote in the House on Friday, after which it would head to the Senate for consideration. There, it’s likely to be altered significantly before the two chambers reconcile competing versions. And though Democrats hold supermajorities in both the House and Senate, the threat of a veto by Republican Gov. Phil Scott looms large.
“I think the message that our budget sends to Vermonters is that we have your back, that we are supporting you with affordable housing, with child care, with paid leave, with workforce development and other supports for health care and community providers,” House Speaker Jill Krowinski, D-Burlington, told reporters earlier Thursday ahead of the floor debate.
While Vermont is still enjoying healthy revenues, state economists have warned of potentially darker times ahead. The budget advanced Thursday marks the Legislature’s first spending plan in years that doesn’t rely on the flood of federal pandemic aid pouring in from Washington.
One day before the House’s spending plan hit the floor, Scott told reporters that he was “very concerned with the direction we’re heading” in response to Democrats’ newly proposed and expanded programs, which would rely on increased ongoing revenues. The House’s budget outspends Scott’s own budget — proposed in January — to the tune of $60 million in ongoing base expenditures.
“I’m truly worried about the seniors on fixed income, the working families who can’t afford to pay more and the communities who need our help. And I worry about how we will possibly pay for all of this as we look towards an uncertain economic future,” Scott said. “In my opinion, if this budget were to pass, with all the big-ticket initiatives that come all at once, it has the potential to hurt Vermont in both the short and long run.”
In her remarks to reporters ahead of Thursday’s debate, Krowinski appeared visibly frustrated with Scott’s tone and his dangling of a veto threat. (Democrats and Progressives hold a commanding supermajority, with a combined 109 out of 150 seats. Should Scott, in fact, veto the bill, it would take two-thirds of those present to override it — 100 if all members were present.)
“After election night, people asked how we were going to show up and govern together with our majority and with him as governor, and I repeated time after time that it is important that we are coming to the table and working together to get things done,” Krowinski said. “And so I’m disappointed in this tone and then the threat that is on the table about a veto.”
The speaker then implored the governor to engage with lawmakers.
“It has a long, long way to go until this gets to his desk,” she said. “So I would ask for him to come to the table and to work with us.”
Before the budget reaches the governor’s desk, it needs to make it through the Senate. Though the two chambers have a similar partisan makeup, they have staked out different policy priorities since the start of the session — and that’s reflected in the budget debate.
Their respective approaches to child care and paid family and medical leave are particularly at odds. The House recently passed what would be the nation’s most robust paid family and medical leave program, but the Senate has taken a more modest approach.
The House proposal would offer Vermonters 12 weeks of paid leave to recover from a serious health condition, care for an ailing family member or a newborn child, flee domestic violence or address military-related issues. The plan proposes a 90% wage replacement, up to the state average weekly wage.
The Senate’s paid leave proposal, which cleared a key procedural vote Thursday, proposes 12 weeks of paid leave only to new parents. Asked if restricting the program to parents was a nonstarter for the House, Krowinski demurred.
“I’m not making any commitments around all of these,” she said. “I think it’s really important that we don’t start just putting up immediate guardrails with our Senate colleagues as we’re working on these programs because all of them are also really linked together, especially as we were talking about how we fund them.”
House budget writers did, however, appear to draw a line in the sand when it came to the Senate’s proposal to nix Vermont’s child tax credit — which offers low- and moderate-income families a $1,000 tax credit per child under 5 years old — in order to help pay for an expansion to the state’s existing child care stipend system.
Vermont’s child tax credit is only one year old, but it’s modeled after the federal government’s pandemic-era program, which was found by the Census Bureau in 2022 to have lifted 2.9 million children nationwide out of poverty. Not only did Krowinski say on Thursday that she was “deeply concerned” about the Senate proposal to nix the tax credit, but the Scott administration rang the alarm last week.
“I think it’s one of the most powerful pieces of policy we’ve passed in Vermont and we’ve passed nationally,” House Ways and Means Committee chair Emilie Kornheiser, D-Brattleboro, told reporters Thursday. “I think it’s one of the best lessons learned from the pandemic that we can carry forward, and other states really followed our lead after we passed this.”
In their own balancing of the budget, though, House members also made a last-minute adjustment to take money from one pot, child care, in order to fill another: housing.
First floated on Wednesday, the deal struck between the House appropriations and human services committees would move $20 million from the budget’s child care appropriation to housing efforts. Proponents say that those $20 million — half allocated to wraparound services and half to buying roughly 250 units of manufactured homes — would help swiftly house Vermonters without stable shelter, as the state’s pandemic-era emergency housing program is set to wind down.
House Human Services Committee chair Theresa Wood, D-Waterbury, acknowledged to reporters Thursday that even with an additional $20 million, there would be Vermonters currently housed in motels who would slip through the cracks.
“I think that it’s important to keep in mind that we will be serving more Vermonters than were served prior to the pandemic,” Wood said. “And we will need to continue to work on this with the people involved and to recognize that all Vermonters deserve a place to lay their head at night.”
House Appropriations Committee chair Diane Lanpher, D-Vergennes, who played a leading role in crafting the budget, told reporters Thursday that the $8.5 billion spending plan is “personal, because … we are also members of our communities that struggle with our constituency. We’re not separate from them. We live in and among them and work with them on this and we see what’s happening in their lives.”
“And in this budget, we actually have addressed those concerns to the best of our ability,” Lanpher continued. “Maybe we’ve not been able to do as therapeutic a dose as we’ve been able to in the past, but we can start here to make that happen for them.”