MONTPELIER — Vermont’s House Appropriations Committee voted out a state budget proposal on Monday for the upcoming fiscal year. Its $9.3 billion bill, which directs spending from July 2026 to June 2027, cleared the committee on a unanimous vote.
The full House will consider the proposal Thursday, with a final vote expected Friday.
Each year, House Appropriations is the first committee to take a stab at drafting a state budget. It bases its bill on recommendations from Gov. Phil Scott’s administration, as well as requests from other legislators, lobbyists and the public.
If it clears the House, the budget bill, H.951, will head to the Senate for further consideration, after which it would need Scott’s final sign-off.
Overall, the bill proposes very slightly less spending, by about $1 million, than what Scott proposed at the start of the legislative session in January. The House’s proposal totals $9.334 billion, while the governor’s spending plan totals $9.335 billion.
The budget bill includes a major proposal Scott made earlier this year: to use about $105 million to “buy down” the average property tax increase projected across the state in the upcoming school budget cycle. It would take $30 million legislators previously set aside — and which could, alternatively, be used to respond to federal cuts — and add that to $75 million in past revenue the state brought in above what its economists projected.
At the same time, the House bill calls for tapping the state’s main operating fund, the General Fund, for about $17.5 million above what Scott proposed.
What’s in the budget
H.951 proposes creating six new state government positions, and using a number of other existing but vacant state jobs for new functions. Scott did not propose creating any new state jobs, instead only recommending legislators draw on that pool of vacancies.
Among those new jobs would be a mediator position at the Vermont Labor Relations Board, who would provide free services when unions and their employers reach an impasse during contract negotiations. The position is important, said Rep. Robin Scheu, D-Middlebury, who chairs the appropriations panel, because the Trump administration has slashed similar staff who work for the National Labor Relations Board and who, in the past, have been called in to resolve disputes free of charge in Vermont.
The bill would also hire an attorney for the Vermont State Ethics Commission focused on advising municipalities on alleged ethical violations at the local level — something the commission has said it’s been unable to do. Meanwhile, the legislation would pull from the pool of state vacancies for a new job at the Vermont Human Rights Commission, which has said it needs an attorney to help investigate alleged discrimination cases.
Outside of state government, the budget also includes funding for a Vermont Legal Aid attorney focused on immigration case assistance.
H.951 also includes funding for a number of policy changes that weren’t part of the governor’s spending plan.
Among them is a $2.7 million increase in rates that the state pays groups that provide mental health care and other human services, including those that people receive in their homes. That money comes with a further $3.7 million federal match.
The budget bill also calls for $2.3 million to expand access to college tuition grants for low-income students administered by the Vermont Student Assistance Corp.
The additional $17.5 million in General Fund spending in the House proposal pales in comparison to the roughly $250 million in requests for support the committee was pitched in recent weeks.
Scheu said the asks her committee decided to fund were those it thought would mitigate the most harm.
“I think we want to take care of Vermonters and minimize harm to Vermonters as much as we can — within a limited budget, that is,” she said Tuesday. “Compared to all of the need for human services,” she added, the state is “still under-resourced.”
To fund many of its proposals, the House committee proposed drawing on two revenue sources that the governor did not.
One is about $9.5 million of interest the state has accrued in recent years on a fund set up to pay for upgrades to its information technology infrastructure. The other is about $9.4 million in revenue the state expects to bring in after changing its tax code in response to new federal tax provisions in President Donald Trump’s One Big, Beautiful Bill Act.
Those tax changes are laid out in H.933, which also makes a host of other changes to state tax policy. That bill is slated to be considered on the House floor this week.
Between the tax bill and the budget, House lawmakers also want to modify another Scott plan to wean the state’s Education Fund entirely off revenue from a state tax on motor vehicle purchases. The governor proposed eventually directing all of that revenue to the Transportation Fund in an effort to reduce a projected funding shortfall for roads, bridges and other projects.
Lawmakers would still direct more of the “purchase and use” tax revenue to the Transportation Fund than is sent now, but it would not entirely eliminate the use of those dollars for education. Some legislators have pushed back on the idea of cutting the Education Fund off from a revenue source at a time when lawmakers are weighing serious changes to how the state funds and governs its public schools.
At the same time, the outcome of legislators’ work on education policy could impact the fate of the spending bill.
In January, Scott used his State of the State address to threaten lawmakers to advance the provisions of Act 73, the sweeping education law they passed last year at his administration’s urging — or he might veto the budget, he said.
