Vermont Business Magazine Following negotiations between the Legislature and Scott Administration, Secretary of Administration Sarah Clark today issued the below letter to level-set the conversation as it relates to the Budget Adjustment Act:
March 19, 2025
Representative Robin Scheu, Chair
House Appropriations Committee
Vermont State House
115 State Street
Montpelier, VT 05633
Dear Chair Scheu and Members of the House Committee on Appropriations:
While we have appreciated the face-to-face negotiations over the last several days, it appears you prefer to start putting these negotiations in writing, and making them public, so we will follow suit. It is unfortunate that I was uninvited to testify in your Committee this morning to present our feedback on the budget adjustment and provide clarity on our compromise proposals.
Given some of the misinformation we have seen in the last 24 hours, I think it’s important to level-set where this discussion stands, from the Administration’s perspective.
First, we have been consistent and clear in our preference that this year’s Budget Adjustment Act returns to its long-standing role as a technical mid-year adjustment to last year’s budget. Historically, it has not been a place for new initiatives, undebated policy changes, or spending that can wait for the “big bill.” The Governor communicated this in his Budget Address on January 28. I communicated this to the Senate Appropriations Committee on February 11. I communicated this again to the Committee of Conference on February 27 and via testimony to the Conference Committee on February 28. The Governor communicated this in his veto message on March 14.
Our request has simply been to have new spending and policy decisions debated and considered in the normal legislative process rather than the BAA. This is not a request that should need to be bargained, but as a measure of good faith, the Governor offered three different compromises to address your desire to divert more funding to a free hotel program that already absorbs $45 million a year and that we know – and have previously agreed – is failing the people in it, our communities and our taxpayers.
Therefore, we were surprised to see you feel that moving the debate over the $14 million in additional spending in the BAA to the FY26 budget was a major concession and giving the Governor “99% of what he wants.” Again, historically, those conversations have always taken place in the big bill. There were not major “wants” in the Governor’s recommended BAA, rather technical corrections and standard accounting.
It is unfortunate that so much focus has had to be put on what should be an accounting bill. But, the Governor would still like to find a path forward, so that we can refocus our energy on the priorities Vermonters set in November: permanent and affordable housing across the spectrum, public safety and affordability, especially in our education system.
As we shared before you took this debate to the public, we continue to be at the table with a proposal with the following elements:
- Shift non-time sensitive spending from FY25 to FY26. Again, this has historically been how we handled BAA, and is more important than ever given the federal uncertainty and the Vermont voters’ demand that we do more to prioritize their limited tax capacity.
- Prioritize limited taxpayer dollars on a safety net for those who are most vulnerable. Our proposal offered to keep the most vulnerable Vermonters in the “hotel/motel program” for April, May and June. This compromise included allowing households with children and the most medically vulnerable to stay in the program, outside of the program parameters, until June 30. Again, this represents a compromise as our experience and spending clearly demonstrate the “hotel/motel program” is a failed program that is not evidenced based, does not protect the most vulnerable and diverts significant resources away from initiatives that would better support these Vermonters and actually solve homelessness. We need to focus future conversations on ways to narrow the eligibility to the program and the development of better transitional and permanent housing solutions.
- Keep the Governor’s original proposal to protect surplus funds to provide property tax relief, housing and other critical needs. Vermonters could not have been clearer that this is their top priority. I will also note the Speaker and Pro Tem. have repeatedly and publicly expressed their shared support for holding down property tax rates this year.
Vermonters were very clear in their support of the Governor’s approach to fixing, not only funding, major issues. His approach to housing and homelessness, and his BAA and FY26 investments take Vermonter’s perspective into account.
We are ready to continue our negotiations.
Sincerely,
Sarah Clark
Secretary of Administration
Attached: Addendum 1
Addendum 1
Below, I am providing written testimony of the Administration’s Budget Adjustment Act proposals, given we were not consulted on, or given the opportunity to testify on the new bill.
The record should reflect:
- The Administration put forward a budget adjustment proposal in January, and clearly articulated the need to narrowly focus the BAA and defer major spending decisions to the FY 26 budget.
- The administration clearly and transparently communicated our concerns with the Legislature’s changes to the BAA every step of the way through the legislative process.
- The Administration offered a compromise proposal to the Conference Committee on February 28. Details of this proposal were captured in testimony linked below.
- Testimony to Conference Committee on February 28.
- The proposal included:
i. Shifting non-time sensitive spending decisions to FY26 budget deliberations.
ii. Utilize the year-end construct put forth by the Governor and the House to protect surpluses for Vermonters’ priorities.
iii. Instead of extending the hotel/motel program cold weather exemption to June 30, provide $2.1M in grants designed for maximum flexibility to municipalities to be used for community supports.
- The proposal was not accepted. No legislative alternative was offered.
- On the morning of 3/18, the Administration presented a second compromise proposal that reflected items #2bi and #2bii above, and a significant compromise proposal to allow the most vulnerable Vermonters to stay in the hotel/motel program for April, May and June. This would have included children with families and medically vulnerable individuals, extending this benefit for 429 households.
- Legislative leadership responded on the afternoon 3/18, accepting #2bi and #2bii above. Item #2bi is really an agreement to shift debate to the FY26 budget. It is not a “give” to the Governor. Legislative leadership requested to maintain the hotel/motel program until June 30 for all current residents regardless of eligibility status.
- Later in the afternoon of 3/18, the Governor’s team presented a subsequent proposal which added funding to VHCB for $2.8M for housing for disabled individuals and to allow hotel/motel housing only for the most vulnerable (households with children and medically vulnerable) per Governor proposal detailed in #4 above.
- The Legislature declined this proposal and instead of continuing good faith negotiations, issued their memo in response to the Administration to the press, followed by a social media campaign.
- Without sharing the new BAA with the Administration, House Appropriations invited Secretary Clark to testify, then disinvited her, and voted out the new version without any input on the record from the Administration.
We remain willing to negotiate a path forward and work with any legislator who is committed to listening to Vermonters and doing what is best for the entire state.
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