Jan 26, 2026 Update

 

As we enter the second half of the 2025-26 biennium, the shadow of federal action is mingling with Vermont’s own economic crisis over its budget shortfall and the ongoing growth of school budgets and the cost of healthcare.

The strong Governor’s statement this week about ICE actions in Minnesota contrasted with his earlier focus exclusively on the budget and education funding reform. The legislature, however, has already been grappling with some of the specific impacts of federal actions. The budget crisis has significant drivers from federal cuts (a third of our 9.4 billion budget is federally funded.)

That budget is presenting newer legislators with a first-ever reality: cuts to existing programs may be necessary to a balanced budget, and the governor has proposed many in his budget. Our state revenue forecast is slightly down, yet $139 million is needed just to maintain current operations. The stress of this session has barely begun. Capturing all the moving parts in one update will be difficult – feel free to ask for details on topics that are not discussed here or summarized too briefly.

 

Human Services Committee

In my Human Services Committee, we started paring back the onion on the budget. In the Health Department, the proposal is to eliminate forgivable loans that enable students to pursue degrees critical to the healthcare workforce. We have had huge cost pressures for years by having to use “travelers” to fill essential jobs. Another nursing home announced closure last week from this pressure. It drives some of our highest-in-the-nation healthcare insurance costs.

Though some have been in place longer, many of these programs were funded through the infusion of the COVID federal dollars. As I warned at the time: it is easier to not start a program than to cut it. We started a lot of initiatives – good ones – with all that money, but now it’s gone. Across every department, the legislature will have to support the administration’s cuts, find other equally unpopular others, or raise taxes; raising taxes has not been part of the discussions, especially given the overall affordability crisis.

There is a perception that Vermont nears the top among states in spending on social services, yet we still have huge gaps. Our entire child welfare system relies on a 48-year-old computer system, the oldest in the country. As my committee heard last week, it has failed for several days at a time, putting kids who are in our care at risk. Yet we keep deferring the multi-million investments for upgrades.

A part of my committee’s work that has significant budget implications is a new bill to reshape how we address homelessness. The governor vetoed last year’s bill. We are trying to achieve compromise moving forward. The area of common agreement: the hotel/motel program is both unsustainable and a bad program. I firmly believe in our communal responsibility to offer a “roof over the head” of anyone who is without any shelter, and not to limit help to a subclass of “more vulnerable” people nor to have more expansive services as a first priority. Current rules only create access to all for shelter when the temperature reaches minus-ten degrees. Addressing that should come first, no matter what.

 

Policy Pushback

Not everything is about money. The House passed my committee’s bill last week to substitute our state Health Commissioner for federal guidance on identifying recommended immunizations. There were only nine dissenting votes.

The Centers for Disease Control has dropped five recommendations from its list of 17, based on comparing other countries. Any vaccine that was not included by 20 of 20 other nations was removed, without regard to the reasons or medical basis. In a particularly blatant example of wordplay when adding up the number of vaccines to compare what American children receive, the federal report stated that our youth get 18 COVID shots. “Get” is used as current tense, but the 18 is based upon one per year through age 18. No child has yet received anything close to that… the vaccine has only been around for youngest ages since 2022.

Is shifting to state expertise the best policy move? I’d say, probably not, if it were not for the current political status of a crucial healthcare issue. That’s why we placed a sunset on the change, which forces a new review. In six years, it will have to be affirmatively re-enacted, or it will self-repeal.

Important note: this bill is about the recommendations for access for those who want them. It is completely unrelated to the more controversial issue of mandates for school attendance.

 

Speaking Out

For much of current federal action, there is little more we can do than speak out. However, two important bills are moving related to ICE enforcement in Vermont, and I support both of them.

The first would ban any law enforcement (no discrimination) from wearing masks in performing duties, except in limited, necessary situations. To me, the first and continuing deep gut-punch has been the “secret police” nature of masked ICE agents, something the governor first spoke out against last year.

The second would expand our existing prohibition against civil arrests (versus criminal ones) in “sensitive areas.” The law currently protects courthouses; the Senate bill would add state, county, or municipal building; schools; shelters or emergency housing; and health care facilities. The House variant would block access to federal immigration authorities in nonpublic areas of schools, health care facilities, polling places, public libraries, or childcare facilities.

There are also two resolutions underway that I have co-sponsored: one protesting illegal actions regarding Venezuela and the other addressing Greenland. I have never much believed in the symbolic act of a resolution telling the federal government what it should be doing, but these are different times.

I think it is worth reprinting the governor’s statement from this past Sunday, where he has moved from a position of low-key opposition (avoidance of angering the President appears to be central to protecting one’s citizens, these days) to vocal anger after the killing of Alex Pretti. For those who have not read it in its entirety, I suggest doing so:

“Enough…it’s not acceptable for American citizens to be killed by federal agents for exercising their God-given and constitutional rights to protest their government. 

“At best, these federal immigration operations are a complete failure of coordination of acceptable public safety and law enforcement practices, training, and leadership. At worst, it's a deliberate federal intimidation and incitement of American citizens that’s resulting in the murder of Americans.  Again, enough is enough.

“The President should pause these operations, de-escalate the situation, and reset the federal government's focus on truly criminal illegal immigrants.  In the absence of Presidential action, Congress and the Courts must step up to restore constitutionality."

 

Education Fund

Education reform efforts underway last year have become mired down in internal dissent, while a possible average increase of 14% in property taxes looms. I continue to believe that some of the major components of last year’s reform bill are critical if we want to change our trajectory to make statewide funding more equitable and less subject to individual community tax choices that then impact other towns.

It also seemed fairly clear last year, given very mixed support and all of the “off ramp” opportunities, that Act 73 would not survive more than a year. The governor has now said he won’t sign a budget if Act 73 does not move forward and wants to shift $105 million from the general fund into the education fund as a continuing stop-gap against larger property tax increases. That shift would put even more pressure – ergo force more cuts – of other essential services. What I fear even more is that it would contradict movement towards reform, because it would immunize voters from facing another tax increase and thus reduce the urgency towards reform and the very hard choices that reform creates.

There is a long way to go to see where this debate ends up this year. In the interim, school budget votes will be taking place, and could forecast what pressures the legislature will face.

 

Your questions and input matter. Reach out to me (adonahue@leg.state.vt.us) or Ken Goslant (kgoslant@leg.state.vt.us) at any time.