Personal Update

Legislative Update, March 17, 2026

 Legislative Update

March 17, 2026

Rep. Anne Donahue

I usually write updates to share pressing issues of the day that are seeing legislative action. That’s pretty hard to pinpoint right now. We’ve reached the halfway mark, meaning most House bills must be out of committee and likewise for the Senate, so that there is time for review by the other body.

There were 33 bills reaching the floor on Wednesday, with others in queue until they’ve been reviewed for spending or tax impacts, and the big bills – Appropriations and Education reform – have more time before that “crossover” deadline. That’s a lot to take in and sort out at once.

So, I want to take a bit of time sharing some recent issues I’ve been involved in that I believe are important to our values and process, even if they aren’t headliners. 

Thumbs Up

We passed a bill this week to end the extraordinary expenditures to test and remediate schools for the presence of polychlorinated biphenyls (better known as PCBs), a chemical believed to be sufficiently harmful to health that Burlington High School had to be torn down and replaced a few years back. Schools were mandated to get tested, with both testing and remediation paid for the state.

Since the bill was passed in 2021, tens of millions of dollars have been appropriated. Although only about half our schools have been tested, the cost figure has kept growing. There is no money left in that budget line right now, yet schools are still officially under a 2027 deadline for compliance. The bill this year will cut the program short, if the Senate passes it.

I was prepared to support the bill, figuring that we must have learned that the threat was not as severe as we originally thought. We were first in the nation to set this standard and requirement. It seems we jumped the gun. 

Then I heard the bill’s presenter explain that this had nothing to do with the health standards being in error. It was just that we had run out of money. There wasn’t even testimony taken from the Department of Health in terms of possible impacts.

What?

We need to judge every expenditure on a risk-benefit basis. If it doesn’t cost much and solves a big problem, great. If it doesn’t cost much and solves a small problem, that’s OK. And if it costs a lot and would only solve a small problem, that’s easy, too. We shouldn’t do it. But if it costs a lot but addresses a critical problem, we need to really analyze what we should do about it. 

That was the problem with this bill. This program was started because we believed there was an urgent risk to our schoolkids and staff. Now we think it costs too much? Don’t we have to also re-look at what we think the risk of ending action will be – before ending it? 

I was truly aghast that we would not first get the information we needed to make an informed judgement. 

Among the schools that have tested, some found high levels of PCBs and are receiving the funds needed to do remediation. Now we leave the others to suffer the consequences of not even knowing if their schools are in danger, leaving parents to worry about it. It’s a serious inequity.

It isn’t true that we “don’t have the money.” Money is always about priorities. Maybe the level of risk does not justify the cost of using money that could otherwise go to housing, health care, public safety, or other key public services. But we need to know the facts to make the cost-benefit judgement in the spending of taxpayer dollars.

I debated this on the House floor, but the committee defended its position. So, before the final vote, I offered an amendment to ask the Health Department to report back to us next year on an updated health impact statement and other potential remediation plans. 

My first draft for an amendment was pretty aggressive, and as I talked it through with the committee, we fine-tuned it to focus directly on getting a health update for next January, prior to the 2027 end of the program. Collaboration always works best. It was a good, thoughtful debate and the committee unanimously supported the amendment.

While we were still on the floor, I received an email from the Agency of Natural Resources letting me know that “people in Vermont schools are being exposed to PCBs above levels that exceed Vermont and EPA’s target cancer risk.  This was documented in an article published recently by a professor from the University of Iowa.” 

So, we do have updated information. We need to review it before we drop the ball on students and their teachers.

Thumbs Down

On another bill, I fought unsuccessfully to protect Vermonters from a law that sticks government’s nose into our personal business without any need or public benefit.

The bill seeks to protect consumers and performance or sports venues from ticket scammers, which is a growing online problem that hurts our arts community as well as unaware buyers. The bill bans resales at more than 110% of the original ticket price, which takes the value out of doing fraudulent business. This was a really good bill, and I was happy to see us take action.

There was one glitch. The definition of a “reseller” was anyone who resold a ticket. In other words, if you bought a ticket for yourself and then got sick or couldn’t use it for some other reason, your attempt to resell it would be regulated by the state.

Most people in that position feel lucky if they can resell it at 80% or even 50% of what they paid. But the issue is whether government should be involved in personal transactions such as this. If there was someone really anxious to see a sold-out Norwich hockey game and willing to pay extra, why would we step in and say: “Nope. The seller can only make 110% of the value.” Why is it government’s business?

I proposed an amendment that would exclude from the definition of “reseller” a person who bought a ticket for personal use for a single event. It would keep individual Vermonters out of a state regulation that the bill intended to create for protecting the public from commercial fraud. But it was rejected by the committee that had passed the bill, and that translates into guaranteed rejection on the House floor.

Thumbs Up

Twenty years ago, the norm for our Department of Children and Families when it needed to arrange transportation for a child in its custody was often to contract with local sheriffs’ departments to do the job. The sheriffs’ policy was that since they didn’t have the expertise as to whether the child needed security measures or not, they had to use their standard policy: “you call, we shackle.”

So youngsters being picked up at a group home to be brought to another residence were shackled – meaning handcuffs, legs irons, and belly chains. All of them. Whatever age, whatever status.

I discovered this because in my other job as editor of the state’s mental health newspaper, a father came to me with a picture of his 12-year-old boy, lower lip visibly trembling even in a picture that cut his face off for confidentiality. If he had lowered his wrists, the cuffs would have fallen off. His little body bore the weight of chains.

His dad was distraught that his compliant little boy would be shackled that way to bring him from the hospital in Rutland to the Brattleboro Retreat, even though he was ready and willing to drive him down himself. He dashed to a local pharmacy to buy a throwaway box camera, beat the sheriff to Brattleboro, and snapped the picture.

A picture can speak a thousand words, and when I brought it to the state house along with a bill to ban that process unless there was an actual safety risk for the child or the public, it passed with broad support – including the support of the Agency of Human Service, which was somewhat shocked itself that its prior policy existed. It was a proud moment for me, as a “newbie” legislator.

Today, many fewer children are subjected to that kind of treatment, but data is poor. Last year, my committee asked for an update of the numbers. It took the Department almost a full year to get us the data. It showed that in the past five years there were still 98 child transported in “hard restraints” (cuffs or leg irons, and 44 times, belly chains) and no record as to why. Was it an appropriate safety measure?

At the same time last year, we received testimony about the use of restraint and seclusion in many of the residential programs caring for children under the custody of the state and paid for by the state. The state had some regulations about it, but they are not set in law and the regulations are not applied to out-of-state contractors caring for Vermont kids in the situations where we don’t have the right setting for them in-state. The need for oversight is clearly most important there.

Last week, after I headed up the initiative, our committee passed an update to the law on transporting children so that we have data and documentation of standards being met. It also adds a new law on measures to protect children in residential programs. (All assuming, of course, that it passes the Senate and is signed by the Governor. Bills have long journeys to become law.)

I’ll be reporting it on the House floor, and, all these years later, it feels good to continue progress on this important issue for our children.

***

Please reach out if you have questions about bills or other issues before the legislature. I can be reached at adonahue@leg.state.vt.us and Ken Goslant can be reached at kgoslant@leg.state.vt.us.

March 1, 2026 Legislative Update

 I’ve been fairly quiet thus far this year, because most work has been in committees rather than having bills ready for action on the House floor. That will change in the next few weeks, since we are nearing the deadlines to send bills over to the Senate – and the Senate to us – if they are to move at all this session. The key areas being addressed in my Human Services Committee are a homelessness bill and addressing the treatment of youth in need of intensive residential care. Swirling in the background are the annual state budget and the question of reforms to education funding. So, this is an update on those topics.

Homelessness

Ever since the COVID crisis, when we wanted people to be isolated in hotel rooms rather than in congregate shelters, we have maintained a major backlog of homeless households who have no shelter options at all. Everyone recognizes that using hotels and motels is not the right way to support these folks, even if there was enough money (or enough hotel capacity) to do so.

We have attempted to increase shelter capacity for cold weather months, but that still isn’t enough to have a place out of frigid conditions for all who need it. It also results in the exodus to the streets every spring when the “cold weather exemption” ends. We are trying to develop a bill that has levels of support based on needs, that reduces hotel use, and that builds shelter capacity. The biggest obstacle is that it isn’t possible to move people into stable housing, if no affordable housing exists. That’s what is maintaining the backlog.

We are also focused on staying within the governor’s budget. That includes recognizing that if we increase case management support, we may decrease the number of households that can access help, at least for a transitional time. No choices are easy.

Kids in Care

Ever since the Woodside Rehabilitation Center closed down amid issues of mistreatment, Vermont hasn’t had a locked detention facility for the limited number of adolescents who need that highest level of attention. Planning has been slow, with one significant delay being finding a site where neighborhood opposition doesn’t close the planning down. As an interim measure, a 4-bed program was opened in Middlesex last year after rehabbing the old trailers that were previously a secure mental health residence. A 3-bed “crisis stabilization” program is now about to open in Windham in a rehabbed basement space of the sheriff’s office there.

We have struggled for the past two years to get a picture of the overall costs of the “master plan” that the Agency of Human Services is working on. They say they don’t have estimates for future budget years. Last year, we were disturbed by the cost of the contract that was signed for an out-of-state agency to run the Middlesex program. This year, we were aghast at the contract just signed for Windham County.

Make sure you are sitting down when you read this.

The contract is for $4.3 million per year. That amounts to almost $4,000 per day per bed – billed whether the bed is used or not – for this 3-bed program. (It’s $4.1 million for the four beds in Middlesex, which is slighter lower but the same per-bed price as for inpatient hospitalization for a child at the Retreat, but without any of the services that a psychiatric hospital provides.) The out-of-state provider who just signed the contract had its license suspended in its home state for violations of child protection regulations. It cost somewhere around $2 million to do the rehab work for the three bedrooms and common area.

We are suggesting freezing the budget from use for further development until the administration produces the cost estimates on the full plan that we have been asking for. It is painful to see this kind of expenditure while the same budget from the governor proposes cutting funding for child abuse and neglect prevention and for post-adoption supports due to lack of resources.

In the meantime, we’ve also been concerned for several years about reports of overuse of restraint and seclusion at some of the state’s residential facilities. And there are still instances where youngsters who pose no threat at all are being transported in shackles. So we are working on a bill that would put more teeth into oversight by the state on these practices. (That’s not to say there isn’t a lot of good work happening in these agencies; but even occasional violations can cause serious harm to a child.)

Speaking of Budgets

Inflation and other cost-drivers are making it a tough budget year. The governor’s budget proposal holds to a 3% inflationary increase, and legislature leaders are saying they are committing to keeping the budget in balance without any new taxes. The directions from our Appropriations Committee to policy committees was that we could not recommend restoring a budget item that is targeted for a cut unless we identified a replacement source of funding (a cut somewhere else.)

I’ve heard some committees did not come as close as ours did in abiding by that, which only ends up putting more pressure on the Appropriations Committee to make decisions. We did recommend saving the abuse prevention and post-adoption programs, for example, by cutting a tiny percentage from the juvenile detention program budget.

One big driver of needed budget cuts is the plan to once again transfer tens of millions extra from the general fund into the education fund, so that school budgets voted on by towns don’t crush people with the degree of property tax increases. Every year that happens, the “debt” back to the general fund keeps growing. So that’s a segue into the education funding reform issue…

Education Funding Reform

Last year, Act 73 was a desperate effort to respond to the number of defeated budgets by moving a reform plan forward. Getting enough votes in the legislature to support it was a bit dicey, so it was constructed with multiple “off ramps.” If certain next steps did not occur in sequence, the plan would collapse. And collapse it has, with disputes about just about every aspect stalling the progress. It’s hard as an outsider (and I am an outsider, pinned in my committee room while debates go on in the Education Committee room) to predict where it will end up.

For years, we have allowed the façade of “home rule” to stay in place, allowing towns to vote on their local budgets that get merged into a statewide pool of money and distributed back to towns – but you don’t necessarily get back what you raised in taxes. The distribution system is highly complicated in how it shares the resources, and some schools operate for much lower than the state average, and others, at much higher. If it is a statewide funding system, it needs to be raised the same way for everyone, so that it can be shared equitably. We are mandated by our Supreme Court to have a statewide funding system, but the one we’ve created doesn’t work. To do that requires much larger districts and the kind of funding systems that most states use, called a “foundation formula” that equalizes the playing field for all students. The state legislature then controls that funding, not individual towns.

There is a push this year to give towns a few more years to make their own decisions about how to combine existing districts into larger ones. Only if they can’t, would the state step in. There’s lots to complain about in how it might roll out, but the bottom line is that the longer we wait to act, the worse the situation will get. Waiting a few more years for changes to get underway is not a sustainable plan.

It’s important to remember that it is well established that small schools in upper grades are detrimental to educational opportunities for most kids. Given our current testing scores, the one thing that we can’t do is pretend that, aside from the tax issue, all is well with how we educate our children in Vermont.

Thanks for the honor of representing you. Please be in touch with your questions and concerns. All of my updates can be found at representativeannedonahue.blogspot.com. I can be reached at adonahue@leg.state.vt.us, and Rep. Ken Goslant can be reached at kgoslant@leg.state.vt.us.

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.

December 4, 2025 Legislative Preview

 Legislative Update

Rep. Anne Donahue

December 4, 2025

It’s just about a month away from the start of the 2026 legislative session, and this week we held the “preview meeting” to hear from our consultants about the state’s financial picture. In terms of predictions on the overall economic picture, our state economist said, “We’re tearing our hair out. We’re having to guess at it.” While they’ve always placed caveats on their reports, this is the first time they’ve said anything like that.

In terms of the two specific areas of staggering costs that are looming for Vermonters: it’s the parallel crises in health care and in education costs.

We pay the highest premiums in the country, driven by the highest priced hospital in the country. On average, Vermonters pay 19.6% of their income for health care. The national average is 7.9%. That is staggering. At the same time, quality and access have dropped. There were theories shared by different speakers about why the costs of care are so high, but there is no clear picture of why this is other than that prices at the University of Vermont Medical Center are the biggest factor, and it has a 47% market share.

Slides we were shown included this example: an MRI at UVMMC costs $6,520. At Dartmouth, it costs $4,884. At a sample regional hospital, Northwestern Medical Center in St. Albans, it’s $2,785. Independent facilities charge $1,799. (A standard birth at UVMMC is $17,373, while at Northwestern it’s $5,150.) On the flip side, some of the small hospitals in the state are in financial distress and on the brink of closing.

I know one piece of institutional knowledge, and I shared that. It hasn’t always been this way. Only 25 years ago, Vermont had average costs below the national average. The warning signs were there, because our cost increase trend was above the national average. We were catching up, and soon to exceed, the rest of the country. The entire time I’ve served in the legislature, we’ve been scrambling to try to address this, without success.

The push now is to regionalize high cost, high intensity services and to move more lower-intensity services out of hospitals and into less expensive community settings. Regionalization would help protect access to essential services over the long term, rather than risk losing them altogether. It may mean longer travel in some cases and less local hospital control over types of services, but the current trajectory is unsustainable.

On top of the cost increases that impact everyone, there has been a lot of worry about the pending loss of federal subsidies for those on the insurance exchange, Vermont Health Connect. It’s been on the news a lot, and it is a dramatic loss. But we were urged to make it clear for constituents that subsidies have not been completely lost. People should be applying to find out eligibility. What has been lost is the enhanced COVID subsidies, not the base ones.

***

“Current trajectory unsustainable”

Does that phrase sound familiar? And does the push to create more regional planning and service delivery also sound familiar? With further travel and less local control? It is the identical scenario we have in our education system. The projection of a 12% property tax increase next year just hit the news. That estimate is based upon “if everything stays the same,” meaning, projected school budgets and votes on them, and legislative action.

This came as no surprise. We built it into last year’s budget with a temporary shift of $118 million in one-time (non-recurring) revenue so that last year’s tax increase was minimized. We knew the difference would have to be made up for this year.

Homestead property taxes are only 28% of the overall education fund; non-homestead are another 40%; the rest (32%) are other taxes. Those non-property tax sources will increase by about 2.6% this year, and when school budgets increase higher than that, it further increases the rate of the increase on the property tax portion. We could repeat a shift to add in other general funds like last year, but that assumes those “one-time” revenues are available and it would take back-up money away from urgent needs in the general fund.

It was done last year on the premise that we were planning some major restructuring of the education system and how we pay for it that would impact future growth. That bipartisan bill setting up a plan of action is now facing fierce pushback, and the reforms are in jeopardy.

The assertion is that there is a lack of evidence that it will save money. I said that last year. That’s a given. The major change is to have statewide funding controlled by the state legislature (that’s the reason there’s no certainty of less spending) instead of by each town. The problem with each town voting on a local budget is that it is paid for by a statewide pool of money.

When Northfield tightens its belt, it doesn’t get all of the tax benefit because the rest of the state saves; when Burlington votes for increases it doesn’t fully pay for it, the rest of the state pays. So, for those who worry about loss of local budget control: under the current system, there is only a make-believe type of local control.

The impact is inequitable, and what kids receive from their local schools is inequitable. It also makes the financing unpredictable and much more difficult to control. We’re the only state to do it this way. I very much hope we do not change course away from true reform this year.

***

The Unknown Overall Budget Picture

Will federal policies send us over an economic cliff? Will they cause damage, but survivable damage? Could they help the economy? That was the “we have to guess at it” that our fiscal experts were referencing. The loss or delay of key national financial statistics due to the shutdown means, “we’re flying blind right now.” We may know more by January.

The two cross-currents that were detailed were the existence of “staggering” new investments and equity gains in the build-out of Artificial Intelligence, and the impact of “deglobalization” by the U.S., which, our consultants said, “is unwinding the postwar economic order through punitive U.S. tariffs assessed against friends and foes, and a reversal of immigration flows that have defined and shaped the U.S. for most of its history.”

The full power point of the presentation, with a lot of detailed explanation and graphs, is well worth reading and can be seen at: https://ljfo.vermont.gov/assets/Publications/All-Legislative-Briefing-December-3-2025/December-2025-Legislative-Economic-Review-REV.pdf

Vermont revenues are seeing direct losses from reduced Canadian tourism. Uncertainties for our state budget also include the fact that federal funding directives are arriving without explanations or specific directions, data is missing, and the discretion given to the executive branch has resulted in pauses, cancellations, and reissuance of funds. There are still unknowns about what, if anything, might change based on pending court decisions.

The coming year will remain an unknown until Congress addresses the 2026 budget in January, and the perils to Vermont are significant. In the current year, of our $9.1 billion budget, $3.1 is paid by federal dollars. What happens on the federal level is a very big deal in terms of what we can provide. While the future details are still not well known, the general goals (and impacts we can assume for Vermont) are clear: cut taxes, cut mandatory spending, cut discretionary grants, shrink the federal footprint and expand executive power.

One direct, known change is that Vermont will need to budget a new $8.4 million annually for the administration of the food stamp program. That used to be paid fully by the federal budget; now 50% is being charged to the states. All of our ordinary pressure will also be there: the fact that our increases in revenues are outpaced by inflation and fixed costs. The Transportation Fund already required rescissions this year due to lost revenue (drop in gas usage) and increased road construction costs.

All of the briefings can be seen at: https://ljfo.vermont.gov/publications/legislative-briefing/all-legislative-briefing-december-3-2025

***

 Once we are underway in January, lots of issues beyond the financial ones will be on the table. Please contact me (adonahue@leg.state.vt.us) or Rep. Ken Goslant (kgoslant@leg.state.vt.us) with questions or input. We look forward to serving you in the new year.

August 8, 2025 Special Update on Budget Status

 While our state legislature is out-of-session, the House and Senate Joint Fiscal Committee meets regularly to review the budget status. The Vermont legislature meets from Jan-May and therefore will not be in session again until next January.

There is particular concern this year because of the pending impacts of federal policy and budget changes, given that Vermont relies on federal funds for more than a third of its total annual state budget. Because of the uncertainties, legislators are receiving more detailed updates from our colleagues about the state’s financial status, and I am sharing, here, the summary we received this week. Note that there are many documents referenced, and they are available on the Joint Fiscal Office website if you are interested in a greater level of detail.

 

Update from Emergency Board and Joint Fiscal Committee Meetings from Reps. Robin Scheu (D-House Appropriations Chair) and Jim Harrison (R-House Appropriations Vice-Chair):

E-BOARD

On July 31, the Emergency Board held its semi-annual meeting to hear and accept the Consensus Revenue Forecast. As a reminder, by statute, the Emergency Board (four money chairs and the Governor) meets twice a year, once in July and again in January, to establish the official consensus revenue forecast that the budget is based upon. The forecast is developed by the General Assembly’s Economist in collaboration with the Governor’s Economist.

You can find a copy of our economist’s, Tom Kavet’s, July 2025 Economic Review and Revenue Forecast Update report on the featured publication links at ljfo.vermont.gov/

General Fund (GF) revenues for FY27 (the budget we will be working on next session) are projected to increase by 2.5% or $61.2 million. The good news is that there wasn’t a downgrade in GF, but the bad news is that $61.2 million is not sufficient to cover state employee salary and benefits increases, pension payments, and a myriad of other fixed costs. As a result, we can probably expect some adjustments to programs and services.

Further, policy changes, some of which are contradictory to one another, tariff uncertainly, and significant budget reductions coming out of Washington mean that projections may need to be revisited, possibly before January.

However, it is unlikely that the General Assembly will need to be called back into session before January. Many, but not all, of the programs that are being pared back through the Federal Reconciliation Bill will not take effect prior to January 2026 so the triggers we built into the budget for a special session are unlikely to be hit.

Finally, our economists reminded us that personal income tax is the key driver of our GF revenue. It will be important to pay attention to job growth, the labor market, and inflation as they are indicators of which direction future GF revenue may be headed.

 

JOINT FISCAL COMMITTEE

You can find the July 31 JFC Agenda and all supporting documents at ljfo.vermont.gov/committees-and-studies/joint-fiscal-committee/meetings/2025-07-31

We heard the usual year-end closeout updates, the Medicaid Year-end Report, and a review of the consensus revenue forecast. Some key points:

·       We ended FY25 in solid condition and were able to fully fund all our contingencies in the budget.

·       Our reserves are in very good shape, totaling about $300 million, so we are in a strong position. We continue to have a high credit rating as well.

·       Regardless of the above, Vermont received over $3.1 billion in federal funds so we will not be able to backfill all potential losses of federal funds.

We also spent time hearing about several items related to federal funds changes.

JFO presented an overview of the 2025 Federal Reconciliation Act and how programs such as Medicaid, other health care programs, and SNAP are affected, as well as revenue and tax changes, recissions, and other changes. [This is included in the list of supporting documents on the JFC meeting link, above.]

In addition to some Agency reports, we heard from three senior staff members from our congressional delegation. It will be important to keep in close contact with the delegation so we all understand what is happening both in Vermont and in Washington, DC. Expect more communication with our delegation in our committees next session.

At the end of this nearly 5-hour meeting, we made time for public comment so we could hear from community partners affected by the loss of federal funding. The JFC will be doing something similar at each of our future meetings this year. The impact on many of our constituencies may be significant.

In closing, we offer the following points:

·       We expect the upcoming state budget cycle to present a number of challenges that most of us have not experienced as legislators before, due to uncertainty in the economic forecast and changes in the federal budget.

·       Our goal is to meet necessary changes to our budget in a bipartisan manner.

·       We may need to ask policy committees to review existing programs to see if there are any that can be scaled back or may no longer be the priority they once were.

We are all in this together and are confident we can find a path forward that will minimize harm to Vermonters yet continue investments in our collective priorities.

 

Thank you for the honor of representing you. You can reach me at adonahue@leg.state.vt.gov or Rep. Ken Goslant at kgoslant@leg.state.vt.gov For input or questions; we welcome your contacts.

June 17, 2025 Legislative Update, Ed Fund bill

The Education funding reform bill passed after split votes in both House and Senate on Monday, with lots of angst even among some voting yes. It brought an end to this year’s extended session.

For many years, I’ve believed that “local control” over education funds has been a façade, given the actual funding mechanism. I believe that a state obligation for a crucial statewide system should have funds raised and budgeted at the state level for all students equally, across the state. Setting a path – a work plan -- for that shift is the only thing this bill actually does, and I supported it.

Contrary to discussions or opinions:

1.       It does not save money.

It spends more for transition needs, and could theoretically save money in the future. It could just as theoretically spend more. The difference will be that it will be in the hands of the legislature, accountable to voters, instead of in the hands of individual towns’ votes combining into a statewide fund imposed on all. Statewide fund, thus state budgeted spending… like roads, social services, court systems and the rest.

There are built-in new costs, such as re-starting school construction aid (and assuming the need for new construction for regional needs.) The future cut in property taxes for lower-income homeowners may cost more than the current income sensitivity system. Future consolidation may save some money, but not enough to offset new costs. Increasing class sizes will save some money, but the required increases are minimal. (At least 10 students for first grade; 12 for 2nd-5th; 15 for 6th-8th; 18 for high school.)

2.       It does not close small rural schools.

There are multiple exemptions for size to meet needs; the decision-making process for closure is yet to be defined. I think upper grades need and benefit from larger regional schools, but not elementary schools.

3.       It does not mean teachers will be laid off.

Again, class minimums requirements remain low; at most, there could be reductions achieved through attrition. There is a timeline for any changes, and a soft-touch consequence for not meeting them.   

4.       It is not happening too fast for good decisions.

Almost every aspect is yet to be determined over the next several years after more work by sub-groups that include professionals. If those steps aren’t achieved (after being fought over in future legislative sessions), the process ends. A map for proposed larger districts next year will be the first test for whether consensus will be possible for moving forward.

Note that even pieces that are “established” in this year’s bill don’t take place immediately, which means they can be changed if new information demonstrates the direction should change.

5.       It does not “privatize” education and place the public system at risk.

It actually cuts back on some access to independent schools. Yes, in theory it could make it easier in the future to expand a private school voucher system, but that would require a whole, new, controversial change in law.

6.       It does not impose big tax increases on thrifty towns, or force cuts.

Sorting out the issue of addressing changes from up or down from current local tax rates or budgets is one of the many work areas yet to be resolved. If it does have unfair results, the opportunity will be there to say, stop; this doesn’t work.

7.       It does not ignore the major cost drivers in school budgets.

Some of those drivers, such as special education, are elements that are part of the further work outline in the bill. Others are not addressed because they are not direct education system issues. Health care’s staggering cost increases are a separate problem for all of our budgets. Yes, it helps drive school budgets in a big way, but that is a component that will now be a shared problem for the state to address in funding, rather than for each town to react to by rejecting a local budget that has soared upwards because of health care costs.

 

What was I happy to see in the final version of the bill that came forward?

Two things:

First, an intent to try for a faster timeline: three years instead of four to start actual changes. It is unlikely to meet the timelines because there is so much work and so many decisions yet to be made. We will likely be voting regularly on time extensions, something we do often. But dragging out change can be a detriment; I think a goal to move decisions forward as soon as reasonably possible is good.

Secondly, it was the first time a transparent statement was made in the bill that clarifies that there is not necessarily an intent to reduce the taxes needed to support our schools. The intent is to reduce the increases in the property tax, which is being perceived as the main thing taxpayers are upset about: increased property taxes, not taxes overall.

The bill now states that within the intent to prevent property tax increases, if need be, we will transfer current spending into other budgets that have other revenue sources (income tax, sales tax… anything other than property tax.) Some of these could be very appropriate. Are school lunches or mental health supports a part of education, or are they social services that should be in our social services budget? But the outcome will be more pressure and increases to those other budgets. It shifts funding to increase other tax categories.

Speaking of mental health support – which a majority believe are a critical need in our schools – that is one of the clear examples of how inequitable the current system. Schools must pay the matching funds for the federal Medicaid support for having mental health clinicians. Many of our schools, in communities that don’t believe it’s affordable for their town, don’t have those services. These supports should not be dependent upon where you live.

If one wants to consider whether our current convoluted system of education spending represents local control while also creating equal tax burdens for equal education support across the state, one need only consider the Northfield budget over the past two years.

In 2024, Northfield tightened its belt compared to many other districts in the state. Northfield spends less than the statewide average per pupil. Yet in the final outcome, the average property tax rate increase across the state was 14%. In Northfield, it was 18%. This year, Northfield (or, the full district) tried to catch up on some pressing needs. The budget increase was 14%. Yet the tax rate will only increase by 2% to meet that increase.

This is why I term “local control” a façade under the current funding structure

While many folks are scared about potential implications, the bottom line is that this bill, this year, only begins a process for a statewide system of equal taxing for equal resources for the opportunities for each student. And it uses the same system that the majority of states use for education funding. This bill is about doing the necessary groundwork to address the many complex issues that will determine how, and even whether, it is able to move forward. It sets out intent, but no final decisions.

Most of the big decisions are still ahead of us and will present major challenges to resolve.

***

This year’s session is over, but I’m still available if you want to discuss legislation or other state issues. Stay in touch at adonahue@leg.state.vt.us (and with Rep. Ken Goslant at kgoslant@leg.state.vt.us.) We appreciate being able to serve you.