Lawmakers, advocates and the state Department for Children and Families are engaged in a verbal tug-of-war over $19 million in child care funds.
The situation is a convoluted one. In 2023, Vermont passed a landmark law that directed millions in expanded subsidies to families paying for child care. Those subsidies are funded through a special fund, filled by money from a payroll tax enacted July 2024, as well as an appropriation of general fund money.
Last year, however, state economists projected that, for the 2026 fiscal year, the new payroll tax would bring in $19 million more in special fund dollars than the total amount previously appropriated for the child care expansion. Those special fund dollars can only be used for the child care financial assistance program and related programs.
So the Scott administration proposed reducing the general fund appropriation for the subsidies by $19 million and letting special fund dollars make up the difference — thus freeing up the general fund money for other purposes.
But child care advocates characterized that proposal as a plan to “raid the child care fund to pay for General Fund spending.” In an op-ed published by advocacy group Let’s Grow Kids and Vermont media outlets, over 50 business leaders argued that all state funding put toward child care — even if more than planned — is a necessary one.
“We urge our state lawmakers and the Governor to do the right thing: use every dollar from Act 76 for its intended purpose – solving Vermont’s child care crisis,” the op-ed reads.
On Tuesday, some lawmakers in the House Human Services Committee appeared to agree.
“It seems like a weird time to take general fund base out of a program that is still in the process of building its eventual path,” committee chair Rep. Theresa Wood, D-Waterbury, told officials from the Department for Children and Families.
— Peter D’Auria
In the know
On the Senate floor Tuesday, Republicans sought to relieve the Natural Resources Committee of S.68, a bill repealing the Affordable Heat Act. The move would’ve soon brought the bill to the floor for a Senate-wide vote.
Sen. Scott Beck, R-Caledonia, the Senate’s minority leader, argued voters had called for immediate action on repealing the Affordable Heat Act and its associated clean heat standard — a policy that looks likely to die.
But Sen. Anne Watson, D-Washington, who chairs natural resources, said her committee would discuss the bill later in the week. To take the legislation out of the committee’s jurisdiction would result in “short circuiting the democratic process.”
The motion failed along party lines, with all 17 Democrats and a Progressive opposing.
— Ethan Weinstein
On the move
The Senate granted preliminary approval Tuesday to annual legislation that trues-up state spending midway through the fiscal year — including a contentious provision, first added to the bill in the House, that would let more people keep using the state’s voucher program for emergency housing into warmer months.
Like in the House earlier this month, that measure and its $1.8 million price tag was the major source of debate over the “budget adjustment” bill, H.141, on the Senate floor.
Gov. Phil Scott didn’t include the measure in his proposed spending adjustment to legislators in January, and Scott has said he’s against the idea. But broadly speaking, the bill now approved in both chambers mirrors Scott’s mid-year proposal overall.
In H.141, the House made tweaks to the governor’s proposal to increase 2025 spending by about $161 million — some $15 million more than the governor’s proposal called for. The Senate’s version would increase spending by about $17 million more than Scott’s.
Read more about the Senate’s version of the bill here.
— Shaun Robinson
Visit our 2025 bill tracker for the latest updates on major legislation we are following.
At bat
Visitors to the statehouse cafeteria Tuesday afternoon were surprised by an unexpected arrival: a small brown bat.
The bat drew some attention from lawmakers, lobbyists and eventually the capitol police, who evicted it with the help of a towel. It’s unclear whether it managed to testify in any committees before departing.
— Peter D’Auria
Read the story on VTDigger here: Final Reading: Child care funding shuffle draws scrutiny.