Vermont holds $73M reserve

Vermont House budget writers left $73 million unspent in reserve as they built the state’s fiscal year 2027 budget, betting that cash on hand will matter more than new line items if Washington cuts aid. (benningtonbanner.com) The House Appropriations Committee advanced its budget on March 24, 2026, and the full House passed its draft at the end of March, according to VTDigger and the Bennington Banner commentary written by Rep. Kitty Toll, the committee chair. (vtdigger.org) (benningtonbanner.com) That reserve decision came after lawmakers heard requests for more spending from advocates and agencies, but House leaders said they wanted flexibility if federal money drops later in 2026. VTDigger reported the same approach in last year’s budget debate, when House leaders said they wanted to leave themselves room for possible federal cuts. (benningtonbanner.com) (vtdigger.org) Vermont’s budgets depend heavily on federal money. In the House’s fiscal year 2026 budget documents, federal funds accounted for about $3.15 billion of a $9.06 billion total, compared with about $2.44 billion from the General Fund. (legislature.vermont.gov) Lawmakers also entered this budget cycle with unusually large cushions already on the books. Joint Fiscal Office documents for fiscal year 2026 showed projected year-end General Fund reserves of about $328.6 million after the final budget agreement in May 2025. (ljfo.vermont.gov) Those reserve balances included roughly $118.4 million in the stabilization reserve, $98.1 million in the rainy day fund, $91.8 million in the human services caseload reserve, and $20.3 million in the so-called 27/53 reserve. (ljfo.vermont.gov) The caution reflects a pattern in Montpelier, not a one-off vote. Vermont Public reported in May 2025 that lawmakers were already holding back more than $100 million in anticipated surpluses because Congress was considering cuts that could hit Medicaid, food aid, and other programs. (vermontpublic.org) The state’s fiscal year 2026 budget, H.493, was enacted on May 21, 2025, after clearing the House, Senate, and conference committee. That timeline matters because the current fiscal year’s reserve structure is the baseline lawmakers are now using as they write the next budget. (legislature.vermont.gov) (ljfo.vermont.gov) So the $73 million was not a bookkeeping error or money that vanished. It was a choice to keep spending power in reserve until Vermont knows how much help, or how little, will come from Washington. (benningtonbanner.com)