Vermont Legislature SmartTranscripts:

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Morning. This is the House Appropriations Committee. It is Friday, 01/23/2026. It's just after 09:00, and we are continuing our work on the Budget Adjustment Act, and we have the Commissioner of Finance and Management in because after we heard the consensus revenue forecast last week, there was a downgrade and the administration needed to make some adjustments and do some changes. And so he is here to talk to president. Welcome, Adam.

[Adam Greshin, Commissioner of Finance and Management]: Welcome. Adam Gresham, commissioner of finance and management. I see you have your purple cheat sheet there. I'm gonna make this simple. This is all in white black and white. No purple. Thank you, madam chair. And as you mentioned in your introduction, there there was a $8,100,000 downgrade in fiscal twenty six, and that was one of two financial changes, actually. The second change, in addition to the 8,100,000.0 downgrade, was there was a reduction in the need in the Brattleboro retreat reconciliation. So that was $2,600,000 lower than we had originally put. You'll remember state funding, we put 7,900,000.0 and change that also there was a $160,000 federal component to that, but the general fund component is 7,900,000.0. Turns out when they sharpen their pencils and they get got a final number, it was $2,600,000 lower than that. So on one hand, we had to find 8,100,000.0 due to the recession reduction, forecast reduction. On the other hand, we had an offsetting reduction in a need, an appropriation need. So the net was we were 5 and a half million dollars in the red out of balance in the original from the original budget adjustment that we submitted, which necessitated a correction. So the net of these two offsetting changes is 5 and a half million dollars to adjust for that deficit. We made two changes to the budget adjustment. The first is we boosted the fiscal year twenty six reversions by almost 4,700,000.0, little under $4,700,000. And you see those additions in the revised carry forward and reversion sheet that I submitted to you. Actually, it was my the last thing I did before the three day event last week, so it's about a week ago today. I submitted to you a revised carry forward reversion sheet that had another 4,700,000.0, dollars of versions.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: So will we I guess, I think JFO can show us the details, but I there's a lot of stuff from here that's in red or it's hard it's hard to tell from the update which ones do see?

[Adam Greshin, Commissioner of Finance and Management]: And the ones in red, if you read the verbiage, the first the memo part of it, those reversions were actually session law reversed, most of them. Okay. So those were already those were required by session law and reappropriated already.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Okay. So we don't wanna look at that

[Adam Greshin, Commissioner of Finance and Management]: So those were part of the f y twenty six big bill that you folks gave to the governor. He signed. The balance of the reversions prior to the this, resubmission of the BAA was 21,100,000.0. That went up to 25,800,000.0. So there's $25,800,000 in the revised budget adjustment for reappropriation. That was really the first change. We increased, just under 4,700,000.0, the reversions that were available for reappropriation. The second change really was fortuitous, and that was that we I mean, this is the kind of call that you wanna get. Oftentimes, when you're about to submit a budget, you get calls you don't wanna get. This one was a good one. So the folks, Dave Cameron at DFR called and said, you know, they make estimates, and they are estimates, of what they will be able to sweep it to the general fund at the end of the year in their direct application. And it turns out that the recent insurance renewals, the revenue from that, you know, you you pay a fee for that CFR, the revenue from that is higher than they'd originally anticipated. $2,000,000. So That's So he said we have another $2,000,000 that we didn't anticipate in f one twenty six. So I thought, well, that's a good thing. So that's the second change. We increased the direct app from DFR another $2,000,000. So if you're doing the math in your head when you have another 4,700,000.0 of reversions and 2,000,000 of direct apps, that actually comes out to be 6,700,000.0. We only needed 5 and a half million. And so that allowed two, smaller appropriations that you would have seen probably in the big bill that we moved forward to the budget adjustment because in the perfect world, we would have put them in the BAA. One was the community accountability court. You folks may be aware of what's going on in Burlington, and the the governor and the mayor of Burlington and other partners are working together. The governor would like to move this out statewide to willing, and I emphasize willing, counties that would wanna work with us.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: So if there's not a specific identified county at this

[Adam Greshin, Commissioner of Finance and Management]: point? Not. I might add too that the financial impact of that has been relatively light, actually. It the largest component by far has been the additional overtime we paid for state petrie state police patrols in Burlington. There was a you'll notice in the BAA, there's a small appropriation to the state's attorneys. There was a small appropriation to judiciary, both of them together. I think that they get it up to, I'm gonna say, $60,000, something like that. Mean, it was it was not a lot of money. But we our thought is that to the extent that other, areas in the state are willing, you would like to roll this out. So and we wanted to we didn't wanna wait till end May or whenever the budget passes, so we put that in the BAA. In addition, the secretary of education, Zoe Saunders, had come to us several weeks ago saying, you know, they they have a program called Read for Bond, which is part of their literacy training. It's really focused at teaching literacy instructors, teaching teachers. And they're running a bit shy on funds. This is a program she's really behold to. I think, you know, I would encourage you to speak to her about it. I'm really not the the greatest source on what it does, but they were looking for additional funding to actually carry them through the end of the year and into next year. So that too, you'll see the adjustment of second deduction on the association to read one. All of these, the accountability court and pardon me, read Vermont are one time.

[Rep. Wayne Laroche, Member]: So this is training for the teachers? That's correct.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah. And

[Adam Greshin, Commissioner of Finance and Management]: I mean, I think it's

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Why didn't this make it into budget adjustment under the normal cycle?

[Adam Greshin, Commissioner of Finance and Management]: These were, you know, late breaking requests. You know, keep in mind budget adjustment was I mean, it seems like ancient history, but it was December 15, six weeks ago. And, you know, that's one of the challenges of submitting an earlier budget adjustment. We generally know what our Mhmm. Balance is, but from time to time, things come up. It's no it's not no sub diffused here really. It is kinda late breaking. I would say also that the additional revenue from DFR, you know, at that point early in budget, we we just didn't know what kind of revenue we had and some you know, again, these would have appeared in the big bill. We just these in particular, we wanted to, you know, get out there, and we had an opportunity through DFR, greater direct app. So there you have it. No one other than that, no mystery. So really, a nutshell, we had to raise net 5 and a half million dollars. We took greater versions. We took a $2,000,000 gift from DFR. We met the gap created by the revenue downgrade, and we also enabled two appropriations for your consideration. I hope I lined up with a purple sheet.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Pretty much. Yeah, it was the $8,100,000 and then the offsets were the reduced Brattleboro Retreat payments. So that brought $2,600,000 back, 4,700,000.0 in reversions, and then the GFR, which gets you to 9.3, which gives you 1.2 left, and you found a

[Adam Greshin, Commissioner of Finance and Management]: way to spend it. Magically. Yeah, and I

[Rep. Robin Scheu, Chair, House Appropriations Committee]: think we will at some point, I think I heard from JFO about the specifics what the 4.7 in reversions were. Were there a couple of big ones? Was the Vermont housing finding? Is that one of

[Adam Greshin, Commissioner of Finance and Management]: them? That. It was, well, the largest was a little under 2,000,000 from, Vidal.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Oh, okay. That's right. Department of

[Adam Greshin, Commissioner of Finance and Management]: And then, actually, there were a number of VDAL appropriations. The the the main feature of those VDAL appropriations, you can see if you look at the the what we call the DEBT ID, department ID, that has, among other things, when it was appropriated. Three of them beat all appropriations were from 2018. Two from were from 2019. They were just old. Not that they weren't, used, but there was some leftover that he decided to bring back into the general fund. So those were the probably the largest. There was also a a half $1,000,000 from the, Department of Environmental Conservation

[Rep. Robin Scheu, Chair, House Appropriations Committee]: That's the Brownfield remediation.

[Adam Greshin, Commissioner of Finance and Management]: '21, the Brownfield remediation. That still is outstanding. You know, there's about 4 and a half million dollars left in that appropriation. And then the AOE license data management, not coincidentally, that is for $700,000, which is going back out the door in the read Vermont literacy program. So those were the additional versions.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Okay. So, yeah, so when I'm looking at the Department of Labor, there was the 1.9, and then there was the returnship program? That's correct. And then what is the post secondary new Americans? You reverted that too?

[Adam Greshin, Commissioner of Finance and Management]: Yes. That I mean, again, that was six years old. Okay. Our thought was that whether or not it had uses at the time, this point has better uses just moving back to the general fund and being reappropriated for other priorities.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: And the workforce development was also part of that?

[Adam Greshin, Commissioner of Finance and Management]: That was from 2019.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Okay. And then the new American labor force for January, is that part of it too? That was. Yes. What's happened with that one?

[Adam Greshin, Commissioner of Finance and Management]: That was for 2024, two years ago, and, you know, I think they they got out let's put it this way. They got out of it what they needed. That was, I think, for a training program for new so called new Americans Uh-huh. That are here that I believe they are handling through another other appropriations. Okay. And, again, they these guys would be the people that have them in.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Is that the spreadsheet? I'm looking at well that is one I think that we got but I'm looking at the one that Adam sent us the revised the reversions but yes that may be from the balance sheet as well I'm just looking at this and then the last one and then I'll go to the 997 for the workforce work base. Is that the other?

[Adam Greshin, Commissioner of Finance and Management]: The workforce development work base. Yes. Where was that from? That was from a 2024 appropriation that I again, I believe is now being handled otherwise. And I think, you know, Vidal had contacted us and said, you know, we're doing this at this very you know, we can speak to that if asked.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Okay. Yeah. I'm I'm sorry I was getting lost in my sheet, just go up a couple lines to the Work Based Learn Train Program. That 1.5, that's approved to stay in carry forward

[Adam Greshin, Commissioner of Finance and Management]: that's correct so I don't have that sheet in front of me but from memory I know this

[Rep. Robin Scheu, Chair, House Appropriations Committee]: This okay was sent by email but it would also be on our committee page.

[Adam Greshin, Commissioner of Finance and Management]: Okay,

[Rep. Robin Scheu, Chair, House Appropriations Committee]: thank you. It's also, it's the second memo, the version one was dated earlier. This is version two dated January 16. So, it's good to take a look at, because you can see what's left and we have pay act and non pay act approved. Tell me what the difference is so we understand what you're talking about there.

[Adam Greshin, Commissioner of Finance and Management]: Sometimes when we look at carry forward requests, we approve them, but we set aside part of that typically from base appropriations. I believe unusually, I believe they're one or two onetime appropriations that we set aside some money for pay act. But typically from base appropriations where they have leftover base, we say, good. And we set aside a component of that to meet their spring pay act need. You'll remember that you give us a pay act appropriation that the secretary of administration uses to meet, pay act, requests from departments and agencies.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Like requests for reclassifications and things like that?

[Adam Greshin, Commissioner of Finance and Management]: Well, requests to meet the pay act need that will that is baked into you know, last year's pact is baked into the base.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Right. For this year. Right.

[Adam Greshin, Commissioner of Finance and Management]: But we try to get a running start on that by saying, well, you had leftover money from last year. Let's use that for this year's pact instead of the pact. Okay. In some years, there have been years, although admittedly not recently. In my early tenure back in 1718, there were times when we couldn't fully meet the pay act request from department. We just didn't have it and in the appropriation, and so we gave departments 90% of what they asked for, for Yeah. In 5%. This is kind of harkening back to those days when we may not have enough pay act. So what we say is, look, you had surplus from the year before. Let's set aside some of that for pay act. So we actually put a a hold on that money. Departments actually don't have access to that until spring when we unlock it for use of

[Rep. Robin Scheu, Chair, House Appropriations Committee]: PAY So that's that's kind of reserved.

[Adam Greshin, Commissioner of Finance and Management]: Yes. We're we're essentially getting a run into

[Rep. Robin Scheu, Chair, House Appropriations Committee]: PAY Act is just straight carry forward. So, example, you're carrying forward, 10,600,000.0 and 28,400,000.0 for female related stuff as it comes in. And so that makes sense because we know we're going to have more costs. And, but maybe some of these others, what we don't have on here is like how far back they go.

[Adam Greshin, Commissioner of Finance and Management]: All of the carry forward requests are to keep going in the original appropriation purpose.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Right. No, I understand that. But it's some of the ones that you chose to revert Yeah. You could tell us that was back in 2019, that was back in 2018. We don't have that date

[Adam Greshin, Commissioner of Finance and Management]: That's in the depth ID that I'm looking. It's kind of a cheat sheet. And, you know, that doesn't have the original depth ID because we generally look at that. It's not particularly Yeah. Information. But, yeah. I mean, in the future, I can send you or in this one, I can send you with the debt ID, showing.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah. That would be helpful because this is an important part of how we look at the whole financial picture. And if there's stuff going back a decade that's many millions of dollars, I mean, like you figured out, we're not using this anymore, it's accomplished its purpose, which is what we should be looking at all of. We'd like to sometimes

[Adam Greshin, Commissioner of Finance and Management]: see that too. So that would be wonderful. John? I have a follow-up to your question here. On page three, there's like about eight or nine in a row here that are in parentheses in red. So there's nothing. 26, you know, the two columns. So what I'm talking about referencing? Yes. Again, from memory, if there are Those are probably legislative, I'm guessing. Yeah. JFO. Those were appropriation reversions that you took in legislation, I'm guessing, in act 27, current unit law that said we're going to appropriate these amounts, and then they were reappropriated already in act 26 act 27. So those were appropriations that were taken by the legislature. For as I mentioned in the memo, we Not large amounts. No. They're small, seriously. Yeah. Mhmm. 59,000. We generally dollars and 10¢. Even that, we don't take reversions from legislative or judicial. Kind of obey the separation of powers and but when ours we are specifically either requested to there are a couple in there that are not read from the legislature where they said, please revert this. Or when you put it in session law to revert it, then we were. Otherwise, we don't do that. You'll see no judicial reversions in there, I believe. Last year, I think there was one judicial reversion that they requested the judiciary because they wanted to reappropriate. So but yeah, that's those red in a row.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah, those we saw in the, some of those we saw in the budget adjustment. Right. And yeah, we finished we finished, some of those. You may have sort of said that. Sorry. I'm getting distracted by other things. Things that ended. So we didn't need the money. So that's alleged the CFO gave them back. We had a tax structure commission

[Adam Greshin, Commissioner of Finance and Management]: Right.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: That ended a couple years ago, and I think it's finally closed out, and that was what was left over.

[Adam Greshin, Commissioner of Finance and Management]: You know, all that sort of thing.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: So just clean up that those ones, and you you can tell because they're generally relatively small. That's clean up. Yeah. Like, 99¢.

[Adam Greshin, Commissioner of Finance and Management]: Was It roughly I think I laid out in the memo, actually. Was a little over $10,000,000 of conversions from appropriations that were actually part of session law.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: So we I think if you wanna give if you could give us that depth ID with the date thing. Yes. That's right. Because the way we read it is the last two numbers of the date that it started or something.

[Adam Greshin, Commissioner of Finance and Management]: Yeah. The actual the second to last two numbers. Right. So yeah. But you you'll see when you look at you'll you'll understand.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah. That's because that's what I think we've seen before which we had that information as well. So, this is helpful, but that

[Adam Greshin, Commissioner of Finance and Management]: would be even more helpful.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: That's when it's enacted.

[Adam Greshin, Commissioner of Finance and Management]: That's correct.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: So, if there are some that are on here that are just all on the right, but negative, So, in black, so, so let's just say from, there's AOA transitional retirement co of minus 1.74714 and under reversions, just it sounded like that got reverted.

[Adam Greshin, Commissioner of Finance and Management]: Yes. This that's the transitional retirement. That may have been an appropriation that was originally given to AOA to help with that one fourteen, which was the pension provision Yeah. Yeah. Which led to and we thought we would use that. Originally, it's kind of interesting to note. We thought we originally used that as a backstop

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah.

[Adam Greshin, Commissioner of Finance and Management]: In case we were running shy with our ADAC calculations. But what we realized is the language was pretty prescriptive. Yeah. It said for I think it specifically cited 2023 as the year. So we realized that, you know, we have to obey what the appropriations language was. And so Right. It was essentially just dead money after 2023. So that's why it's reverted.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah. So is is the negative just means

[Adam Greshin, Commissioner of Finance and Management]: The negative

[Rep. Robin Scheu, Chair, House Appropriations Committee]: zero. I mean, so the it has no other lines because sometimes you have things in and you have an amount, and then you're reverting something. I'm just trying to match it So the so the when the previous two columns are blank, it just means you've now brought it to zero?

[Adam Greshin, Commissioner of Finance and Management]: Yeah. Well, it means there was no carry forward, and it's it was just totally reverted. And the reason the negative lines on the right are negative is because it's a reduction in spending authority. The lines to the under the pay act and non pay act carry forward are positive because that's an increase in spending authority for Yeah. This fiscal year. So that that's the kind of the accounting Okay. Methodology.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yeah, so this is good to take a look at everybody. You'll have your departments and portfolios and if you have questions, we'll get a little bit more information with the debt ID information and then just good to have that as we go through certainly the f r twenty seven budget as well. Yeah. Anything else you have for us, Adam, or anybody questions that at Well,

[Adam Greshin, Commissioner of Finance and Management]: madam chair, I know that you had reached out on the CNN story. I think you've gone you've spoken with the secretary of administration. You know, I would just emphasize, we are entirely news takers, not newsmakers. We refer

[Rep. Robin Scheu, Chair, House Appropriations Committee]: So what I'm just referring to back up, Senator Welch yesterday said, he just learned that we're one of 13 states that are going to be up for this super review of federal funds. And I pondered that. And this morning, I looked for an article, and I sent it to Sarah and Adam to say, how is this going to affect everybody's work? Or is it? So that was my question.

[Adam Greshin, Commissioner of Finance and Management]: And what I would say to the committee is that right now, there's nothing for us to do other than wait to see what they send us, if any. Yeah. Yeah. I think you're aware this administration does a lot of things, and then the next day, they don't do it.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: A lot. Yes. I didn't know if there was something farther along that it was making everybody do a whole lot of work. I I have nightmares about you all having to do crazy things

[Adam Greshin, Commissioner of Finance and Management]: to They may contact us. I suspect they will at

[Rep. Robin Scheu, Chair, House Appropriations Committee]: some point. They may change eye contact. We totally understand that things can change hour by hour. But if this had started, it would be helpful to know that it's going to impact all of our work.

[Unidentified Committee Member]: So under any other circumstances, we've been audited, not the super

[Adam Greshin, Commissioner of Finance and Management]: audit, but I don't know what a super audit would be. It sounds pretty meditate actually. But

[Unidentified Committee Member]: is but we've been audited by the federal government in the past. So what does

[Adam Greshin, Commissioner of Finance and Management]: that entail? So we're audited annually, really, for the programs that that we run with the federal government. They audit us. So I can't imagine it entails more than what a normal single audit of all of our federal programs would entail. That would be my guess. But, honestly, I I don't know is the answer any more than that. Because, again, these programs are audited regularly. You know, within finance and management, we within the financial operations part of our group, Jordan Black, Deegan, and Kim Baker are, you know, federal audit folks. They keep track of these audits. They track every department's results. Sometimes when there are findings, they track those and we, you know, remediate. So I don't know is the answer. And this is not new. In all the programs we run are open books. They're audited every year. So

[Unidentified Committee Member]: Well, so several years ago when we started receiving federal funds from the COVID programs,

[Adam Greshin, Commissioner of Finance and Management]: there

[Unidentified Committee Member]: was we hired a third party to help with determining what expenditures would be available. I understand there's always gonna be a question in time, but the the penalty at from some other was the the fear of clawbacks. And how does that work?

[Adam Greshin, Commissioner of Finance and Management]: So, I mean, clawbacks can come from two things. One, the administration was looking for to looking to take money back that was unused. And so the requirement was anything that wasn't spent by ex state would be clawed back. That was part of the original legislation, but I think the new administration was looking to claw back money that may not have been just unused, but money that may have been obfuscated, but Used improperly. Yeah. So so that was the first thing or, you know, the major change. But unchanged was the idea that any money not spent by I forget what the drop dead date. I think originally it was 12/31/2026 may still be empty. Would be clawed back. That we expected. That was entirely anticipated. So

[Rep. Wayne Laroche, Member]: thank you. You're welcome. As I recall from my experience, of course, US Fish and Wildlife Service, had to do Fish and Wildlife routine, fairly routine. Think around 2008, 2001, we had that big problem, downturn problem. Instead of maybe some things that clogged back, but there were some things that were frozen. We weren't able to draw money that got to do any longer even though it had been approved for us. Those kinds of things can happen.

[Adam Greshin, Commissioner of Finance and Management]: For the Coronavirus Relief Fund and the ARPA funds, we submitted quarterly reports. Again, I mean, that's why it's a little mysterious to us because we've been reporting on these programs all along. Now those are just the ARPA programs, coronavirus relief fund. We have literally, as you guys know, hundreds of federal programs, but all of those are audited. So that's why, you know, I say we're really, not newsmakers, kinda news takers on this one. This was brought us by surprise. Yeah. Well, there's

[Rep. Robin Scheu, Chair, House Appropriations Committee]: a lot of that going around.

[Adam Greshin, Commissioner of Finance and Management]: So when we know, we'll Yeah.

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Okay. Get the Yeah. Keep it posted. We just sure what we can do about it, but it impacts our work together as we're trying to get through the budget. It's helpful to know that we don't want to add to the complications. Thank you for coming in.

[Adam Greshin, Commissioner of Finance and Management]: Appreciate it. Mike, can we go over there?

[Rep. Robin Scheu, Chair, House Appropriations Committee]: Yes, and he's going to be talking us, with Emily Byrne, and she's on her way I think, so why don't we go offline for a couple of minutes, call them please, and then we'll go from there.