Vermont Legislature SmartTranscripts:

[Speaker 0]: Apparently, you can print in color, but not make copies in color.

[Rep. Robin Scheu (Chair)]: Good morning. This is the House Appropriations Committee. It is Thursday, 04/02/2026. It's just after 11AM. We are going to do a review of the general fund operating statement. We look at lots of spreadsheets, but we don't always look at operating statements, and they tell us good stuff too. Annamalie is here from Joint Fiscal to talk to us about it. And is this also posted on our website? Yes. Yes, okay, so Dave can find it. All of us can find it. While I'm getting organized, I'll say what I said off camera, which is there's a caucus of a whole for education tomorrow at 08:45, and we'll be on the floor, and then we will be done in this community after that tomorrow. I know it's a holiday afternoon for some people, too, for Good Friday, so for those who celebrate that, we'll give you this book. Don't think the floor will be too long for our capital bill is next month. So the capital bill is going to be

[Unidentified Member (House Appropriations Committee)]: the main thing. I won't even have to read my notes. Great. Yeah, we've the capital bill in here. We voted to vote eleven-zero.

[Rep. Robin Scheu (Chair)]: Yeah, there you go. Time is half by all. You can add that. All right. The way we do it. You want to share screen or what do you want to do with that? I'll share screen in a minute. Okay.

[Speaker 0]: For the record, Emily Byrne from the Joint Pistol Office here to talk about the general fund operating statement and what it is, how it works, how to read it. Figure this will just be a lot of I'll put it up on the screen, pass one around. I'll intro to if I interrupt if

[Rep. Robin Scheu (Chair)]: you have questions. Yeah, we'll go

[Speaker 0]: from there. So I'll hand this out in a second. But so the operating, we call it an operating statement. Sometimes it's for the outlook. Those of you who have been around or on ways and means or education are very familiar with the education fund outlook. Transportation has a similar outlook operating statement. It's sort of like a It's an income statement, but it's not an income statement. That's the framework that it's under. It's the sources and the And we don't call them revenue and expenditures because it's not really revenue and expenditures. It's sources and uses and then transfers in and out. And the reason why it's more we rely on sources and uses, from the revenue perspective, both the revenue to the state plus other money coming in that's available to be spent. And then on the expenditure side, and we did a lot about this, I think, at the end of last section. But expenditure means that money's actually gone out the door. The outlooks and the operating statements are really appropriations that have been made. It's the authorization. We have this much anticipated revenue and here's what's authorized to be spent. Then here's how it's in balance. As opposed to what's actually spent in a fiscal year by state government. That you see in the ACFR, the financial statement that finance management produces in January every year for the after the close of a fiscal year. So this is really like from an operating perspective, it's more forward looking And the expenditure piece is all just appropriation based, which makes it a little different. And an operating statement is for a fund, not for an agency or for a department. We look at it specifically on a fund. Somebody coming in and going out of a fund, sort of blind. The Ed Fund operating statement is specific in terms of what appropriations the uses are, but the general fund has so many appropriations that there's one big line that says general fund appropriations.

[Rep. Robin Scheu (Chair)]: And even in the education outlook, they have a category for special aid, education, and Title I, all those. But they have the total of all the school budgets is the education payment or whatever, just the $2,000,000,000 So that doesn't get broken out either. And one thing Emily said to me when we were chatting about this is you get a couple to say, this is about a fund, not an agency. So as we get into understanding special funds more, there are operating statements for certain special funds, not for the little ones, but for some of the big ones. So if we understand how to read this, that will help us understand how to read special fund operating statements and request them and know what we're looking at when we get that done?

[Speaker 0]: So if we start at the top, it goes first. And I apologize that yours isn't in color. But I couldn't figure out how to make it copy in color. I can get you colored copies if you really want them, but the color is really only on those top parts to separate the fiscal years.

[Rep. Robin Scheu (Chair)]: But

[Speaker 0]: at the top, we've got The blues are the actuals, and we've got them going back a bunch of years. And then green is the current fiscal year that we're in, and then purple is the future fiscal year that we're currently appropriating. I believe representative Feltus asked this question when I presented this two weeks ago with the next line, the one that says forecast. So it refers to what revenue forecast is used. So it uses both FY '26 and FY '27. We're operating off of the emergency board adopted January forecast, to build the budget. What we do at JFO, and this is really how JFO, I should say, like back up a little bit. The purpose of the operating statement is right for JFO to make sure that you guys have a balanced budget. And for you all to see that you have a balanced budget. This is something that gets posted, that JFO historically posted, I think, because of COVID and changes that didn't get posted for little while, but this is something that we will post every time a body takes action on the budget. Show what it is, and then it will come, budget adjustment.

[Rep. Robin Scheu (Chair)]: So if you were looking at the forecast, so that's the consensus revenue forecast, the date of the consensus revenue forecast. So if we were to look at something in September, if you were to show it at a joint fiscal committee, it would have July '26 because we would have had that consensus revenue forecast.

[Speaker 0]: So if and when there's a new consensus revenue forecast adopted, that's the only number that would change. And then that's how we know from an operating perspective, are we going to have more money or less money than we anticipated when you built the budget? And that's what drives do you need to do a rescission, or is there going be money available for budget adjustment or changes within that current law revenue section.

[Rep. Robin Scheu (Chair)]: So if we get a new forecast in July, would theoretically all of these upper numbers that are the sources change? The only one that will change

[Speaker 0]: is the current law revenue. The other thing that will change is line three where you have the tax and revenue changes. If you change the law and change the way that revenue is collected, so if the miscellaneous tax bill will go forward, Daniel and Tom and Jeff, they do a new forecast for the emergency board, will include any of those assumptions in the new forecast. So the current law revenue, the tax changes stuff changes. So you'll see on here, the only tax changes, there were some I I can't remember now. So we've got the $4,000,000 anticipated decrease associated in FY26 associated with the miscellaneous tax bill, and then the net changes in FY27 associated with the meals and rooms change and the corporate change and the additional tax credits, which that's what those lines

[Unidentified Member (House Appropriations Committee)]: Show up. I'd say somehow I

[Speaker 0]: missed where is the forecast here? The current law revenue line is That's the

[Unidentified Member (House Appropriations Committee)]: subject to change in July. Yep.

[Speaker 0]: And then again in January.

[Rep. Robin Scheu (Chair)]: Yeah. Right. But FY twenty six will not change. Correct. So just in 2017, 2017. Right.

[Speaker 0]: And then what will happen at close out, at close out we get a lot of the rep, we get the revenue numbers updated from finance and management because in 2025, that number was the actual general fund receipts in 2025.

[Rep. Robin Scheu (Chair)]: So we're on that, the sources part where we're getting our ribbon. Yep.

[Speaker 0]: So we're in line oh, my phones haven't gone through yet. So we went through line three. Line four, the property transfer tax redirect. So, there's property transfer tax that goes directly to the general fund, then there's that language in section D100 that redirects a little bit to the general fund. So, that's where we capture that amount. And then on line eight, we the so then we broke them out into ongoing and one time just to make it clear for when we're doing the analysis to determine is there a base for one time or one time for base, etcetera. The direct applications should be familiar, right? So this is money that's coming to the general fund from other funds. So this

[Rep. Robin Scheu (Chair)]: would be DFR money and not lottery, but liquor.

[Speaker 0]: Yeah, liquor and lottery money.

[Rep. Robin Scheu (Chair)]: Not lottery. Lottery all goes to the education funds.

[Speaker 0]: Liquor funds, DFR. Cannabis? Not anymore.

[Rep. Robin Scheu (Chair)]: That's right. It's general fund. Never mind.

[Speaker 0]: Never mind. The attorney general's office, the federal receipts account from AHS. I'm

[Rep. Robin Scheu (Chair)]: forgetting any other ones. Okay, I hope to learn really what federal receipts

[Unidentified Member (House Appropriations Committee)]: is. What's left over after they pay emergency and home services? No, but I'd like to understand

[Rep. Robin Scheu (Chair)]: it better too, actually. Yeah, understand kind of what, how much is left over in a typical year. I want to understand the blue book. Is that something we can learn about too?

[Speaker 0]: Yes, you can learn about

[Rep. Robin Scheu (Chair)]: anything. You can about yourself.

[Speaker 0]: You need check-in with agency of human services and come. So it's probably better

[Rep. Robin Scheu (Chair)]: to have that. Right. Talk about it. Okay.

[Speaker 0]: And then so

[Rep. Robin Scheu (Chair)]: Other transfers were from the budget adjustment and that was due to the write down of revenue, the downgrade of revenue? Think so. And then they had to do more transfers.

[Speaker 0]: I believe I think that's what that might point to us. I should remember. I did

[Rep. Robin Scheu (Chair)]: not know what that question was. I'll follow-up. 1,000,000 from there.

[Speaker 0]: And what that one was. So then the reversions that we have coming back to the general fund, right? So if money is appropriated, right? We operate under the That's what's appropriated. If the expenditure of that appropriation is less than what's appropriated, then you can revert the money back to the general fund. And then on line 13, the other one time transfers, that's the technology modernization fund transfer, that 9.5. And in line 12, the reason the reversions are a little

[Rep. Robin Scheu (Chair)]: bit different there is that we reverted the emissions repair program because only two or three people have used it. So, we took the five ninety eight back. There might have been something else too, but that was the one.

[Speaker 0]: And then the other piece of additional revenue on line 15. So for the last couple of fiscal years, there's been an assumption that there would be revenue on the bottom line from the prior year that would be carried forward into the current fiscal year. So in 'twenty five, that was 158,000,000 'twenty six, we're assuming $257,000,000 And then in 'twenty seven, the governor proposed the 74,900,000.0 which we reduced to 71,000,000 because of that $4,000,000 change. Right.

[Rep. Robin Scheu (Chair)]: And it sounded right from the We had $2.57. Yes. So that's where we got the 50,000,000, the 30,000,000 and the 30,000,000.

[Speaker 0]: Part of it, yeah. It was a combination of what was left on the bottom line. And same as this year, there just was an anticipated significant amount of money that was going to carry forward. So there was a $77,000,000 that went to

[Rep. Robin Scheu (Chair)]: the education fund. Is that what's part of that? Right. Exactly.

[Unidentified Member (House Appropriations Committee)]: Does that include does that is that what's left over after you do all the contingencies as well? No, that's before the contingencies.

[Rep. Robin Scheu (Chair)]: That's where the contingencies could be used, taken from those monies. That's why so much could go to the education fund and we did the 50 and the 30 and the 30. That was all contingent, but we had a good idea because April taxes had come in, that there was going to be some.

[Unidentified Member (House Appropriations Committee)]: And then, of course, you had to do the funds that we had, the reserves. Is this after the reserves as well?

[Rep. Robin Scheu (Chair)]: Statutory. We always fill the statutory that's always part of the budget this would be after statutory reserve so

[Unidentified Member (House Appropriations Committee)]: that the statutory so we did them and then we did the education fund and then we did the 30 a

[Rep. Robin Scheu (Chair)]: lot of that came out of that February yeah yeah okay Statutory was not, aerial revving is never contingent, right? Okay. Just curious. Okay.

[Speaker 0]: Then uses, the next box below. In arbitrary versions, that's actually what we reverted back

[Unidentified Member (House Appropriations Committee)]: to federal government in 2005.

[Speaker 0]: Yeah, and so the

[Rep. Robin Scheu (Chair)]: Yeah, they didn't revert back to the federal government.

[Speaker 0]: No, they didn't revert back to the federal government. This one Yeah, 2025 was a funny year related to ARPA in terms of like, there were stuff reverted into the general fund and then appropriated back out. So there's also an ARPA they don't match.

[Unidentified Participant]: And I can't remember why off the top of

[Speaker 0]: my head they don't match. But they're from the actuals perspective in terms of like the finance and management accounting for what came into the general fund and then went back out of the general fund. There's this ARPA stuff that's happening that won't happen again.

[Unidentified Member (House Appropriations Committee)]: Those are those swaps that we'll able to use to the account.

[Speaker 0]: Yeah, I

[Rep. Robin Scheu (Chair)]: get more info on that if you want more info on it, but it's not

[Speaker 0]: it doesn't change the sort

[Unidentified Member (House Appropriations Committee)]: of sticker picture. Excuse me. Yeah. So

[Speaker 0]: then on the uses, we always have the base appropriations. So these are all of the appropriations made in the big bill, CRA Act, and other bills. So money that was explicitly appropriated in other bills. Then we have a separate section for the one time appropriations.

[Rep. Robin Scheu (Chair)]: So that was $220,000 to other bills. Yes. So if we looked in the web report, would that shop with the web report? Yes. Thought we had done more than that.

[Speaker 0]: You had done more one time. So there's 1,700,000 in the one times and there's $2.25.

[Rep. Robin Scheu (Chair)]: I see base and I see. Okay. Got it.

[Speaker 0]: Yeah. It's a little and you should on the appropriations side, that 2,500,000,000.0 at the bottom should tie to the web report.

[Rep. Robin Scheu (Chair)]: Okay. Yeah.

[Speaker 0]: We break out, right? The tying of specific numbers to the web report, like the pay act is in its own, you have to add up all three pay act appropriations, piece out the other bills and the one times, but in aggregate. So these are the appropriations that were made. What's helpful with this is you can see changes in the one times, how much there were in 'twenty five and 'twenty six versus Yeah,

[Rep. Robin Scheu (Chair)]: it's really 11 less than the one times and a lot less than other bills. Which is interesting because

[Speaker 0]: some of the

[Rep. Robin Scheu (Chair)]: basis up 400,000,000 or $350,000,000 over '25, so two years later. And yet, most of that is in standard base appropriations. So it's all that, it's people programs, not new, probably not bills, which we went from 8,900,000.0 in bills down to 220,000 in bills base.

[Speaker 0]: And I think the one thing that also makes comparing 'twenty six and 'twenty seven or 'twenty five and 'twenty seven a little tricky is you don't have the benefit of the Budget Adjustment Act, which in this the last couple of years, there's been more money at the revenue forecasts that have been able to be appropriated. There's a jump in the budget adjustment plus there has been anticipated money at year end that's been appropriated. So you'll see in line 27, there was about $80,000,000 of one time appropriations in FY '25. And then that $50,000,000 appropriation to the e board was done in '26. So those don't always reoccur. And then we have the budget adjustment on there separately.

[Rep. Robin Scheu (Chair)]: Yes. Yeah, even though we didn't, no, we had 26 questions, it wasn't '25, we didn't have questions. With our one time appropriations were 200,000,000 in 2026 and they're 40,000,000 this year. And we're not anticipating a massive contingent.

[Unidentified Member (House Appropriations Committee)]: BAA will be a challenge next year.

[Rep. Robin Scheu (Chair)]: I'm guessing it will be. Well, we'll see what the revenue forecast says Assuming

[Unidentified Member (House Appropriations Committee)]: that right, but while we won't be here in December, JFO will be, so you guys are working behind the scenes

[Rep. Robin Scheu (Chair)]: Yeah, don't have a meeting getting everything of this committee in December because the new committee hasn't

[Unidentified Member (House Appropriations Committee)]: Technically, we don't know who's here. Right, right, exactly.

[Rep. Robin Scheu (Chair)]: Doesn't mean we can't pay attention. Pay attention. We will. Yeah. The revenue forecast will high will be interesting.

[Speaker 0]: Okay. So then if we go down to transfers, and so

[Unidentified Member (House Appropriations Committee)]: these are One question. Oh, yep. What are ARPA ERRs? So this

[Speaker 0]: is also similar with the ARPA reversions. I'll double check with finance and management to come up with a better way to explain it. But as part of how to close out the ARPA fund, they were able to swap some general fund and ARPA fund. But that meant that those general funds had to go into the general fund. So it was sort of an FY '25 thing. Think those I'll check it before I get out of front of my skis.

[Rep. Robin Scheu (Chair)]: I'll check with finance management on how to explain. I'll get something in writing. Total, because of that, our total uses actually went down from 25. So 1,600,000,000.0 to 2.55. And in fact, we only went up $2,000,000 from 26,000,000 to 27,000,000

[Speaker 0]: Right. And some of that is contingent. Right.

[Rep. Robin Scheu (Chair)]: Because the ongoing approves went up. So another

[Speaker 0]: thing that can complicate that, if you will, is what you decide to transfer out of the general fund versus what you appropriate out of the general fund, right? And how it shows up on these sheets. And like, so in which sets you're comparing. So the next section is the transfers to and from the general fund. Before we get to that, what is operating positions? So that's like, that's the sort of accounting term, I would say. So like, you get to that number, it's the net of revenue and sources and uses It gives you, oh, sources. I'm looking at the wrong sources. Yeah. Line 16 and line 30. Right. It's line 31. Right.

[Unidentified Member (House Appropriations Committee)]: 16, you said?

[Rep. Robin Scheu (Chair)]: Sorry. Line 16 is line 30. When

[Speaker 0]: you asked me to do this, I realized that Julia has done a really great, like, how to read the Ed Fund outlooks. And that'll be one of my summer projects.

[Rep. Robin Scheu (Chair)]: That would be terrific. I totally understand that one.

[Speaker 0]: Yes. And we'll make a this line minus this line a narrative to go with this. Yeah, that

[Rep. Robin Scheu (Chair)]: would be great. Thank you.

[Speaker 0]: So then, so take your sources, subtract your uses, you have a balance left over, and this is where transfers in and out of the fund occur. The first one, the first couple should look familiar. So the debt service fund transfer. Some years there's been transfers to internal service funds. And I should say like sometimes different people who have been in charge of the operating statement categorize things a little differently. So I think historically transfers to internal service funds would have shown up there. I want to think about what we put in the other funds and whether I can't remember when we moved money to the IT fund, if we want to put that on a separate line or not.

[Rep. Robin Scheu (Chair)]: Maybe since we're putting to the computer modernization fund, which is tax department. What are all the little footnotes? Are those something somewhere else that we don't

[Speaker 0]: They are something somewhere else for JFO to refer to. They are. Any of those little footnote means that we had to add up a bunch of numbers to get to that number. And there's so we that's what has all our backup documentation. And part of what when we are here over the weekend after you guys pass the bill is putting like, okay, that spreadsheet has this number on it and it matches that number. And you added it up over here and it didn't match and just doing a bunch of reconciliation. So part of that is reconciling the operating statements to make sure we're carrying everything that's in the bill. The other thing you can do on the uses side and on the transfer side thing is like, you read the actual bill, right, you should be able to add up all the numbers or to find most of the numbers in the bill itself. With the revenue, a little different, right? Because like the forecast doesn't live in statute. You have to go to the revenue forecast itself. So it's more of a like part of putting together, like, how to read the operating statement will be like, where do you find this information?

[Unidentified Member (House Appropriations Committee)]: So they're like a little link to someplace else in the spreadsheet? Yeah. Or, you know

[Speaker 0]: At the page. Where do you go to? The one I hesitated only because sometimes things are statutory. Like if it's a statutory transfer, say to the reserves, it's not going to show up explicitly in a bill necessarily, right? Because finance management is going to execute the statutory requirement as it's outlined. So it gets a little It's not totally straightforward.

[Unidentified Member (House Appropriations Committee)]: Yeah. To the GEO debt service fund and the cash fund, those are basically like capital money.

[Rep. Robin Scheu (Chair)]: Well, the cash fund is the capital bill. Yes, they're both cash,

[Unidentified Member (House Appropriations Committee)]: but the debt service is the capital bill.

[Speaker 0]: It's money that we've bonded through the capital bill that we now

[Rep. Robin Scheu (Chair)]: owe What's our

[Unidentified Member (House Appropriations Committee)]: our debt?

[Rep. Robin Scheu (Chair)]: Obligation. So

[Unidentified Member (House Appropriations Committee)]: that ties into the capital budget. That's what we owe this year.

[Rep. Robin Scheu (Chair)]: Well, it's not just the bond. Yeah, it is. Right. So this is the one we used to do a general fund payment, and now we're doing a transfer, and that saves us money going into our reserve funds and our reserves, which could be a risk over time. When we talked about that a lot when this first was proposed a couple of years ago,

[Unidentified Member (House Appropriations Committee)]: I remember we talked about it

[Rep. Robin Scheu (Chair)]: three or four years ago. Yeah, right, when it first was proposed to do a transfer as opposed to an appropriation. It meant that we didn't include that as part of how we figure out what our general plan should be.

[Unidentified Member (House Appropriations Committee)]: Yeah, but then the cash fund is also reserved, that's also set aside for bonding purposes. It's not being bonded, but it's being Well,

[Rep. Robin Scheu (Chair)]: the cash fund is all the projects that we, that's all in our budget. But instead of bonding, they're using it, it's often for design and stuff that really doesn't need to be bonded for years. The

[Unidentified Member (House Appropriations Committee)]: other thing you hear on is it says state employee pension teachers retirement. We don't have the plus in here, the pension plus or do we?

[Speaker 0]: No, that's an appropriation. That's a separate, that's in the appropriations section.

[Rep. Robin Scheu (Chair)]: That's Is there a special addition that we did because of inflation or something like that?

[Speaker 0]: Oh, I'll get to what those are. Oh, okay. Those are special.

[Unidentified Member (House Appropriations Committee)]: So this is the only place in state government where we have interests that we have to pay through the bonding in the capital Building. Are we bonding anywhere else in state government for any other purposes that we have debt service that we have to?

[Rep. Robin Scheu (Chair)]: Only one I can think of off the top of my

[Speaker 0]: head is the transportation infrastructure bond.

[Unidentified Member (House Appropriations Committee)]: There's one other's place, that paid out a transportation fund.

[Speaker 0]: Where there is a fee associated that is only for that.

[Unidentified Member (House Appropriations Committee)]: So what we're trying to do is we're trying to minimize our interest in the long term. That was the cash on goal, yeah.

[Rep. Robin Scheu (Chair)]: On 138, we have two other funds, and it's 108. Is that where the $500,000 for the police radios would be? Yeah. We created a new fund and put $500,000 in.

[Speaker 0]: And that 115, I've gone back and forth on whether or not to call out the transfer to the education fund as its own line or not. Right now it's in the other funds line, but the 115 was 114,900 to the education fund and the governors, and then 500,000 to that radio fund. Then yours, because of the change with the meals and rooms tax and the purchase and use tax, you didn't have to transfer the 10,000,000. So that's where you get 108. But then you also transferred money to the Community and Disaster Resilience Fund and the Radio Fund.

[Rep. Robin Scheu (Chair)]: I think there was one other one. I'm not connecting dots here. I'm looking at FY25 and that line is 43.2. I'm looking at So is there such a big difference? So on a

[Speaker 0]: year to year, we can bring in what that line is made up of. Year to year, there's just different priorities on either what to spend money on or where to move money to. So the last two years we've had the big injection of funds into the education fund. Some years there's money transferred to internal service funds. Some year there's money transferred to other new funds that are created and in '26, of the 77,000,000. So there's I don't want to say it's like the flavor of the year, but it's just sort of whatever's going on in that year. If it's deemed appropriate or necessary for the operations of state government to move money from the general fund to a different fund that either doesn't have the revenues underperforming or expenditures were higher than anticipated, or it doesn't have a dedicated revenue source. And the only way to get money into the fund is to transfer general fund to it. That's why it's sort of other because it changes year to year and there's not a lot of consistency necessarily. The computer modernization fund and the cash fund and the debt service fund, that's happening every year. No matter what happens, we're going to transfer those funds. In other years, not as much. So then we have to that end, there's the other funds contingent. Sometimes in the contingency list, there are transfers to other funds. So off the top of my head, the $10,000,000 in 2026, that was money that went to the IT fund. So that was part of the contingency list. The first $10,000,000 went to

[Rep. Robin Scheu (Chair)]: a sort of build back thing for the eighteen months.

[Speaker 0]: And then the fifty, and then the thirty, and then the 30. And in 2025, the contingency list was like 111,000,000, something like that, which was a combination of online '27, those contingent appropriations. Then So

[Unidentified Member (House Appropriations Committee)]: it was $101,113,

[Speaker 0]: 114, that

[Rep. Robin Scheu (Chair)]: sounds right.

[Speaker 0]: About $11,314,000,000. So it was a combination of line 39 plus line 27 were those contingent appropriations that happened at the end of FY '25 and contingent transfers. To go to line 41, forty and forty one, those transfers to the state employee pension and the teacher's retirement. Those would get filled in in two instances. The first one, if as part of the budget, you decided to transfer general fund to one of those two funds, which can happen if it's deemed they need money. The other place that it happens is if at the close of the fiscal year, any unallocated and unreserved funds, 50% goes to the rainy day fund, 25% to teachers retirement and 25% to state employees pension fund. At the end of last year, after the contingent appropriations were made, there was still some general fund left. So there was small transfers. It was not quite half $1,000,000, but half $1,000,000 to each of the pension funds. And then you'll see down below, it was almost $1,000,000 to the rainy day fund. That's on line 46. So those three lines happen at the close of the fiscal year, unless the general assembly decides as part of the budget construct to move money to those funds, then that would show up in those lines. And then the last line on line 42, are you all familiar, I'm sure with the end of last year, there was a significant, the higher ed trust, the general fund receives the estate tax up until 125% of the July forecasted estate tax amount. Anything over and above that transfers to the Higher Ed Trust Fund. So in FY '25, the Higher Ed Trust Fund or the estate tax exceeded that 125% by the $26,400,000 So that was the amount that transferred to the Higher Ed Trust Fund. But it lands in the general fund, and then it

[Rep. Robin Scheu (Chair)]: goes out of the general fund. And it's hard to predict. The same task. Although there might be more as we have an aging population. But maybe they would account for that in the revenue forecast too. Well, do have a bit of a forecast for it. Right, that's what I mean. So, as we have an aging population, one could imagine it might, they might make it a little higher than they did twenty years ago. Okay,

[Speaker 0]: so then those are all the transfers out to other funds. And then below that are the assumptions that we make for the reserves. So recall the general fund stabilization reserve is 5% of prior year appropriations. Usually, we add to that fund because prior year appropriations go up. In '26, because of the amount of one time money that was flowing through and the changes between the two, you could take money out of the reserve to get it to the 5%. So that's what's happening. I'm on 45. But then it's going up a significant amount mostly because of the $50,000,000 contingent. So you have to reserve against that. And then the rainy day fund transfer. So that's year end that happens unless the general assembly decides to put more money into the rainy day fund, which show up there. 2,750 third reserve, that should all be familiar. The annual amount that's reserved for that. What you will see oh, we figured this out. Not next year, 2028. 2028. 2028, there'll be a fifty third week of Medicaid. That number will be a positive number because we're going to unreserve money to pay for the fifty third week of Medicaid in the 2028 budget. Line 48, to and from the Human Services Caseload Reserve. So that one can move a little bit as partly about because of how the human services caseload reserve amount is calculated. So it is tied to part of the reason for the human services caseload reserve. Is that right? Medicaid, we talk about the claims tail in Medicaid so that if somebody has a healthcare claim on June 30, you assume there's like a three month window for that claim to actually hit state government and get paid out. AHS, part of the human services case on reserve is to reserve against that. Like if there was a change in the plans or something were to happen, you need to have and if you're an insurance company, you have reserves to pay for claims that are covered in coverage for whatever. So, finance management do some math every year to figure out what that number has to be. And then what's in the human services caseload reserve goes up and down based on that Medicaid claims.

[Unidentified Member (House Appropriations Committee)]: Typical range here, depending. Think it's small. It's like

[Speaker 0]: a million dollars here and there. But that's more of a technical change that just has to keep everything in balance. But on line 49, we have to the other reserves in FY '26, that 60,000,000 should look familiar. So we reserved Thirty and thirty. Thirty and thirty.

[Rep. Robin Scheu (Chair)]: And we only have 30 left because the other 30 went to the Ed Fund.

[Speaker 0]: So when all of that was said and done, right, at the end of FY twenty six, it's projected that we'll have the 71,000,000, left over that can be utilized in f y twenty seven. So, right, those numbers should match. Line 52 from the prior fiscal year should line up with line 15 up above. What did I say? Lines

[Rep. Robin Scheu (Chair)]: No. Hold

[Speaker 0]: on. Line 52. So that Hold on.

[Rep. Robin Scheu (Chair)]: Line 51 should line up with 31. No. It should line up with 52 is just thirty one minuteus 51.

[Speaker 0]: Yes. 52, yep, it's thirty one minuteus 51. And then 52 in FY '25, so this, if you look up here, right? So this February, if we go up to the next fiscal year matches this prior year carry forward number. Right.

[Rep. Robin Scheu (Chair)]: 15 from the prior year.

[Speaker 0]: Correct. So then 71,000,000 that's on the

[Unidentified Member (House Appropriations Committee)]: bottom

[Speaker 0]: here pulls forward over here. And if we have I'm not showing the BAA with FY27 changes for the governor. But before this revenue tax change, it would have matched this 74.9.

[Rep. Robin Scheu (Chair)]: Right, but it matches our line 15. Correct.

[Speaker 0]: And then same with line 49, just supply. So last year, you reserve the $60,000,000 And then in '27,

[Rep. Robin Scheu (Chair)]: you're unreserving the third level for the education fund transfer.

[Speaker 0]: Then 52,000 This is how much is left. You have that $130,000 ish. Yes.

[Rep. Robin Scheu (Chair)]: I love that for the Senate. I was so generous.

[Unidentified Member (House Appropriations Committee)]: I know, he was good to be

[Rep. Robin Scheu (Chair)]: giving a little something to play with.

[Speaker 0]: And then, so in the bottom, this is just a summary of those reserves.

[Rep. Robin Scheu (Chair)]: It's nice to see also because people do ask us that.

[Unidentified Member (House Appropriations Committee)]: Thank you for this. It's best to know everything that's in here yet. What happens when we used to call it waterfall, so April 15 comes and goes, and we get a bead on what the return is going to be. What happens if there's waterfall monies or funds that are over the estimated? When does that show up for people to spend or to consider?

[Speaker 0]: To consider? So once we have a read on whether or not there is money or there isn't money, the Senate will make some decisions about what type of contingency list to include in the budget or to let it fall to the statutory allocations. That will show up in their bill. Then there will be in the conference committee. That'll be a difference between your two bills, and then we can negotiate that. What would happen, we don't know the revenue number until we know the revenue number, which is July, typically. For the last couple of years, there has been enough revenue to fund the full contingency list and then put money and then follow the statutory allocation. So that's where you see the money showing up

[Rep. Robin Scheu (Chair)]: in the pensions. And I think

[Speaker 0]: it was more than that in the prior year. But if that money doesn't materialize, then you only fund the contingent list up to as far as you can go. But it doesn't show up on here. And this is right where it gets funny because it's based on the forecast. Right? So it only shows up really until the actuals appear. And then the contingents show up to sort of match whatever the actuals were as compared to the previous. Does that make sense?

[Unidentified Member (House Appropriations Committee)]: Just in, things have been different, things were different fifteen years ago.

[Rep. Robin Scheu (Chair)]: Tell me about it. They're different again now than

[Unidentified Member (House Appropriations Committee)]: two years ago.

[Unidentified Member (House Appropriations Committee)]: Lynn? Yeah, this is not like a balance sheet where you had liabilities and So, assets and they should and I lost you on the line 52, the two fifty seven. Yep. It matches the line 13, line 15 for 26, that's sort of more like a, not quite an actual, but it's an actual ribbon. Then I lost her after that. What else matches, or what should I be? Is there anything there about Oh, they're just at

[Speaker 0]: the same thing, the 71 that's at the bottom on line 52 for the next year matches back up. It should match up to the house version on line 15, the 71.

[Rep. Robin Scheu (Chair)]: Right. Okay. Yeah. That's all.

[Speaker 0]: So I could see. And if there was a revenue downgrade, then the bottom number would become negative. That's what triggers a rescission process.

[Unidentified Member (House Appropriations Committee)]: Yeah. Does that mean we went from 71 to 0.1,

[Speaker 0]: based on the House? The governor had assumed 74.9. You assumed, after the miscellaneous packages, you assumed 70,000,000.

[Rep. Robin Scheu (Chair)]: The 71 was from the budget adjustment for '26, and now we're talking about '27. So you can compare

[Unidentified Member (House Appropriations Committee)]: that just up in terms of one follows the other. Right, so you have

[Rep. Robin Scheu (Chair)]: to go the house version of FY '27 because miscellaneous tax bill had the 3.96 cut down. That's why his, it doesn't match with the governor's because of the His number

[Unidentified Member (House Appropriations Committee)]: is 74.91. It's gone, it's been reduced. Yes.

[Rep. Robin Scheu (Chair)]: Because of the miscellaneous tax bill, which reduced. Yeah.

[Unidentified Member (House Appropriations Committee)]: So we are working now. Okay. But I'm just saying that the unallocated operating surplus now, based on these numbers, now we go from 71 for '26 to our budget that we did of 0.1, plus 1,000.

[Speaker 0]: Yeah, and typically we spend it all. Yes. And I don't want

[Unidentified Member (House Appropriations Committee)]: to see what happens on the Senate. Well, the

[Rep. Robin Scheu (Chair)]: 71 is basically all going to the Ed front. Right. So it wasn't that we spent it in our budget. We transferred, remember, 114,000,000

[Unidentified Member (House Appropriations Committee)]: to the education Plus the $30,000 Right,

[Rep. Robin Scheu (Chair)]: dollars 30,000,000 from that. So that's how it all went.

[Unidentified Member (House Appropriations Committee)]: Dollars 30,000,000, 30,000. But now it's a

[Rep. Robin Scheu (Chair)]: few million between friends, 20,000,000.

[Speaker 0]: Right. And I think the representative Stevens point fifteen years ago, right? The prior year, anticipated prior year money wasn't really a thing, right? Like the budget adjustment would utilize any changes, would react to whatever the changes in the anticipated revenue forecast were. The budget adjustment would put the budget at zero. And then the next year's budget wouldn't anticipate anything. Sort of a post COVID universe and the revenue Well, we'll forecast universe too. Yeah. The revenue forecast keeps being upgraded, except for in January, right, where it actually got downgraded. But there had been upgrades after the budget passed in July and again in January that generated revenue. The governor and the legislature, the governor has historically proposed and the legislature has accepted not spending it all in the current fiscal year and holding it some and pulling it forward and using it as one time, which is I think why that one time list has been so big and is starting to shrink because that reliance there And the forecast, I think, is catching up with sort of the systematic underlying changes that occurred during COVID that have changed, like, or have reset the base for the revenue going forward.

[Rep. Robin Scheu (Chair)]: You're just not going to have those borrowing, other pandemic or some other, you know, we're not going to have that kind of revenue coming into us the way we I

[Unidentified Member (House Appropriations Committee)]: remember when Tom and I both came in, we had the budget vetoed for Governor Douglas. And then for the next two or three years or more, we had rescissions every July 15 because we were budgeting more, even though it was balanced, we budgeted more than we actually had someone who

[Rep. Robin Scheu (Chair)]: came in July. That was the

[Unidentified Member (House Appropriations Committee)]: great recession as well, so it was

[Rep. Robin Scheu (Chair)]: thousand and eight-nine, yeah, the challenges for change. Yes. Was deeply involved

[Unidentified Member (House Appropriations Committee)]: in From 2011 on, we had Irene and we had

[Rep. Robin Scheu (Chair)]: Yeah, so what's normal anymore, right? We have to be able to flex and respond to whatever we've got now. Are you looking for somebody? No. Helps.

[Unidentified Member (House Appropriations Committee)]: Also, when they said the administrative budgets or salaries never went backwards, I can testify they did. They cut my salary. A lot of the others didn't me. He got some paid time.

[Rep. Robin Scheu (Chair)]: So, we're still on line 52, we have an unallocated operating surplus of $200,000

[Speaker 0]: Yeah, 130 ish.

[Rep. Robin Scheu (Chair)]: No, it's line 52. Why do you have a two? We had 0.1.

[Speaker 0]: Oh, wonder, I handed that out on Friday,

[Unidentified Member (House Appropriations Committee)]: right? Monday,

[Speaker 0]: you moved money to a thing. You spent money on Monday.

[Unidentified Member (House Appropriations Committee)]: April 2.

[Speaker 0]: I can't remember what you spent money on on Monday. There was one last thing that you transferred money to. Yeah. There was. There was one thing that changed you from a 180,000 to a 150,000.

[Rep. Robin Scheu (Chair)]: Now it's not what?

[Speaker 0]: It's what it would change.

[Rep. Robin Scheu (Chair)]: So the one that you're looking at, was that on our

[Speaker 0]: That's what I gave you on Friday.

[Rep. Robin Scheu (Chair)]: So we need to get a new mini table. Yeah. One you the one step.

[Unidentified Member (House Appropriations Committee)]: 23.

[Rep. Robin Scheu (Chair)]: We did 50,000, a 180,

[Speaker 0]: and you did 50,000. 50,000 for something.

[Unidentified Member (House Appropriations Committee)]: I thought it was 130.

[Rep. Robin Scheu (Chair)]: It's only been a week. Yeah. Community journalism. Oh, yeah. Was a civic journalism.

[Speaker 0]: Thank you.

[Unidentified Member (House Appropriations Committee)]: One hundred and thirty and fifty, that's 80.

[Speaker 0]: Yeah, it was 180. We round to

[Rep. Robin Scheu (Chair)]: point two. Civic journalism, so we put the 50 and it was 130.

[Unidentified Member (House Appropriations Committee)]: Yeah, I

[Rep. Robin Scheu (Chair)]: will tweak it 100 and I made all these notes. Well, now you can

[Speaker 0]: do it for you. It's my fault. And

[Rep. Robin Scheu (Chair)]: then it's exactly right. Well, but up above it. I know. That's the thing

[Speaker 0]: too. Like the minute one, somebody takes action or there's a revenue forecast, the whole thing goes

[Rep. Robin Scheu (Chair)]: out the window. Right. But it's still pretty close. It's not like it's 10,000,000 or Right.

[Unidentified Member (House Appropriations Committee)]: Well, that's why was surprised.

[Rep. Robin Scheu (Chair)]: I didn't think we were $200,000

[Speaker 0]: No, was that $50. And

[Rep. Robin Scheu (Chair)]: you remember what it was for. Well,

[Unidentified Member (House Appropriations Committee)]: found this very helpful. Thank you. Any other questions for Emily?

[Rep. Robin Scheu (Chair)]: Well, we may be seeing more of these as time goes on when we get into special science and engineers or maybe during April as we get through things and we learn about some other things that I have a new list of a couple of things that we're gonna talk about, which actually maybe what Emily White or Tia, I'll just mention. Sort of some accountability and oversight, deep divey kinds of things. Talked to the chairs last night. So the EFR, the Extraordinary Financial Relief at Nursing Facilities and the Private for Nonprofit and Rate Setting, I guess they had them in yesterday, some people into human services, and that sounded like something that they were interested in and are doing a little bit more questioning about what was going on there. So I'll work with Autumn about getting that. And then another one that came up, Trevor, if you want to maybe talk to Chair Sheldon about this one, because it's about clean water fund broadly, but also where the money is going, how much money is going into private roads. I have the clean water service providers that were created. It was like we created a new system on top of a facility we already had. What's up with that? How's it done? Are projects getting done? If you could just talk with her a little bit, and then we can figure out who we should have come in and talk about So two very different things. There was a question to talk a little bit more about AOE, but I don't have anything definite. I don't have anything enough to say of what we should

[Unidentified Member (House Appropriations Committee)]: do about that. Could you explain what you were talking about yesterday? I had somebody ask me this morning. The AOE who did not get there 700,000? Yeah. Now, was that for the READ program? Sounded like it was the same thing.

[Rep. Robin Scheu (Chair)]: The budget adjustment, we didn't have anything about this, and then we had the revenue downgrade. And so the administration had to come back and say, where are we going to cut money and what are we going to do to make up for this? A lot of it was transportation. At the same time, they reverted more money. And part of that reversion was they said, we want to spend half $1,000,000 on the accountability courts, and we'd like to put $700,000 more into the Read Vermont program. That's okay. So we agreed to do the accountability courts, but nobody had time to take any testimony on the Read Vermont. We did not do that. That was only in the budget adjustment. They wanted We did not touch their budget for FY twenty seventh. Whatever they gave us is what their budget is. And so if they didn't put money in for Reed's Vermont, we didn't take it out. We didn't touch their budget for any of the money.

[Unidentified Member (House Appropriations Committee)]: We never took any testimony on it. No. So we don't know what to do.

[Rep. Robin Scheu (Chair)]: No. And that would be a house add thing to be taken and saying we're not going to do it. But we did not touch the Agency of Education's budget for FY 'twenty seven. So they're translating somehow what we chose not to do in the budget adjustment with their FY '27 budget. That's the best I can explain.

[Unidentified Member (House Appropriations Committee)]: I mean, they're responsible for running that program. They wanted more.

[Rep. Robin Scheu (Chair)]: They wanted more in FY 'twenty six because they were running out. So presumably in their FY 'twenty seven budget, they put in what they needed. We didn't touch it. That's right. So is the agency of education concerned about this or just people in general who think it got lost? Well, AOE, it was in the Dear Jane letter. It was an addendum saying you didn't fund the 700,000. Well, that was the budget adjustment. It was nothing to do with the budget. We didn't touch the AOE budget. So it's confusion from their agency. And that's what they were doing. And maybe AOE as well.

[Unidentified Member (House Appropriations Committee)]: And that's what the reporter was asking me. Right. Yes. Right. We anything. Didn't

[Rep. Robin Scheu (Chair)]: No. We didn't. Here. We did not put

[Unidentified Member (House Appropriations Committee)]: anything budget adjustment after I spoke to you. Yeah.

[Unidentified Member (House Appropriations Committee)]: It was a request. We did not fund that.

[Unidentified Member (House Appropriations Committee)]: This is apparently training for teachers to teach other teachers. Right. So it should be in their FY twenty seven budget. It should have been in their budget.

[Rep. Robin Scheu (Chair)]: I don't know whether it's in the FY twenty seven budget, but that's their responsibility to put it in. We didn't

[Unidentified Member (House Appropriations Committee)]: I couldn't see where that particular program was in there all.

[Rep. Robin Scheu (Chair)]: But it may be in, you know, mean, at a later month

[Unidentified Member (House Appropriations Committee)]: or something. Well, it's under their curriculum instruction.

[Rep. Robin Scheu (Chair)]: Yeah. So it's in there somewhere.

[Unidentified Member (House Appropriations Committee)]: It's just specified as a line item. Doesn't need

[Unidentified Member (House Appropriations Committee)]: to be necessary.

[Unidentified Member (House Appropriations Committee)]: Yeah. Seems like some of the states, like Louisiana and Mississippi, that have been proving things have been educating those teachers to do a better job. Right. So something we should know more about because of, you know. Yeah, that was supposedly the Mississippi miracle.

[Rep. Robin Scheu (Chair)]: They've proved the curriculum training for the teachers in Right. Have probably strong instances of education and also in the schools they're really focused on helping the kids read, helping the teachers have the resources to help the kids read.

[Unidentified Member (House Appropriations Committee)]: To create an accountability. Yes,

[Rep. Robin Scheu (Chair)]: yes. Yeah, but so that's it. To answer your question, we didn't touch the AOE budget in FY twenty seven. Well, thought it

[Unidentified Member (House Appropriations Committee)]: was related to what you were talking about,

[Speaker 0]: but I just wanted to straighten

[Unidentified Member (House Appropriations Committee)]: that out. Because I don't know if I got it right when I

[Rep. Robin Scheu (Chair)]: talked to her. Right. Yeah.

[Unidentified Member (House Appropriations Committee)]: Because I met with him too and that was never brought up because I asked him,

[Unidentified Member (House Appropriations Committee)]: there anything in your budget

[Unidentified Member (House Appropriations Committee)]: I need to know about? So, no surprises if there's a question on the floor at all. It was done.

[Rep. Robin Scheu (Chair)]: So, you know, I mean, they don't put every single program in budget as line items. Just, So it's regular instruction or whatever the things are. We left all that alone. Okay, I have to go to a meeting. So we're on the floor at one And then tomorrow is the conference of the whole presentation, which we should go to on the floor. Then we have some things lined up for next week. One is a little fly bottom.