Vermont lawmakers heard contradictory testimony Thursday as they begin the process of determining what role state government will play in addressing federal cuts to key human services programs.
The Legislature’s 10-person Joint Fiscal Committee met for the first time since the enactment of a federal budget reconciliation package that will, over the next 10 years, reduce funding for Medicaid, the Supplemental Nutrition Assistance Program, and other programs for low-income Americans.
Analysts at the Legislature’s Joint Fiscal Office say the federal cuts won’t significantly impact the budget that state lawmakers approved in May. In the coming years, however, state budget writers will be contending with hundreds of millions of dollars in lost federal revenues.
“We have some time to plan,” said Brattleboro Rep. Emilie Kornheiser, the Democratic chair of the Joint Fiscal Committee. “Many of the really dire impacts of federal action are going to be staged out, and that means that we have an opportunity to try to mitigate impacts.”
“These funding threats feel dire and threatening to our ability to provide basic-needs support to Vermonters who are going to need them more than ever."Alison Calderara, Capstone Community Action
The extent to which Vermont can soften the blow became a point of contention Thursday.
Secretary of Human Services Jenny Samuelson heads the agency that produced an oft-cited estimate for the number of Vermonters at risk of losing government-funded health insurance as a result of the federal budget package.
Samuelson told lawmakers she now believes that estimate – 45,000 – is overly pessimistic.
“That number I no longer believe is accurate,” Samuelson said.
She said state government will have time to implement changes to both Medicaid and the Supplemental Nutrition Assistance Program before the most consequential federal provisions take effect. And early estimates about how many low-income Vermonters will lose access to key benefits and services, Samuelson said, is breeding unnecessary and unhelpful “despair.”
“Just this week I was in Bennington and sitting with providers, and many of the providers there – who we need to engage in these solutions – do not have all of the facts,” she said. “And so they’re going from inflated facts, and based on that are almost at the point of despair.”
Kathryn Van Haste, state director for Sen. Bernie Sanders, offered a more dire outlook.
“I will say that I appreciate Sec. Samuelson’s optimism. But I can’t say that I share it,” Van Haste told lawmakers over Zoom. “Things aren’t good, and I would be doing you a disservice in suggesting that they are, or that they will be okay. I think it’s important that we acknowledge that.”
“There are elevated risks from things that are really unusual that we don’t know how they’re going to play out.”Tom Kavet, economist for the Vermont Legislature
Van Haste said lawmakers will play a vital role in managing the effects of what Sanders recently called the “most destructive” piece of federal legislation in modern American history. She said she’s also not convinced they have the financial wherewithal to meaningfully forestall it.
“And I don’t know how the Legislature is going to stem that harm without causing a loss of services for Vermonters,” she said. “I just don’t know that it’s possible.”
The budget package approved by Congress in early July isn’t the only federal action that lawmakers will be wrestling with. Actions undertaken by the Trump administration since January have resulted in the pause or cancellation of more than $40 million in federal allocations to Vermont.
Aides for Vermont’s congressional delegation say rumors are swirling of yet more rescission proposals in the coming months. And President Donald Trump’s budget proposal for the next federal fiscal year, which begins in October, would, among other things, eliminate funding for a heating assistance program that distributes about $20 million annually to low-income families in Vermont.
Alison Calderara, executive director of Capstone Community Action, based in Barre, said agencies such as hers are questioning “our foundational ability to serve Vermonters.”
“These funding threats feel dire and threatening to our ability to provide basic-needs support to Vermonters who are going to need them more than ever,” Calderara said.
The Joint Fiscal Committee meeting came on the same day that economists for the Legislature and the Scott administration unveiled their latest revenue outlook for the state of Vermont.
While state revenues are currently forecast to hold “steady” in the coming fiscal years, “tumultuous swings” in economic policy coming out of Washington, D.C., could upend those predictions, according to the Legislature’s economist Tom Kavet.
“Don’t get comfortable,” Kavet told lawmakers and the governor Thursday. “There are elevated risks from things that are really unusual that we don’t know how they’re going to play out.”
Jeff Carr, the economist for the Scott administration, said Vermont is especially vulnerable to potential tariffs on Canadian energy.
“We live in uncertainty a lot. This is a different brand of uncertainty than I think that we’ve dealt with, because of the ambiguity associated with it,” Kavet said. “And so we’re kind of looking for – is there a point in time where there’s an event, or something that happens, that kind of breaks something serious, and does serious damage?”
Kornheiser said the Joint Fiscal Committee will do its best to delay any major spending decisions until the full Legislature returns in January. But she said the panel may have to act sooner, if government or nonprofit institutions make a compelling case for expedited aid.
Kornheiser said she’s thankful lawmakers have at least a year to resolve the most pressing fiscal dilemmas posed by Congressional budget actions.
“I am also really terrified,” she said, “about what’s going to happen to Vermonters and the state’s financial and administrative ability to respond.”
