MONTPELIER — State fiscal leaders said Thursday they believe Vermont has the money to keep key federally-backed programs running, at least for now, if funding for those programs lapses because of the federal government shutdown. But they’re worried the feds might not repay the state after the fact — something that could make it harder to pay for other programs in the future.
Historically, states are reimbursed for costs incurred during a shutdown once Congress reaches a new spending deal. But President Donald Trump’s pattern since he won a second term of slashing previously-promised federal funding — and his administration’s recent targeting of money for Democratic-led states — has leaders in Vermont and other states concerned about what will happen after the impasse ends.
The Vermont Legislature’s Joint Fiscal Committee, which oversees state spending when lawmakers aren’t in session, met on Thursday, which was the 16th day of the government shutdown. Lawmakers heard from leaders in Gov. Phil Scott’s administration, Vermont’s three congressional offices and the state treasurer’s office about the impacts of the stalemate so far.
Rebecca Ellis, state director for U.S. Sen. Peter Welch, D-Vt., told the committee the shutdown would continue at least through the weekend, and a resolution in the near term seemed unlikely.
State leaders said federal funding is in hand to operate Vermont’s Medicaid program through the end of the year, and to operate its Special Supplemental Nutrition Program for Women, Infants and Children, or WIC, into at least early December.
Their more pressing concern, as of Thursday, was about whether the federal government would provide funding for the Low Income Home Energy Assistance Program, or LIHEAP, which helps many households afford fuel to heat their homes. The state was also worried Thursday whether federal funding would be available starting next month for federal nutritional benefits, known in Vermont as 3SquaresVT, though officials emphasized that could change in the coming days or weeks.
“My mantra is, ‘trying to get as comfortable as I can with discomfort’ — because that’s a constant right now,” said Sarah Clark, Scott’s secretary of administration, to the committee.
According to Mike Pieciak, the state treasurer, as of Thursday, Vermont could be facing some $30 million to $50 million in funding that the feds may not reimburse.
That’s “very different” from the last federal government shutdown, which spanned 35 days between December 2018 and January 2019, Clark said, when the person with her job at that point would have been “much more confident that we were going to get reimbursed.”
“So, how do we navigate that uncertainty?” she continued. “I don’t think anybody has a playbook.”
Pieciak estimated that the state has at least $700 million it could draw on to plug gaps caused by lapses in federal funding — enough to cover his office’s estimates. But the challenge, he and other leaders said, is that would put Vermont in a more precarious financial position heading into what is already expected to be a difficult state budget-building process due to increasing costs and other cuts to federal revenue.
Legislative leaders have started warning their colleagues that some existing state programs could need to be scaled back or cut during the upcoming legislative session, which starts in January.
Thursday’s discussion also comes as the Trump administration has threatened to withhold back pay from tens of thousands of federal workers who are furloughed during the shutdown after it ends — despite a 2019 law requiring payment, which Trump signed that year.
This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.