MONTPELIER — The Vermont Senate on Thursday passed its proposed state budget for the 2026 fiscal year, which starts in July.
The plan includes more state spending than in the version approved by the House, or that was presented by Gov. Phil Scott, earlier this year — though Senate leaders say they expect their proposal to soon get whittled down.
The budget bill, H.493, now heads to a joint committee of legislative leaders to hash out their differences, which include, among others, how the state should pay for certain child care subsidies. After that, the full House and Senate would vote on the joint panel’s changes, before a compromise budget bill would go to Scott for his consideration.
Sen. Andrew Perchlik, a Washington County Democrat who chairs the powerful Senate Appropriations Committee, said he wants to avoid a showdown with the governor over state spending in the final weeks of the legislative session, while lawmakers are also attempting to make sweeping changes to Vermont’s school governance and finance systems.
“We’re going to have a long session because of the education bill — we don’t want to, also, go longer because of a veto of the budget. So, we’re working with the governor’s folks to see how we can move closer in his direction,” Perchlik told reporters at the Statehouse on Wednesday. “We definitely want the governor to be supportive.”
Scott, for his part, has already criticized legislators’ budget proposals in recent weeks for exceeding, in some areas, the spending he proposed to them in late January. Overall, the budget senators approved Thursday totals $9.01 billion, while the Republican governor’s proposal totaled $8.99 billion.
Last year, Scott’s repeated criticism of spending approved by the Democratic-controlled Legislature paid political dividends after a historic number of seats in both chambers flipped toward the GOP in November’s election. As a result, Democrats no longer have enough seats in each chamber to override a budget veto, as they did in 2023.
“I do expect — and, Vermonters expect — that legislators will work with us to find common ground,” Scott told reporters last week at one of his regular Statehouse press conferences. “Instead, I’m concerned.”
As it stands, the Senate’s 2026 budget would add about $50 million more to the state’s “base” spending — money expected to fund recurring expenses year-over-year — than Scott proposed, and about $25 million more in base spending than the House added.
That spending includes a dozen new state government positions that Scott didn’t propose in January, including at the Vermont Labor Relations Board, the Green Mountain Care Board and a position at the Attorney General’s Office to support the state’s legal challenges to President Donald Trump’s administration, according to Perchlik.
Scott’s Secretary of Administration, Sarah Clark, said at the press conference last week that the number of positions in the Senate’s budget was, also, too high. She argued the chamber would be creating too many future spending obligations at a time the state is facing deep uncertainty over potential actions by the federal government.
Sen. Robert Norris, R-Franklin, said on the floor Wednesday that there were far more requests for new state positions than the Senate Appropriations Committee chose to put in the budget — and some state entities “made out better than others.” When the budget was up for final approval Thursday, Norris voted for it, as did the panel’s two other GOP members.
Perchlik said on the floor Wednesday, before the budget bill won initial approval, that, overall, he thought his committee developed “a balanced budget that we thought was good for Vermonters and put us on a stable financial path for the future.” Still, he told reporters that he expects some of the Senate’s proposed positions will be cut in the upcoming conference committee process.
Several GOP senators echoed Scott’s concerns over the amount of spending in the budget bill ahead of the final vote Thursday. The vote was also preceded by attempts by Senate Minority Leader Scott Beck, R-Caledonia, to insert measures into the budget bill to make changes to existing state laws aimed at combating climate change.
Perchlik and Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, raised objections on two separate occasions to the chamber considering Beck’s amendments, saying the proposals were not relevant to the budget debate. Lt. Gov. John Rodgers, who presides over the Senate, ruled in agreement both times, saying that Beck’s proposals were not “germane” to the legislation on the floor.
Beck moved twice to suspend the chamber’s rules so the amendments could be taken up, regardless of Rodgers’ ruling. But senators rejected both of those motions.
Senators then voted 20-10 to pass the budget, overall, with Beck and several other GOP senators backing it. Sen. Ruth Hardy, D-Addison, voted against it, after telling her colleagues that she didn’t think the bill adequately prepared the state, or some social services providers, for potential cuts to federal spending. Sen. Tanya Vyhovsky, a Chittenden Central Progressive/Democrat, also voted against the legislation.
Perchlik, on the floor, pointed to a measure in the budget that would set aside some future state revenue — an estimated $45 million — to plug federal funding gaps.
The Senate’s budget also includes funding for some of the measures that were in this year’s annual “budget adjustment” legislation that the House and Senate passed, versions of which were then twice vetoed by Scott, including flood recovery grants to certain municipalities and funding for county courthouse upgrades.
A large part of the Senate’s proposed spending increase — $19 million — comes from a push to continue drawing on the state’s general fund to support subsidies to families paying for child care. Scott had proposed reducing the general fund appropriation for that purpose by $19 million, after a payroll tax set up to support the subsidies brought in more money than the state expected, while at the same time, the program’s uptake was lower than expected.
The House backed Scott’s proposal, which had drawn criticism from advocates for the state’s child care providers. Defending the Senate Appropriations Committee’s move on the floor, Baruth said he thought Scott’s, and the House’s, proposal “could create a tradition, or a practice, of slowly reducing the amount of general fund money — and that could destabilize the program, in our opinion.”
The Senate’s budget also proposed setting aside an additional $10 million under a proposed new state framework for providing emergency housing. The money is tied to a bill that cleared the House last month and provides a potential off-ramp to the state’s mass use of motels as a primary form of shelter, among other measures.
The bill, H.91, is now being reviewed by the Senate Health and Welfare Committee. Scott’s administration is opposed to putting any more money into the budget for the motel voucher program than it first proposed in January, Clark, Scott’s secretary of administration, said last week during the governor’s press conference.
Another sticking point in budget negotiations could be the specific programs the budget funds to support new housing construction, and to what extent. For instance, legislators have earmarked more money for the independent Vermont Housing and Conservation Board than Scott proposed — but the governor wants more money for certain programs run by the Vermont Housing Finance Agency than, for instance, the House approved.
The House and Senate proposed different spending for some housing programs from each other, too, something legislators said will feature in the conference committee negotiations. The committee could convene as soon as Friday, according to Baruth’s chief of staff, Ashley Moore.
On the floor Thursday, Baruth also echoed Perchlik’s comments to reporters the day before.
“It is impossible to predict what will come out of a conference committee — but if I had to predict, I would say that what we will see would be fewer positions and slightly less spending,” he said. “That would be my guess, based on conversations with people on both sides of the building — and understanding (Scott’s) position on this.”