Montpelier, VT – Vermont โHouse budget writers are preparing for difficult spendingโ decisions as potential federal funding cuts loom, according to a recent analysis.โข Economists warn that โprojected revenueโ increases will likely be insufficient to cover rising state employee costs and otherโค fixed expenses,potentiallyโฃ leading to adjustments โฃin state programs andโ services.
The analysis,โข conducted by state economists Scheu and Harrison, highlights โuncertainty surrounding the impacts of a recently โฃpassed federal spending package and former President โขTrump’s โคtariffs. While the full Legislature is unlikely to reconvene this year due to the delayed โimplementation of many federalโ changes – โsome not taking โคeffect until โ2026 -โ lawmakersโ have built-in triggers for a special sessionโ should federal cutsโ exceedโ predetermined thresholds. Those thresholds currentlyโค appear unlikely to beโ met.
“Don’t โฃget cozy,” cautionedโ economist Tom Kavet in July, underscoring the evolving financialโ landscape. The economists noted that even without drastic cuts, the state faces a budgetary squeeze due to increasing costs. they wrote that projected โrevenue โขgrowth “won’t be โคenoughโ to cover โprojected increases in salaries and benefits for state employeesโ and a myriad of โฃother fixed โฃcosts,” signalingโ “we can probably โexpect some adjustments to programs and โคservices.”
The Scott governance is currently developing its proposedโ budget plan for the next fiscal year, with a balanced budget expected to โbeโฃ deliveredโ to the Legislature in January. Press Secretary Amanda โฃWheeler stated the administrationโ is still assessing potential impactsโ to existing programs.Lawmakers proactively included measures in the current fiscalโข year’s budget, approved in May, that would automatically convene a special legislative session if federal โfunding reductions โreach specific levels. though,Scheu and Harrison believeโข those levels won’t be triggered in theโ immediate future.
