Leaders of Vermont’s House Appropriations Committee have warned colleagues that next year’s state budget-building process could be among the most difficult in recent memory — potentially forcing some existing programs onto the chopping block — as lawmakers grapple with sweeping federal funding cuts in President Donald Trump’s tax and spending law.
“We expect the upcoming state budget cycle to present a number of challenges that most of us have not experienced as legislators before due to uncertainty in the economic forecast and changes in the federal budget,” wrote Rep. Robin Scheu, D-Middlebury, and Rep. Jim Harrison, R-Chittenden, in a memo to the full House last month. Scheu is the committee’s chair; Harrison is its vice chair.
Moreover, the leaders of the powerful budget-writing panel wrote, “We may need to ask policy committees to review existing programs to see if there are any that can be scaled back or may no longer be the priority they once were.”
The House’s “policy committees” focus on specific areas of law, such as education, health care or transportation. The Appropriations Committee, which oversees state spending, and the House Ways and Means Committee, which writes tax policy, are known as the chamber’s two “money committees.”
The memo, which was shared with VTDigger, was part of an email House Speaker Jill Krowinski, D-Burlington, sent to all 150 House members on Aug. 11. Krowinski’s email included a handful of other summertime updates for her colleagues, who adjourned their 2025 session in mid-June and are slated to come back to the Statehouse for the 2026 session in January.
Harrison described the intent of his and Scheu’s message during a panel of top Vermont Republican leaders Thursday night in Ludlow.
“One, the message was, don’t think of new ways to spend the money, even though there are a lot of them,” he said. “And two, we need you to start thinking about, what are the programs that we have that may have been a good idea and served a good purpose 20 years ago, but maybe aren’t as important today as something else — like health care.”
Citing projections economists shared with legislative leaders and Gov. Phil Scott in late July, Scheu and Harrison wrote that state revenues are expected to increase by about $61 million during the state’s 2027 fiscal year. That’s the time period, running from July 2026 to June 2027, for which lawmakers will be creating a new state budget starting in January.
While that revenue upgrade is good news, Scheu and Harrison wrote, it won’t be enough to cover projected increases in salaries and benefits for state employees and “a myriad of other fixed costs,” they wrote, meaning “we can probably expect some adjustments to programs and services” to make up the difference.
The economists also cautioned that their projections could need to be revisited because of uncertainty over the impacts of both the GOP-led federal spending package and Trump’s tariffs.
“Don’t get comfortable,” Tom Kavet, one of the state’s economists, said in July.
It’s unlikely, however, that the full Legislature will need to meet again this year to respond to losses in federal funding, Scheu and Harrison wrote. That’s because many of the changes included in Trump’s “One Big Beautiful Bill” do not take effect until 2026, or later, the legislators said. That includes certain cuts to Medicaid and access to federal nutritional assistance, among others.
Lawmakers added several measures into the state budget bill for the current fiscal year, which they approved in May, that would trigger a special legislative session if federal funding cuts reached certain thresholds. But those thresholds are unlikely to be hit just yet, according to Scheu and Harrison.
Before legislators start work on the state budget next year, they will first get a proposed spending plan from the Scott administration. In an email Friday, Scott’s press secretary, Amanda Wheeler, said the administration was still too early in its budget development process to say whether any existing state programs might see significant cuts.
“We’ll review all funding impacts and deliver a balanced budget to the Legislature in January,” she said.
