Gov. Phil Scott speaks after a meeting at the Statehouse in Montpelier on November 13, 2025. Photo by Glenn Russell/VTDigger Republican Gov. Phil Scott approved lawmakers’ midyear budget tuneup Thursday, signing their updated plan to increase state spending for the remainder of the fiscal year by more than $111 million over the original budget.  Potential federal funding shortfalls continued to cast a shadow over lawmakers’ budget decisions for this year, with their review of state finances coming about four months after the state spent millions to temporarily provide Vermonters with food stamps.  Though the state covered the food assistance costs using millions of dollars it had set aside, the episode emphasized for lawmakers the reality that gaps in federal funds are possible. Lawmakers usually pass a spending package during the beginning of each legislative session to tweak how state funds are spent about halfway through the fiscal year, which ends on June 30 — though in some years those tweaks become highly controversial.  This year lawmakers decided not to spar with the governor. “This is pretty clean, as they say,” said Sen. Andrew Perchlik, D/P-Washington, chair of the Senate Appropriations Committee. Economists reported earlier this year that the state’s revenue was steady and would bring in $80.6 million more to the state’s general fund than predicted when lawmakers originally drafted the current fiscal year’s budget.  Since the Legislature gaveled in for the year, Scott has pushed lawmakers to set aside $74.9 million to buy down property taxes across the state, which were projected to increase nearly 12% on average.  But lawmakers were hesitant to decisively agree to Scott’s proposal, anticipating more funding cuts to federal programs.  Under the law, the excess revenue can be used to address property tax relief — but it can also be used to address federal funding shortfalls “or any other uses determined to be in the best interests of the public.”  “We, the Legislature, didn’t want to tie our hands so much at this point,” Perchlik said. Instead, lawmakers wanted to hedge for the possibility they might need the money for other priorities. Legislators will have to hash out the details when considering next fiscal year’s budget.  Senators in Perchlick’s committee also tried to make a tentative safety net in the event that federal dollars don’t provide enough affordable housing vouchers in Vermont.  When lawmakers in the House Appropriations Committee drafted the budget adjustment bill, they originally designated $50 million in state dollars set to be doled out directly to housing authorities throughout the state. Perchlik said that representatives decided to allocate those funds because it looked like the U.S. Department of Housing and Urban Development, which gives money to affordable-housing authorities in Vermont, would receive cuts to its funds.  But once the bill made it through Perchlik’s committee in the Senate, it was clear that Congress was going to fully fund the federal department, Perchlik said.  When members of the appropriations committees in both Vermont’s House and Senate sat down together, they came to an agreement with Scott’s administration they thought would provide a safety net for housing authorities without directly deploying state funds, he said.  Under the law, housing authorities are still given $50 million in state funds for housing vouchers, but they have to go through a process to get it.  In order for a housing authority to get state dollars for vouchers, it has to submit an application with the Department for Children and Families demonstrating that federal funds aren’t meeting its needs. Then, the department can go to economists and ask them to pull from the $50 million in the state’s general fund.  Among other changes is a $34 million increase in spending on Vermonters’ Medicaid plans. That adjustment is based on changes in how many Vermonters are enrolling in Medicaid and the types of services they’re billing, according to Sarah Clark, secretary of the Agency of Administration.  The law also directs spending to cover costs across the criminal justice system. Under the adjusted budget, the state will spend $870,000 on overtime pay for Vermont State Police officers and $500,000 on a pilot court model rolled out over the fall and winter in Burlington.  Under the law, Vermont will also spend $4.6 million more on its contract with its prison health care provider, Wellpath. The cost increase in the health care contract comes as a result of an increase in the average daily number of people held in the state’s prisons. Read the story on VTDigger here: Gov. Scott signs Vermont’s midyear budget increase of $111 million. ...read more read less