Vermont

Vermont

Budget Links

FY2026 (proposed)
FY2025 (enacted)
FY2024 (enacted)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)

Proposed Budget - Fiscal Year 2026

On January 28, Vermont Governor Phil Scott released a proposed budget for fiscal 2026, calling for total spending from all funds of $9.04 billion, a 2.4 percent increase from fiscal 2025 levels. General fund appropriations are recommended at $2.43 billion, a 4.4 percent increase compared to adjusted spending levels for fiscal 2025.  The budget also recommends education fund appropriations totaling $2.42 billion, a 4.7 percent increase over fiscal 2025 adjusted levels. The budget is based on forecasted base general fund revenue of $2.49 billion after direct applications, reversions, transfers, and policy changes. The budget allocates the projected operating surplus of $67 million to various fund transfers. Total general fund reserves, including the Budget Stabilization Reserve, Human Services Caseload Reserve, 27/53 Reserve, and GF Balance Reserve, are projected at $329 million in fiscal 2026, or about 13.6 percent as a share of recommended general fund appropriations.

Proposed Budget Highlights 

The governor’s fiscal 2026 budget continues the state’s historic investments in housing and community revitalization, while also enhancing Continuum of Care initiatives. Other budget priorities include supporting a significant transformation of the public education system and mitigating the affordability crisis through tax relief measures. Additionally, the governor’s recommendation fully funds all state retirement and debt service obligations while maintaining statutory reserve requirements and taking steps to promote long-term fiscal sustainability.

Housing and Community Revitalization

• Base funding for the Manufactured Home Improvement and Repair Program (MHIR) to help with project costs for owner-occupied manufactured homes
  
• Base funding for the Vermont Housing Improvement Program (VHIP) to bring vacant rental units up to code and add new units
  
• Adds funds to the Vermont Bond Bank for the new Vermont Infrastructure Sustainability Fund (VISF) to support municipal infrastructure projects
  
• Directs funds to the Vermont Housing Finance Agency (VHFA) Rental Revolving Loan Fund to incentivize developers to create and preserve rental units for middle income households 
  
• Funding to the VHFA Middle Income Homeownership Development Program to construct and rehabilitate affordable housing
  
• Increases the annual cap on Downtown and Village Center Tax Credits

Continuum of Care Enhancements

• Directs funds to build and operate a recovery campus for justice involved individuals
  
• Continues the emergency housing (hotel/motel) program for the unhoused
  
• Base funds for the Housing Opportunity Program to provide emergency shelter services and provides additional funding to expand emergency shelter bed capacity

Education

• Transfers funds from general fund to education fund to stabilize education tax rates by eliminating projected property tax increase this year
  
• Sends funds to the education agency to provide them the resources to assist local school districts and boards with transformational efforts such as administrative restructuring, financial and budgeting support, and more

Affordability

• Provides a full income tax exemption on military pension income
  
• Expands the Child Tax Credit for income eligible families with children up to age 6
  
• Increases the percentage of the “childless” Earned Income Tax Credit from 38 percent to 100 percent of the federal amount
  
• Increases the Social Security income tax exemption 

Good Government

• General funds to bridge the transition away from “fee for service” medical care to a “Global Payment” program
  
• Resources to modernize state employee classification and compensation system
  
• Provides the last payment in a five-year commitment to help state colleges transform into a unified university
  
• Funding for the Municipal Technical Assistance Program, which helps rural communities with limited capacity apply for federal and state funds to help with flood recovery and other pressing needs

Proposed Budget Information
Fiscal Year 2026 Budget Proposal 

Executive Budget Summary 

Governor’s Press Release & Budget Address 

Revenue Forecast (January 2025)