The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 005: Budget

• § 301. Department estimate and statement

  (a) The head of every department of State, board, or commission, and any officer or individual having in charge any State activity for which funds are appropriated by the General Assembly, on or before September 1 preceding each biennium, shall file with the Commissioner of Finance and Management, upon forms prepared and furnished by the Commissioner of Finance and Management, statements showing in detail the amount appropriated and expended for the current and next preceding fiscal years, and the amount estimated for such activity to be necessary for the ensuing two fiscal years, properly arranged in detail by classification and summaries. Requests for items for any activity, purpose, or program not previously authorized by legislation shall not be included in those statements but shall be clearly stated on separate accompanying forms.

  (b) Such statements shall also include an itemized account of the revenues of the State for the current fiscal year to date, the last two preceding fiscal years, and the estimated revenues for the ensuing two fiscal years, all in such manner and form as to show comparatively the revenues and expenditures of each of the periods so tabulated, with the ensuing two fiscal years.

  (c) If any State department or agency fails to transmit the program and financial information provided under subsections (a) and (b) of this section on or before the specified date, the Agency of Administration may prepare that information with the same effect as if it had been prepared by the proper State department or agency. (Amended 1959, No. 328 (Adj. Sess.), § 4(a); 1965, No. 108; 1969, No. 14, No. 75, § 2; 1973, No. 144 (Adj. Sess.), § 2, eff. July 1, 1974; 1987, No. 243 (Adj. Sess.), § 57, eff. June 13, 1988.)

• § 302. Tabulation of estimates and statements

  On or before November 15 preceding each biennium, the Commissioner of Finance and Management and the Secretary of Administration shall deliver to the Governor and to the Governor-elect, if they so request, statements of State accounts setting forth in tabulated form all appropriations and expenditures for the current fiscal year, all appropriations and expenditures for all State purposes for the last four preceding fiscal years, estimates of all claims against the State, and all expenditures from the State Treasury authorized by law, together with the estimates filed with them for the ensuing two fiscal years, under the provisions of subsection 301(a) of this title. (Amended 1959, No. 328 (Adj. Sess.), § 4(b); 1969, No. 75, § 3; 1971, No. 24; 1973, No. 144 (Adj. Sess.), § 3, eff. July 1, 1974.)

• § 303. Delivery of estimates and statements when no Governor elected by popular vote

  In the event of no election of Governor by the voters at the November election, the Secretary of Administration shall deliver the statements and estimates provided for under this chapter to the person elected Governor by the General Assembly. (Amended 1959, No. 328 (Adj. Sess.), § 4(c); 2021, No. 105 (Adj. Sess.), § 440, eff. July 1, 2022.)

• § 304. Preparation of budget

  (a) Upon receiving from the Secretary of Administration the statements and estimates as provided in this chapter, the Governor-elect shall immediately thereafter study and review the same and shall make such investigations as may be necessary to enable him or her to prepare a budget setting forth such recommendations as he or she may determine.

  (b) The Secretary of Administration shall furnish the Governor-elect with complete information relative to the finances of the State and shall render such assistance as requested in preparation of the budget. (Amended 1959, No. 328 (Adj. Sess.), § 4(d).)

• § 305. Power to revise estimates

  In making up the budget, the Governor-elect shall have the power to revise, increase, decrease, or eliminate the sum estimated to be needed for or by each activity hereinbefore referred to and shall include in the message dealing with the budget, as provided in section 306 of this title, the reasons for the Governor-elect’s action. (Amended 2021, No. 105 (Adj. Sess.), § 441, eff. July 1, 2022.)

• § 305a. Official State revenue estimate

  (a) On or about January 15 and again by July 31 of each year, and at such other times as the Emergency Board or the Governor deems proper, the Joint Fiscal Office and the Secretary of Administration shall provide to the Emergency Board their respective estimates of State revenues in the General, Transportation, Transportation Infrastructure Bond, and Education Funds. The January revenue estimate shall be for the current and next two succeeding fiscal years, and the July revenue estimate shall be for the current and immediately succeeding fiscal years. Federal fund estimates shall be provided at the same times for the current fiscal year.

  (b) Within 10 days of receipt of such estimates, the Board shall determine an official State revenue estimate for deposit in the respective funds for the years covered by the estimates. For the purpose of revising an official revenue estimate only, a majority of the legislative members of the Emergency Board may convene a meeting of the Board.

  (c)(1)(A) The January estimates shall include estimated caseloads and estimated per-member per-month expenditures for the current and next succeeding fiscal years for each Medicaid enrollment group as defined by the Agency and the Joint Fiscal Office for State Health Care Assistance Programs or premium assistance programs supported by the Global Commitment Fund and for the programs under any Medicaid Section 1115 waiver.

  (B) For Board consideration, there shall be provided three versions of the next succeeding fiscal year’s estimated per-member per-month expenditures:

  (i) one version shall include inflation trends as set forth in subdivision 307(d)(5) of this title;

  (ii) one version shall be without the inflationary adjustment; and

  (iii) one version shall reflect any additional increase or decrease to Medicaid provider reimbursements that would be necessary to attain Medicare levels as set forth in subdivision 307(d)(6) of this title.

  (C) For VPharm, the January estimates shall include estimated caseloads and estimated per-member per-month expenditures for the current and next succeeding fiscal years by income category.

  (D) The January estimates shall include the expenditures for the current and next succeeding fiscal years for the Medicare Part D phased-down State contribution payment and for the disproportionate share hospital payments.

  (2) In July, the Administration and the Joint Fiscal Office shall make a report to the Emergency Board on the most recently ended fiscal year for all Medicaid and Medicaid-related programs, including caseload and expenditure information for each Medicaid eligibility group. Based on this report, the Emergency Board may adopt revised estimates for the current fiscal year and estimates for the next succeeding fiscal year. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. (Added 1995, No. 178 (Adj. Sess.), § 282; amended 1997, No. 60, § 19, eff. July 1, 1998; 2001, No. 142 (Adj. Sess.), § 148c; 2005, No. 6, § 87, eff. March 26, 2005; 2005, No. 191 (Adj. Sess.), § 46; 2005, No. 215 (Adj. Sess.), § 315; 2007, No. 65, § 268; 2007, No. 192 (Adj. Sess.), § 6.010; 2009, No. 4, § 93, eff. April 29, 2009; 2009, No. 67 (Adj. Sess.), § 106, eff. February 25, 2010; 2011, No. 3, § 88, eff. Feb. 17, 2011; 2011, No. 75 (Adj. Sess.), § 108; 2013, No. 50, §§ E.106, E.306; 2017, No. 154 (Adj. Sess.), § 31, eff. May 21, 2018; 2017, No. 167 (Adj. Sess.), § 15, eff. May 22, 2018; 2019, No. 6, § 69, eff. April 22, 2019.)

• § 305b. Education property tax increment; Emergency Board estimate

  Annually, at the January meeting of the Emergency Board held pursuant to section 305a of this title, the Joint Fiscal Office and the Secretary of Administration shall provide to the Emergency Board a consensus estimate of the impact on the Education Fund resulting from tax increment financing districts authorized pursuant to 24 V.S.A. chapter 53 and section 5404a of this title. The estimate shall be for the succeeding fiscal year. The Emergency Board shall adopt an official estimate of the impact on the Education Fund at the January meeting. (Added 2017, No. 73, § 11a, eff. June 13, 2017.)

• § 306. Budget report

  (a) The Governor shall submit to the General Assembly, not later than the third Tuesday of every annual session, a budget that shall embody his or her estimates, requests, and recommendations for appropriations or other authorizations for expenditures from the State Treasury. In the first year of the biennium, the budget shall relate to the two succeeding fiscal years. In the second year of the biennium, it shall relate to the succeeding fiscal year. The budget shall be based upon the official State revenue estimates, including the Medicaid estimated caseloads and per-member per-month expenditures, adopted by the Emergency Board pursuant to section 305a of this title.

  (1) As part of the budget report, the Governor shall:

  (A) develop and publish annually for public review a current services budget, providing the public with an estimate of what the current level of services is projected to cost in the next fiscal year;

  (B) provide an estimated cost of deferred infrastructure maintenance in the State’s transportation system; and

  (C) itemize current services liabilities, including the total obligations and the amount estimated for full funding in the current year in which an amortization schedule exists. These shall include the following liabilities projected for the start of the budget fiscal year:

  (i) pension liabilities for the Vermont State Employees’ Retirement System (VSERS) and the Vermont State Teachers’ Retirement System (VSTRS) and other postemployment benefit liabilities under current law and relevant Government Accounting Standards Board standards for these systems;

  (ii) child care fee scale funding requirements pursuant to 33 V.S.A. § 3512 to bring total year funding to current market rates and current federal poverty levels;

  (iii) Reach Up funding full benefit obligations, including the standard of need for the current fiscal year, prior to any rateable reductions made pursuant to 33 V.S.A. § 1103(a), which ensure that the expenditures for the programs shall not exceed appropriations;

  (iv) statutory funding levels from the Property Transfer Tax;

  (v) projected fund liabilities of the funds identified in the “Notes” section of the most recent Comprehensive Annual Financial Report (CAFR), including the Workers’ Compensation Fund, the State Liability Insurance Fund, the Medical Insurance Fund, and the Dental Insurance Fund; and

  (vi) a summary of other nonmajor enterprise funds and internal service funds where deficits exist in excess of $1,500,000.00.

  (2) The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection.

  (b) The Governor shall also submit to the General Assembly, not later than the third Tuesday of each session of every biennium, a tax expenditure budget that shall embody his or her estimates, requests, and recommendations. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. The tax expenditure budget shall be divided into three parts and made as follows:

  (1) A budget covering tax expenditures related to nonprofits and charitable organizations and covering miscellaneous expenditures shall be made by the third Tuesday of the legislative session beginning in January 2012 and every three years thereafter.

  (2) A budget covering tax expenditures related to economic development, including business, investment, and energy, shall be made by the third Tuesday of the legislative session beginning in January 2013 and every three years thereafter.

  (3) A budget covering tax expenditures made in furtherance of Vermont’s human services, including tax expenditures affecting veterans, shall be made by the third Tuesday of the legislative session beginning in January 2014 and every three years thereafter.

  (c) The tax expenditure budget shall be provided to the House Committee on Ways and Means and the Senate Committee on Finance, which Committees shall review the tax expenditure budget and shall report their recommendations in bill form.

  (d) The Governor shall develop a process for public participation in the development of budget goals, as well as general prioritization and evaluation of spending and revenue initiatives. (Amended 1969, No. 75, § 4; 1973, No. 144 (Adj. Sess.), § 4; 1974; 1987, No. 243 (Adj. Sess.), § 58, eff. June 13, 1988; 2009, No. 1 (Sp. Sess.), § H.16, eff. June 2, 2009; 2011, No. 45, § 36j, eff. May 24, 2011; 2013, No. 142 (Adj. Sess.), § 56; 2015 No. 172 (Adj. Sess.), § E.100.7; 2017, No. 85, § C.117, eff. June 28, 2017; 2019, No. 72, § E.124.)

• § 306a. Purpose of the State budget

  (a) The State budget, consistent with Chapter I, Article 7 of Vermont’s Constitution, should “be instituted for the common benefit, protection, and security of the people, nation, or community . . .” The State budget should be designed to address the needs of the people of Vermont in a way that advances human dignity and equity and in a manner that supports the population-level outcomes set forth in 3 V.S.A. § 2311.

  (b) Spending and revenue policies will seek to promote economic well-being among the people of Vermont and foster a vibrant economy. Integral to achieving the purpose of the State budget is continuous evaluation of the use of public funds by systems of outcome measurement based on indicators that measure success in accomplishing the purposes of the State budget.

  (c) Spending and revenue policies will reflect the public policy goals established in State law and recognize every person’s need for health, housing, dignified work, education, food, social security, and a healthy environment.

  (d) As consistent with State law and in conjunction with the federal government, the budget will reflect support for economic development, public safety, transportation, and other infrastructure needs.

  (e) Revenue measures shall also be based on the principles of sustainability and stability. The Administration shall develop budget and revenue proposals as part of a transparent and accountable process with direct and meaningful participation from Vermont residents. (Added 2011, No. 162 (Adj. Sess.), § E.100.1; amended 2015, No. 11, § 32; 2019, No. 131 (Adj. Sess.), § 291.)

• § 307. Form of budget

  (a) The budget shall be arranged and classified so as to show separately the following estimates and recommendations:

  (1) expenses of State administration;

  (2) deficiencies, overdrafts, and unexpended balances in appropriations of former years;

  (3) bonded debt, loans, and interest charges;

  (4) all requests and proposals for expenditures for new projects, new construction, additions, improvements, and other capital outlay; and

  (5) with respect to the tax expenditure budget required under subsection 306(b) of this chapter, all requests and proposals for new, amended, or continued tax expenditures as defined in section 312 of this chapter.

  (b) The budget shall also include in detail definite recommendations of the Governor relative to the amounts that should be appropriated to each of the activities referred to under this section. It shall also include definite recommendations of the Governor relative to the financing of the expenditures recommended and the appropriate amounts to be raised from ordinary revenue, direct taxes, bonds, or loans. The financing of the expenditures recommended, as proposed by the Governor, shall not include the funds from the Budget Stabilization Reserve as established in section 308 of this title. With the budget, the Governor shall submit to the General Assembly such messages, statements, or supplemental data with reference to the same, as the Governor may deem expedient; however, budget documentation shall include to the extent possible the following:

  (1) Specific sources of receipts. In the event of special fund appropriations, the particular special fund sources shall be itemized.

  (2) Interdepartmental transfers shall be explained, including the source department of said transfer.

  (3) Changes in positions within departmental budgets, including prior year, current year, and requested budget year positions counts by title and category. Positions should be identified as to whether they are filled and unfilled.

  (4) A document outlining proposed changes in program funding and related policy changes that they reflect. This summary shall include narrative description of the proposed changes.

  (c) The budget shall also include a strategic plan for each State agency, department, office, or other entity or program. A strategic plan shall include the following:

  (1) a statement of mission and goals that support the relevant population-level outcomes set forth in 3 V.S.A. § 2311;

  (2) a description of program performance measures used to demonstrate output and results;

  (3) identification of the groups of people served, including those having service priorities or other service measures established by law, and estimates of the changes in those groups expected during the term of the plan;

  (4) an analysis of the use of resources to meet needs, including future needs, an analysis of additional resources that may be necessary to meet future needs;

  (5) an analysis of expected changes in the services provided by that agency because of changes in State or federal law;

  (6) a description of the means and strategies for meeting needs of the agency or program, including future needs and achieving the goals under which the agency or program provides services;

  (7) a description of the capital improvement needs of the agency during the period covered by the plan;

  (8) a prioritization, if appropriate, of the capital investment needs of the agency or program during the period covered by the plan; and

  (9) any other information that may be required.

  (d) The Governor’s budget shall include his or her recommendations for an annual budget for Medicaid and all other health care assistance programs administered by the Agency of Human Services. The Governor’s proposed Medicaid budget shall include a proposed annual financial plan, and a proposed five-year financial plan, with the following information and analysis:

  (1) anticipated revenues;

  (2) anticipated expenditures, including anticipated per-member per-month expenditures for each population category eligible for health care assistance;

  (3) anticipated caseloads, including anticipated caseloads for each population category eligible for health care assistance;

  (4) anticipated utilization;

  (5) health care inflation trends that reflect consideration of provider reimbursements approved under 18 V.S.A. § 9376 and expenditure trends reported under 18 V.S.A. § 9383;

  (6) recommendations for funding provider reimbursement at levels sufficient to ensure reasonable access to care, and at levels at least equal to Medicare reimbursement;

  (7) recommendations relating to Medicaid and other program eligibility, the benefit plan, cost-sharing, utilization controls, reimbursement, and any other matter necessary to align anticipated expenditures and revenues; and

  (8) any other recommendations or information affecting the financial sustainability of Medicaid and all other health care assistance programs administered by the Agency of Human Services.

  (e) The budget shall also include any proposed expenditures and charges for enterprise and internal service funds to be billed to departmental budgets. Expenditures from enterprise and internal service funds shall be managed in accordance with subsection 462(b) of this title. (Amended 1987, No. 114, § 1, eff. June 29, 1987; 1993, No. 210 (Adj. Sess.), § 281; 2001, No. 142 (Adj. Sess.), § 148d; 2003, No. 66, §§ 298, 299; 2003, No. 122 (Adj. Sess.), § 10, eff. June 10, 2004; 2005, No. 174 (Adj. Sess.), § 61; 2009, No. 1 (Sp. Sess.), § H.17, eff. June 2, 2009; 2011, No. 63, § E.103.1; 2013, No. 50, § E.306.1; 2013, No. 179 (Adj. Sess.), § E.306; 2015, No. 11, § 33; 2017, No. 167 (Adj. Sess.), § 16, eff. May 22, 2018; 2021, No. 105 (Adj. Sess.), § 442, eff. July 1, 2022.)

• § 308. General Fund Budget Stabilization Reserve; creation and purpose

  (a) It is the purpose of this section to reduce the effects of annual variations in State revenues upon the General Fund budget of the State by reserving certain surpluses in General Fund revenues that may accrue for the purpose of offsetting deficits or reducing General Fund bonds.

  (b) There is hereby created a General Fund Budget Stabilization Reserve determined on a budgetary basis and administered by the Commissioner of Finance and Management. Any budgetary basis undesignated General Fund surplus occurring at the close of a fiscal year shall be reserved within the General Fund Budget Stabilization Reserve, provided that the balance reserved shall not exceed five percent of the appropriations from the General Fund for the prior fiscal year, and any additional amounts as may be authorized by the General Assembly. Any undesignated General Fund surplus remaining after the General Fund Budget Stabilization Reserve has been brought to the maximum authorized level shall remain in the General Fund. When the General Assembly next meets, it may specifically appropriate the use of the undesignated General Fund surplus for the reduction of General Fund bonds authorized but yet to be issued by the Treasurer, a reduction of revenues, or for other needs as the General Assembly may determine.

  (c) In any fiscal year, if the General Fund is found to have an undesignated fund deficit, the General Fund Budget Stabilization Reserve shall be used by the Commissioner of Finance and Management to the extent necessary to offset the undesignated fund deficit as determined by Generally Accepted Accounting Principles.

  (d) Determination of the amount of the undesignated General Fund surplus or fund deficit in any fiscal year for the purposes of this section shall be made by the Commissioner of Finance and Management. Adjustments shall be made to the amounts authorized in subsections (b) and (c) of this section upon receipt of the final audited annual report of the Commissioner of Finance and Management. (Added 1987, No. 114, § 2, eff. June 29, 1987; amended 1991, No. 50, § 284; 1993, No. 25, § 74, eff. May 18, 1993; 1997, No. 61, § 260b.)

• § 308a. Transportation Fund Budget Stabilization Reserve; creation and purpose

  (a) It is the purpose of this section to reduce the effects of annual variations in State revenues upon the Transportation Fund budget of the State by reserving certain surpluses in Transportation Fund revenues that may accrue for the purpose of offsetting deficits or reducing Transportation Fund bonds.

  (b) There is hereby created a Transportation Fund Budget Stabilization Reserve determined on a budgetary basis and administered by the Commissioner of Finance and Management. Any budgetary basis undesignated Transportation Fund surplus occurring at the close of a fiscal year shall be reserved within the Transportation Fund Budget Stabilization Reserve, provided that the balance reserved shall not exceed five percent of the appropriations from the Transportation Fund for the prior fiscal year, and any additional amounts as may be authorized by the General Assembly. Any undesignated Transportation Fund surplus remaining after the Transportation Fund Budget Stabilization Reserve has been brought to the maximum authorized level shall remain in the Transportation Fund. When the General Assembly next meets, it may specifically appropriate the use of the undesignated Transportation Fund surplus for the reduction of Transportation Fund bonds authorized but yet to be issued by the Treasurer, a reduction of revenues, or for other needs as the General Assembly may determine.

  (c) In any fiscal year, if the Transportation Fund is found to have an undesignated fund deficit, the Transportation Fund Budget Stabilization Reserve shall be used by the Commissioner of Finance and Management to the extent necessary to offset the undesignated Transportation Fund deficit as determined by Generally Accepted Accounting Principles.

  (d) Determination of the amount of the undesignated Transportation Fund surplus or Fund deficit in any fiscal year for the purposes of this section shall be made by the Commissioner of Finance and Management. Adjustments shall be made to the amounts authorized in subsections (b) and (c) of this section upon receipt of the final audited annual report of the Commissioner of Finance and Management.

  (e) Commencing in fiscal year 2007, interest earned on funds in the Transportation Fund Budget Stabilization Reserve shall be credited to the Transportation Fund. (Added 1993, No. 25, § 75, eff. May 18, 1993; amended 1997, No. 61, § 260c; 2005, No. 80, § 62.)

• § 308b. Human Services Caseload Reserve

  (a) There is created within the General Fund a Human Services Caseload Reserve. Expenditures from the Reserve shall be subject to an appropriation by the General Assembly or approval by the Emergency Board. Expenditures from the Reserve shall be limited to Agency of Human Services caseload-related needs primarily in the Departments for Children and Families, of Health, of Mental Health, of Disabilities, Aging, and Independent Living, of Vermont Health Access, and settlement costs associated with managing the Global Commitment waiver.

  (b) The Secretary of Administration may transfer to the Human Services Caseload Reserve any General Fund carry-forward directly attributable to Agency of Human Services caseload reductions and the effective management of related federal receipts, with the exclusion of the Department of Corrections.

  (c) The Human Services Caseload Reserve shall contain two sub-accounts:

  (1) A sub-account for incurred but not reported Medicaid expenses. Each year beginning with fiscal year 2020, the Department of Finance and Management shall adjust the amount reserved for incurred but not reported Medicaid expenses to equal the amount specified in the Comprehensive Annual Financial Report for the fiscal year occurring two years prior for the estimated amount of incurred but not reported Medicaid expenses associated with the current Medicaid Global Commitment waiver.

  (2) A sub-account for Medicaid-related pressures related to caseload, utilization, changes in federal participation in existing human services programs, and settlement costs associated with managing the Global Commitment waiver. Any decrease in the amount of required reserves in subdivision (1) of this subsection shall first be reserved in the 27/53 Reserve under section 308e of this title in order to fund the current fiscal year obligation for the next year in which a 53rd week of Medicaid payments is due, next scheduled to occur in fiscal year 2022. The remainder shall result in an offsetting increase in the account for Medicaid-related pressures, as defined in this subdivision (2). Any increase in the amount of required reserve in subdivision (1) of this subsection shall require a corresponding transfer from the funds reserved in this subdivision (2), to the extent there are funds available. (Added 1997, No. 147 (Adj. Sess.), § 119a, eff. April 29, 1998; amended 1999, No. 147 (Adj. Sess.), § 4; 2005, No. 174 (Adj. Sess.), § 62; 2007, No. 15, § 21; 2009, No. 33, § 83(m)(2); 2009, No. 156, (Adj. Sess.), § I.31; 2013, No. 142 (Adj. Sess.), § 97; 2017, No. 3, § 75, eff. March 2, 2017; 2018, No. 11 (Sp. Sess.), § D.105; 2019, No. 72, § D.104; 2019, No. 88 (Adj. Sess.), § 69, eff. March 4, 2020; 2021, No. 105 (Adj. Sess.), § 443, eff. July 1, 2022.)

• § 308c. General Fund and Transportation Fund Balance Reserves

  (a) There is hereby created within the General Fund a General Fund Balance Reserve, also known as the “Rainy Day Reserve.” After satisfying the requirements of section 308 of this title, and after other reserve requirements have been met, any remaining unreserved and undesignated end of fiscal year General Fund surplus shall be reserved in the General Fund Balance Reserve. The General Fund Balance Reserve shall not exceed five percent of the appropriations from the General Fund for the prior fiscal year without legislative authorization.

  (1), (2) [Repealed.]

  (3) Of the funds that would otherwise be reserved in the General Fund Balance Reserve under this subsection, the following amounts shall be reserved as necessary and transferred from the General Fund as follows:

  (A) 25 percent to the Vermont State Retirement Fund established by 3 V.S.A. § 473; and

  (B) 25 percent to the Postretirement Adjustment Allowance Account established in 16 V.S.A. § 1949a.

  (b)(1) The General Assembly may specifically appropriate the use of up to 50 percent of the amounts added in the prior fiscal year from the General Fund Balance Reserve to fund unforeseen or emergency needs.

  (2) If the official State revenue estimates of the Emergency Board for the General Fund, determined under section 305a of this title, have been reduced by two percent or more from the estimates determined and assumed for purposes of the general appropriations act or budget adjustment act, funds in the General Fund Balance Reserve may be appropriated to compensate for a reduction of revenues.

  (c) There is hereby created within the Transportation Fund a Transportation Fund Balance Reserve. After satisfying the requirements of section 308a of this title, and after other reserve requirements have been met, any remaining unreserved and undesignated end of fiscal year Transportation Fund surplus shall be reserved in the Transportation Fund Balance Reserve. Monies from this Reserve shall be available for appropriation by the General Assembly.

  (d) Determination of the amounts of the General Fund and Transportation Fund Balance Reserves shall be made by the Commissioner of Finance and Management and reported, along with the amounts appropriated pursuant to subsection (a) of this section, to the legislative Joint Fiscal Committee at its first meeting following September 1 of each year. (Added 2005, No. 71, § 256; amended 2007, No. 65, § 275; 2009, No. 4, § 96, eff. April 29, 2009; 2011, No. 162 (Adj. Sess.), §§ D.102, D.103.1; 2013, No. 1, § 95, eff. March 7, 2013; 2013, No. 179 (Adj. Sess.), § D.104, eff. June 9, 2014; 2018, No. 11 (Sp. Sess.), § D.107; 2019, No. 6, § 89, eff. April 22, 2019; 2021, No. 105 (Adj. Sess.), § 444, eff. July 1, 2022; 2021, No. 114 (Adj. Sess.), § 29, eff. July 1, 2022.)

• § 308d. Repealed. 2011, No. 162 (Adj. Sess.), § D.103.1(c).

• § 308e. 27/53 Reserve

  (a)(1) There is hereby created within the General Fund the 27/53 Reserve. The purpose of this reserve is to meet the liabilities of the recurring 27th State payroll and the 53rd week of Medicaid payments. These liabilities will be funded by reserving a prorated amount of general funds each year, before the liability comes due.

  (2) Beginning in September 2016 and annually thereafter at the September Joint Fiscal Committee meeting, the Commissioner of Finance and Management shall report on the anticipated liability for the next 27th payroll and 53rd week of Medicaid payments, providing the current reserve balance and a schedule of annual amounts needed to meet the obligation of these payments.

  (b) As part of the Governor’s budget submission under section 306 of this title, the amount prorated for the upcoming fiscal year identified in subdivision (a)(2) of this section shall be included as a budgeted transfer to the 27/53 Reserve.

  (c) In a fiscal year where a 27th State payroll or 53rd week of Medicaid payment is due, the General Assembly shall appropriate the funds from the 27/53 Reserve to meet the expenditures within the year in which these payments are due. (Added 2015, No. 172 (Adj. Sess.), § B.1105.)

• § 309. Capital budget report

  (a) Consolidated capital budget request. In addition to the general operating budget request to be submitted by the Governor to the General Assembly pursuant to this chapter, the Governor shall submit to the General Assembly, not later than the third Tuesday of every annual session, a consolidated capital budget request. In the first year of the biennium, the budget shall relate to the next two fiscal years. In the second year of the biennium, the budget shall relate primarily to the next fiscal year but may request amendments to the current or to previous fiscal years or refer to requests for future fiscal years. The request shall encompass all undertakings that may require State general obligation debt financing, including transportation projects as follows:

  (1) Activities proposed for funding by general obligation debt financing shall be restricted to tangible capital investments, but may include the planning and design directly associated with a tangible capital investment.

  (2) Proposed activities shall be further restricted to those capital expenses allowed under federal laws governing the use of State bond proceeds.

  (3) The capital budget request shall be segmented by the expected functional life of proposed activities, and thus by a corresponding prudent use of either long-term bond issues with a customary 20-year payback period or shorter-term bond issues with a lesser payback period.

  (4) The capital budget shall not include requests for debt financing of State agency operating expenses not directly related to a capital investment as required under this subsection (a). The latter operating expenses shall be accounted for in the Governor’s annual general operating budget request.

  (b) Affordable bond authorization proposal. In the first year of the biennium, the annual capital budget request of the Governor shall include a statement of the total amount of new State tax supported general obligation debt the Governor considers advisable for the General Assembly to authorize for the next two fiscal years, after having considered the maximum amount recommended for the following fiscal year by the Capital Debt Affordability Advisory Committee as provided by chapter 13, subchapter 8 of this title.

  (c) Women employed on State capital construction projects. This State shall encourage an increase in workforce participation rates for women in all aspects of publicly funded capital construction projects for which monies are requested under this section and authorized by the General Assembly in the Capital Construction Act pursuant to section 701a of this title, including projects of the Vermont Housing and Conservation Trust.

  (d) [Repealed.]

  (e) Report duration. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to any report to be made under this section. (Added 1989, No. 258 (Adj. Sess.), § 2; amended 1991, No. 256 (Adj. Sess.), § 31, eff. June 9, 1992; 1993, No. 59, § 21, eff. June 3, 1993; 1999, No. 29, § 42, eff. May 19, 1999; 2009, No. 161 (Adj. Sess.), § 45, eff. June 4, 2010; 2011, No. 40, § 35, eff. May 20, 2011; 2011, No. 104 (Adj. Sess.), § 31, eff. May 7, 2012; 2013, No. 1, § 96, eff. March 7, 2013; 2013, No. 1, § 97, eff. June 30, 2022; 2013, No. 142 (Adj. Sess.), § 57; 2019, No. 14, § 72, eff. April 30, 2019; 2021, No. 105 (Adj. Sess.), § 445, eff. July 1, 2022.)

• § 310. Form of annual capital budget and 10-year capital program plan

  (a) Each biennial capital budget request submitted to the General Assembly shall be accompanied by, and placed in the context of, a 10-year State capital program plan to be prepared, and revised annually, by the Governor and approved by the General Assembly. The 10-year plan shall include a list of all projects that will be recommended for funding in the current and ensuing nine fiscal years. The list shall be prioritized based on need.

  (b) The capital budget request for the following biennium shall be presented as the next increment of the 10-year plan. Elements of the plan shall include:

  (1) Assessment and projection of need.

  (A) Capital needs and projections shall be based upon current and projected statistics on capital inventories and upon State demographic and economic conditions.

  (B) Capital funding shall be categorized as follows:

  (i) State buildings, facilities, land acquisitions, major maintenance, renewable energy sources, and conservation;

  (ii) higher education;

  (iii) aid to municipalities for education, environmental conservation, including water, sewer, and solid waste projects, and other purposes; and

  (iv) transportation facilities.

  (C) Capital needs and projections shall be for the current and the next nine fiscal years, with longer-term projections presented for programs with reasonably predictable longer-term needs.

  (D) Capital needs and projections shall be presented independently of financing requirements or opportunities.

  (E) Capital needs and projections shall include an estimated cost of deferred infrastructure maintenance in State buildings and facilities.

  (2) Comprehensive cost and financing assessment.

  (A) Amounts appropriated and expended for the current fiscal year and for the preceding fiscal year shall be indicated for capital programs and for individual projects. The assessment shall indicate further the source of funds for any project that required additional funding and a description of any authorized projects that were delayed.

  (B) Amounts proposed to be appropriated for the following fiscal year and each of the nine years thereafter shall be indicated for capital programs and for individual projects and shall be revised annually to reflect revised cost estimates and changes made in allocations due to project delays.

  (C) The capital costs of programs and of individual projects, including funds for the development and evaluation of each project, shall be presented in full for the entire period of their development.

  (D) The operating costs, both actual and prospective, of capital programs and of individual projects shall be presented in full for the entire period of their development and expected useful life.

  (E) The financial burden and funding opportunities of programs and of individual projects shall be presented in full, including federal, State, and local government shares, and any private participation.

  (F) Alternative methods of financing capital programs and projects should be described and assessed, including debt financing and use of current revenues. (Added 1989, No. 258 (Adj. Sess.), § 3; amended 2011, No. 104 (Adj. Sess.), § 32, eff. May 7, 2012; 2013, No. 51, § 34; 2019, No. 42, § 26, eff. May 30, 2019.)

• § 311. Retirement funds integrity report

  (a) The Governor shall include, as a part of the annual budget report required by section 306 of this title, a statement of the extent by which the recommended appropriations to the Teachers’ Retirement Funds and to the Vermont Employees’ Retirement Funds differ from the amounts as recommended by the Vermont Employees’ Retirement System Retirement Board as provided by 3 V.S.A. § 471(n) and by the Teachers’ Retirement System Board of trustees as provided by 16 V.S.A. § 1942(r) and Board estimates for current obligations for retiree health care costs. If the Governor’s recommended appropriations are less than the amounts recommended by one or both of the boards of the two retirement systems for retirement obligations and retiree health care, the Governor shall set forth the long-term financial implications to the State of such shortfall and present a plan to achieve and preserve the fiscal integrity of the retirement funds of the retirement system or systems.

  (b) At the request of the House or Senate Committee on Government Operations or on Appropriations, the State Treasurer and the Commissioner of Finance and Management shall present to the requesting committees the recommendations submitted under 3 V.S.A. § 471(n) and 16 V.S.A. § 1942(r). (Added 1991, No. 265 (Adj. Sess.), § 3; amended 2005, No. 48, § 3; 2005, No. 93 (Adj. Sess.), § 80, eff. March 3, 2006; 2009, No. 1 (Sp. Sess.), § E.103.1; 2013, No. 142 (Adj. Sess.), § 58; 2015, No. 131 (Adj. Sess.), § 32.)

• § 311a. Public retirement benefits; unfunded liability; findings; purpose; intent

  (a) Findings. The General Assembly finds:

  (1) The actuarially determined employer contribution (ADEC) for the Vermont State Employees’ Retirement System (VSERS) has increased by an annual growth rate of 12.1 percent between FY 2009 and FY 2023, and the funded ratio of the VSERS has declined from 94.1 percent from FY 2008 to 67.6 percent by year-end FY 2021.

  (2) The ADEC for the Vermont State Teachers’ Retirement System (VSTRS) has increased by an annual growth rate of 13 percent between FY 2009 and FY 2023, and the funded ratio of the VSTRS has declined from 80.9 percent from FY 2008 to 52.9 percent by year-end FY 2021.

  (3) The General Assembly has appropriated sufficient funds to fully pay the ADEC for both VSERS and VSTRS at the recommended amounts since FY 2007 and throughout the current amortization period.

  (4) Since FY 2009, the accrued liabilities of VSERS and VSTRS have grown faster than the assets of each plan, resulting in a gap between the expected payout of future benefits and the assets VSERS and VSTRS have to pay out those benefits to retired State employees and teachers. This gap is also known as the unfunded liabilities for VSERS and VSTRS.

  (5) In FY 2015, the General Assembly created the Retired Teachers’ Health and Medical Benefits Fund, and health care premiums are paid for on a pay-as-you-go basis from this Fund.

  (6) The FY 2022 State budget expense for retiree health care benefits, known as other postemployment benefits (OPEB), for State employees was approximately $37.2 million and $35.1 million for teachers.

  (7) As of the beginning of FY 2022, the State’s unfunded liabilities for health care benefits for retired State employees and teachers is $2.75 billion.

  (b) Purpose. The purpose of this section is to provide economic stability for retired State employees and teachers by maintaining the financial health of VSERS and VSTRS, while also addressing the unfunded liabilities in the State’s pension and OPEB plans and the decline in the funded ratios of those retirement systems.

  (c) Intent.

  (1) It is the intent of the General Assembly to address the unfunded liabilities and decline in funded ratios of VSERS and VSTRS by implementing several measures, including:

  (A) continuing the General Assembly’s policy since FY 2007 to fully fund the actuarially determined employer contributions rates for the VSERS and VSTRS at the amounts recommended by the respective boards of each retirement system to the General Assembly each year; and

  (B) beginning in FY 2024, annually funding an additional payment to the actuarially recommended unfunded liability amortization payments for VSERS and VSTRS that will increase to not more than $15,000,000.00 each year to each retirement system and remain until the VSERS plan and the VSTRS plan respectively reach a 90 percent funded ratio.

  (2) It is also the intent of the General Assembly to prefund other postemployment benefits to create more security and predictability in health care benefits for retired State employees and teachers. (Added 2021, No. 114 (Adj. Sess.), § 1, eff. July 1, 2022.)

• § 312. Tax expenditure report

  (a) As used in this section, “tax expenditure” shall mean the actual or estimated loss in tax revenue resulting from any exemption, exclusion, deduction, credit, preferential rate, or deferral of liability applicable to the tax. Tax expenditures shall not include the following:

  (1) revenue outside the taxing power of the State;

  (2) provisions outside the normal structure of a particular tax;

  (3) revenue forgone as unduly burdensome to administer; and

  (4) revenue forgone for the purpose of avoiding government taxing itself.

  (b) Biennially, as part of the budget process, beginning on January 15, 2009, the Department of Taxes and the Joint Fiscal Office shall file with the House Committees on Ways and Means and on Appropriations and the Senate Committees on Finance and on Appropriations a report on tax expenditures in the personal and corporate income taxes, sales and use tax, meals and rooms tax, insurance premium tax, bank franchise tax, education property tax, diesel fuel tax, gasoline tax, and motor vehicle purchase and use tax. The Office of Legislative Counsel shall also be available to assist with this tax expenditure report. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. The report shall include, for each tax expenditure, the following information:

  (1) a description of the tax expenditure;

  (2) the most recent fiscal information available on the direct cost of the tax expenditure in the past two years;

  (3) the date of enactment of the expenditure;

  (4) a description of and estimate of the number of taxpayers directly benefiting from the expenditure provision;

  (5) a description of the statutory purpose explaining the policy goal behind the expenditure as required by subsection (d) of this section and 2013 Acts and Resolves No. 73, Sec. 5; and

  (6) a compilation of the items excluded under subsection (a) of this section.

  (c) [Repealed.]

  (d) Every tax expenditure, as defined in subsection (a) of this section, in the tax expenditure report required by this section shall be accompanied in statute by a statutory purpose explaining the policy goal behind the exemption, exclusion, deduction, or credit applicable to the tax. The statutory purpose shall appear as a separate subsection or subdivision in statute and shall bear the title “Statutory Purpose.” Notwithstanding any other provision of law, a tax expenditure listed in the tax expenditure report that lacks a statutory purpose in statute shall not be implemented or enforced until a statutory purpose is provided. The Department of Taxes shall notify the General Assembly when it has determined that a tax expenditure listed in the tax expenditure report lacks a statutory purpose, and the Department shall specify a date, not later than one year after its determination, that it will cease implementation or enforcement of the tax expenditure. (Added 2005, No. 75, § 26; amended 2005, No. 207 (Adj. Sess.), § 23, eff. May 31, 2006; 2007, No. 190 (Adj. Sess.), § 24, eff. June 6, 2008; 2009, No. 160 (Adj. Sess.), § 1, eff. June 4, 2010; 2011, No. 45, § 36k, eff. May 24, 2011; 2013, No. 73, § 4, eff. July 1, 2014; 2013, No. 142 (Adj. Sess.), § 59; 2013, No. 200 (Adj. Sess.), § 21; 2017, No. 74, § 132; 2019, No. 14, § 73, eff. April 30, 2019; 2019, No. 131 (Adj. Sess.), § 292; 2021, No. 105 (Adj. Sess.), § 446, eff. July 1, 2022.)

• § 313. Repealed. 2009, No. 19, § 4.

• § 314. Grant report

  (a) Annually, beginning January 31, 2015, the Department of Finance and Management shall publish on its website a report on all grants of federal and State monies made by each Executive Branch agency in the preceding State fiscal year. The report shall be formatted as a table and shall include, for each grant:

  (1) an identification number or code for each federal or State grant issued by an agency;

  (2) the name and address of the recipient or subrecipient of the State or federal grant;

  (3) a description of the purpose or use of the grant;

  (4) the amount of the grant; and

  (5) the Catalog of Federal Domestic Assistance (CFDA) number for each federal grant.

  (b) Grant reports issued under this section shall be public records available for inspection and review.

  (c) As used in this section, “grant” means a legally enforceable agreement between an agency (grantor) and a recipient or subrecipient (grantee) to carry out a purpose as defined in that agreement. (Added 2009, No. 19, § 3, eff. July 1, 2014; amended 2011, No. 75 (Adj. Sess.), § 116, eff. March 7, 2012.)

• § 315. Repealed. 2019, No. 49, § 12, eff. June 10, 2019.