The Vermont Senate on Thursday approved its $9.01 billion fiscal year 2026 budget, which includes more spending than either the House or Governor Scott proposed.
As reported in the May 2 Lake Champlain Chamber Advocacy Update, Senate leaders acknowledge that cuts will likely be necessary in upcoming House/Senate conference committee negotiations.
A conference committee has already been appointed to reconcile differences between the chambers. House members are Rep. Robin Scheu (D) of Middlebury, James Harrison ( R ) of Chittenden, and Tiff Bluemle (D) of Burlington. The Senate has appointed Sen. Andrew Perchlik (D-Washington), Richard Westman (R-Lamoille), and Ginny Lyons (D-Chittenden).
Unusually, lawmakers are pushing to finalize the budget early—despite the session continuing—due to mounting political tensions over a separate education reform bill. Without a veto-proof majority, Democratic leaders are aiming to avoid a potential late-session standoff with Governor Scott.
The Senate budget exceeds the Governor’s plan by roughly $50 million and the House version by $20 million. It maintains $19 million in General Fund support for child care subsidies, adds $5 million in reserves, and increases support for infant and toddler care—despite the Governor’s proposal to reduce state contributions in light of new payroll tax revenue.
Lawmakers also included a contingency plan to prepare for potential federal funding cuts, giving the Secretary of Administration and the Joint Fiscal Committee expanded authority to manage shortfalls without deep cuts or rapid transfers.
In a bid to offset rising education costs, the Senate’s budget sends $77 million in General Fund dollars to the Education Fund, reducing the average statewide property tax increase from 5.8% to just 0.8%.
Other key provisions include tying nonprofit tax-exempt status to federal law as of April 1, 2025, allocating funds for a military pension tax exemption, and restoring partial funding for Vermont’s International Business Development Office in Montreal. The budget also makes some temporary State’s Attorney positions permanent—one of the few public safety initiatives to survive this year’s cuts.
The conference committee reportedly seeks to trim spending and avoid a gubernatorial veto.