Legislative Update 2/25/26

Next week is town meeting week, which means legislators are getting ready for a much needed week off, committees are submitting budget letters to Appropriations, and we are starting to see what will make it through this session. The first half of the session has been busy – Common Good has testified nearly every week so far, elevating nonprofits in five different committees on issues ranging from health care to volunteerism. While there have been ups and downs, wins and losses, our growing presence and voice at the State House, alongside our nonprofit peers, is building public understanding of and support for our sector that is key to our collective success.

This week:

Common Good VT Appropriation Request to Strengthen Vermont’s Nonprofit Sector

Despite it being a particularly challenging budget year, especially to be making a first time state appropriation request, we continue to make some forward progress on our funding proposal to support Vermont’s nonprofit sector.

Common Good testified in the Senate Economic Development Committee last week to make a case for support, underscoring the fact that unlike for-profit businesses, nonprofits do not have access to publicly funded technical assistance services and at this critical time for the sector, public investment is particularly critical. While our goal was to have funding for nonprofit technical assistance added to omnibus economic development bill, S. 327, this was still a productive conversation, providing clarity and deepening the Committee’s understanding sector needs. Watch Common Good’s testimony here.

On Wednesday, Senate Economic Development took up S. 327 again and Common Good was able to provide additional testimony. Senator Chittenden recommended adding one-time funding for Common Good but even with support from Chair Clarkson, the Committee ultimately decided that they would leave it up to the House Commerce Committee to add it in.

The House Commerce Committee, in drafting their budget letter, decided to hold its recommendation on Common Good’s proposal until it receives S. 327 from the Senate.

Another positive update is that the House Government Operations Committee voiced support for Common Good’s proposal on Friday and decided to include it in their budget letter to the Appropriation Committee. You can hear a clip of their conversation here and their budget recommendations here.

Help us get this request across the finish line – join 60+ other nonprofits who have already signed on in support:

SIGN ON HERE

Updates on Congressionally Directed Spending

The House Appropriations Committee had staff from Vermont’s congressional delegation in to provide updates on congressionally directed spending (CDS), also known as earmarks. After a decade long moratorium on earmarks due to concerns about irresponsible use of taxpayer dollars, CDS was brought back in 2022 with more guardrails in place to ensure accountability and prevent misuse. CDS is a pathway for Vermont municipalities and nonprofits to access federal funding that VT may struggle to compete for through the normal grant process, but even after funds are awarded, recipients still must formally apply and adhere to normal grant requirements and processes. It is not an easy, fast, or predictable process, and it may months or years to fully access awarded funds.

Key Information:

  • Typical Timeline:
    • Congressional approval → agency notification (2–3 months)
    • Application to the agency → review (months)
    • Funds accessible → often 6–18 months after congressional announcement
    • Most agencies require money to be spent within 3 years
    • CDS is ideal for projects 2–3 years out, not emergencies or shovel‑ready needs.
  • Projects must fit existing federal programs
    • Your project must match an existing federal account (e.g., USDA Rural Development, HUD, HRSA).
    • The delegation can help you determine where it fits.
  • Demonstrated ability to manage federal grants is preferred – smaller organizations might consider partnering with towns or a larger organization.
  • Some federal accounts (especially USDA Rural Development) require local match funding, with the match amount depending on how rural the project is.
  • CDS in the House (Balint’s office) is more restrictive.
    • House cannot fund:
      • Program operations
      • Staffing
      • Medical services/equipment
      • Anything outside specific eligible accounts
    • House projects are almost always:
      • Brick-and-mortar
      • Renovation
      • Equipment (non-medical)
      • Water/wastewater
      • Housing development support
    • There is slightly more flexibility in the Senate but there is a preference for low overhead/indirect/staffing costs, with restrictions in some cases. Most of the funds should go directly to the project.
  • Because CDS is long‑term funding, nonprofits should come prepared with:
    • Feasibility studies
    • Architectural/engineering estimates
    • Cost projections
    • Community needs data
    • Letters of support (state, local, community)
  • Nonprofits can apply to all three offices (Balint, Sanders, Welch) but the three offices will coordinate requests.
  • Staff can provide support and guidance for those applying for funds, short of actually writing the application.
  • The window to apply for funding is short, especially in the House. Have your project description, timeline, and budget ready to go in advance.

Applications for FY27 funding requests will open very soon in early March and will be available on our delegations’ websites:

Staff provided overviews of previously funded projects and provided guidance for new requests. You can watch the full conversation with the committee here.

Health Care

Association Health Plans

The House Health Care Committee walked through a new draft of H. 585, An act relating to health insurance reforms, on Wednesday. The new draft includes many changes, including the removal of some sections and new additions. The association health plan section supported by Common Good remains in tact.

Notable changes include the removal of the age rating section, which have permitted insurers to set premiums based on age classifications, and the addition of a section amending statute to not permit insurance plans to put a dollar limit on prescription drug benefits.

Primary Care Payment Reform

The Senate Health and Welfare Committee is continuing their work on S. 197, An act relating to establishing a primary care payment reform program. They are moving into markup with broad agreement that Vermont must urgently expand and strengthen primary care, but key design decisions remain unresolved. Stakeholders support modernizing the Blueprint for Health, improving access, and preparing for major 2027 federal changes, yet differ on the definition of primary care, the structure and timing of a new payment model, and how outcomes and data sharing should be built in. Insurers want more time and clear metrics. The Health Care Advocate urges using existing tool to deliver immediate improvements while longer-term reforms develop. The committee will consolidate testimony, identify decision points, and begin drafting amendments with the goal of advancing a bill before crossover.

Vermont Homeless Response Continuum

By Rachel Farhi, Common Good Vermont Policy Intern

Bill 26-0766, An act relating to establishing the Vermont Homelessness Response Continuum, aims to eliminate homelessness in Vermont by creating a continuum of care. The continuum of care would create the general assistance program providing emergency housing benefits, interim shelter opportunities, and more efficient pathways to permanent housing for Vermonters experiencing homelessness. Bill 26-0766 would decrease the reliance on the hotel motel program. The House Human Services Committee is still working through certain sections and funding for the bill. The bill will take effect on July 1, 2026, except Section 6: the grant requirements which will take effect October 1, 2028. 

Highlights include: 

  • As of 2024, the Vermont Housing Needs Assessment notes that 36,000 primary homes are needed in Vermont between 2025-2029, 3,295 of which are needed to address homelessness.
  • The act will create a continuum of care through support and services in order to ensure emergency housing is available to vulnerable Vermonters.
  • Empowers local communities to administer housing services to meet their needs, creates diverse housing options, and creates services to decrease a return to homelessness.
  • Prevention and diversion services will function as a primary entry point into the Vermont Homeless Response Continuum.
  • Use of hotels and motels will continue during the winter between December 1st- March 31st but with decreased use.
  • Establishes a single continuum of care throughout Vermont by July 1, 2028. 

Recent testimony: 

Deanna Hartog, Poverty Law Fellow, Vermont Legal Aid has concerns about bill 26-0766. The organization supports the invented interest of creating a continuum of care and the need to create more shelter capacity. However they are concerned with eliminating or strongly restricting the hotel motel program. Restricting the program from December 1- March 31 leaves unhouse people in a difficult situation for remaining months in the year. The bill does not have a clear transition plan for those utilizing the hotel motel service. Vermont Legal Aid is also concerned about the Office of Economic Opportunity designing and operating a complicated new system. Vermont Legal Aid is urging the Committee to make changes to the bill before advancing it.  

End Homelessness Vermont does not agree with bill 26-0766. The organization does not agree that services should be required, as their data shows that more people are going to engage in services leading to better outcomes when they are available but not required. End Homelessness Vermont wants the language in the bill to emphasize that people have choices in their providers and use of services. In addition, experienced experts of homelessness are concerned about clarifying that funds do not limit shelter options, and the bill’s definition of disability. End Homelessness Vermont points out that statewide participation in organizing housing coalitions is a very hard task and wants to find an option that would work better statewide. End Homelessness Vermont main point is that the organization does not support required services as it is proven to not help. 

Jenny Samuelson, Secretary, Agency of Human Services does not support bill 26-0766. The Agency of Human Services worked to create a proposal that reflected “a coordinated sustainable redesign of Vermont’s homelessness response system”. However, the agency’s proposal was not advanced and the current bill does not reflect what the proposal developed. The bill does not take the work from bill H.594 to create a plan with funding and clear parameters instead the bill would move the state backwards on the issue of homelessness. The bill does not reduce the reliance on the hotel motel act, and does not protect the interest or protect the most vulnerable Vermonters. In addition, the Agency of Human Services does not believe that the timeline and  implementation of the bill is realistic. The Agency of Human Services believes that without changes the bill will be a risk both operationally and fiscally to Vermont.

Chad Simmons, Executive Director, Housing and Homeless Alliance of Vermont supports bill 26-0766 however, the organization has comments on the bill. The alliance wants the bill to align definitions in the bill to state and federal definitions to avoid confusion in funding or administering services. The Housing and Homelessness Alliance is open to merging the continuum of care and agrees that a merger would allow for a more effective use of resources. However, continuum of care merging would need resources to create the best outcome which may not be available through federal funding. There are also concerns about Vermont’s existing programs and investments towards homeless response that are not explicitly stated in the bill. 

The Vermont Community Action Partnership supports bill 26-0766 but wants to add comments for the committee while the bill continues to be worked on. The organization is concerned that the motel hotel program will only be utilized from December 1- March 31 as there would be an increase in homelessness during the rest of the year. The organization does support the merger of continuums of care but wants the bill’s language to be more in-depth.

Employee Leave

By Rachel Farhi, Common Good Vermont Policy Intern

Bill H. 495, an act relating to the Parental and Family Act, is being discussed in the House General and Housing Committee. It amends 21 V.S.A. § 472 to prohibit employers with more than 50 employees from treating compensable work-related injuries or illness as unpaid leave.

While Vermont statute (21 V.S.A. § 472) provides more protection than the federal Family and Medical Leave Act, there is a loophole that permits employers to count leave for employees who qualify for workers compensation under the Parental and Family Leave Act as unpaid leave at the same time. The current draft of the bill would prohibit this practice for large employers. The bill will take effect on July 1 2026. 

Key provision: For employers with more than 50 individuals employed for on average 30 hours per week during a year shall not count compensable work-related injuries or illness as unpaid leave.

Testimony: 

Richard Wobby, Executive Vice President, Director of Safety Training and Member Services, Associated General Contractors of Vermont does not agree with the bill emphasising that supporting workers is not the issue but instead how these changes will affect work on the ground. Richard Wobby explains that in contractor industries the work schedules are tight and employees are not easily replaced which would leave employees with workforce stability concerns especially during peak construction season which would lead to delays for projects and rising costs. The organization supports workers during important family and personal events but is emphasising that the Committee should take a more balanced approach that “protects employees while also reflecting the operational realities that Vermont businesses face”. The organization wants the needs for employees to be met without downsizing the requirements for the business. The organization is asking the Committee to create adjustments or postpone action to create a better bill.

Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce does not agree with the bill. The Vermont Chamber of Commerce explains that workers compensation and the Federal Medical Leave Act do not work the same way. Workers compensation does not ensure that an employee’s job or a comparable job will be available to an employee when they return to their job, which the Federal Medical Leave Act is required to do. The Chamber of Commerce emphasizes that currently there are protections for workers during recovery but under the proposed amendment to 21 V.S.A § 472 the protection window would not apply for a compensation leave. Megan Sullivan also points out that the systems are designed to operate together and separating them will be difficult to regulate and would create problems. 

Other Updates and Action Items