In addition to managing Vermont’s healthcare programs, the Agency of Human Services provides most of Vermont’s social services and financial assistance programs via the Department of Children and Family Services.
This Department provides a wide array of key services and financial assistance, including but not limited to the administration of Vermont’s food stamp program (3 SquareVT), child protective services, development and care, Temporary Assistance for Needy Families (Reach-Up), aid for the aged, blind and disabled and financial assistance for both weatherization and home heating.
State vs. Federal Funding
The actual appropriations for Children and Family Services increased from $391.2 million in fiscal year 2016 to $393.3 million in fiscal year 2018, representing a very modest 0.3% annual increase.
During this same period, federal funding declined from $201.3 million to $ 197.7 million. These funds come from a wide variety of federal grant programs as well as the federal government’s share of the Medicaid programs managed in this department.
Given the decline in federal funding, the state’s share grew from $189.9 million to $195.6 million, representing a 1.5% annual growth rate. Given the current environment in Washington, Vermont’s share of these expenditures is trending higher.
Many of these financial assistance programs have income-based eligibility requirements. Vermont’s economic performance is now quite strong, with unemployment below 3% and wages growing at their fastest pace in a decade. In these circumstances, it might be reasonable to anticipate stable to declining financial assistance expenditures.
Indeed, that is the experience in Vermont over the last few years. Appropriations for Reach-Up, which is Vermont’s brand name for Temporary Assistance for Needy Families, were down over 10% from fiscal year 2016 to 2018. Most of the other divisions within Children and Family Services had stable appropriations during the 2016-2018 period. The only department recording materially higher expenditures was Family Services, Vermont’s front line for child protective services. Here, expenditures increased from $107 million to $116.4.
Other Assistance Programs
There are some important financial assistance and social programs provided by other parts of the state government.
First and foremost is the Earned Income Tax Credit. Next to food stamps, this is largest financial assistance program in Vermont. Some 45,000 Vermonters receive Earned Income Tax Credits each year. Federal credits are in the $85 million range and Vermont state credits are an additional circa $27 million. For 2019, Vermont has increased the state Earned Income Tax Credit from 32% to 36% of the federal amount.
Low-income housing and housing assistance is another large category, mostly managed out of the Agency of Commerce and Community Development. Vermont Homeowner Rebates and Rent Rebates were $16.1 million and $9.0 million in fiscal year 2018, respectively. The Vermont State Housing Authority has over 3,000 tenants on Housing Choice Vouchers and over 3,000 units of subsidized housing all funded under HUD Section 8. Section 8 federal grants are in excess of $55 million annually.
School nutrition programs are managed out of the Education Department. Federal grants for the School Lunch Program, Child and Adult Care Food Program and Summer Food Service Program are in the $35 million/year range.
The Labor Department manages a number of employment services, including job search and training. Federal funding includes both Workforce Investment Act and Employment Service grants totaling about $6 million annually.
Last, the Vermont Student Assistance Corp provided $24.6 million in grants and scholarships to Vermont students in fiscal year 2018, all funded by state of Vermont appropriations.
Embedded Poverty: With Vermont’s unemployment rate below 3% and wages now growing at about 4%, one could argue that the Vermont economy is about as good as it is ever going to get. If that is the case, the costs outlined above for social services and financial assistance are probably at some baseline level reflecting embedded poverty in Vermont.
Cost to Vermont: The expenditures funded by the state government for all of the programs outlined above look to be a bit less than $300mm in the aggregate. In fiscal year 2018, total Vermont state tax revenues were $3.2 billion. Excluding Medicaid, social service and financial assistance programs absorbed approximately 9% of state tax revenues. Including Medicaid, the cost represented about 35% of total state tax revenues.
- Human Services: Vermont’s Welfare: https://theinformedvermonter.com/human-services-vermonts-welfare/
- Welfare: Vermont’s Total Cost of Welfare:https://theinformedvermonter.com/welfare-vermonts-total-cost-welfare/