Federal funds make up about a third of the state’s overall budget, and a critical percentage of funding for many programs serving Vermont’s families with young children every day, including Reach Up, 3SquaresVT, emergency shelter and housing supports, Medicaid, and child care. The Federal FY26 Budget that is eventually passed by Congress, whether comprehensive or piecemeal, is likely to include substantial cuts to this funding.

The Alliance will support strategic, timely, and coordinated advocacy responses to federal funding reductions that ensure our community’s voices are heard, and that core needs are not unnecessarily pitted against one another. We will also support efforts to find increased state revenues to fill in gaps as possible.

Lead Organization: Vermont Early Childhood Advocacy Alliance

Data and Talking Points

• Federal funds make up about a third of the state’s overall budget – about $3.1 billion for FY26, compared to $2.5 billion in General Fund in the total state budget of $9.1 billion.

• Federal funding makes up a critical percentage of funding for many programs serving Vermont’s families with young children every day, including Reach Up, 3Squares, emergency shelter and housing supports, Medicaid, and child care.

• Support systems are already feeling the strain of increased need, even before any federal cuts are made. Hundreds of young children in families experiencing homelessness have been exited from the state’s emergency shelter program this summer, while food shelves in the state are seeing a marked increase in demand.

Result: No action, response language passed

Pre-session goal: Provide strategic, timely, and coordinated advocacy responses to federal funding reductions that ensure our community’s voices are heard, and that core needs are not unnecessarily pitted against one another.

Congress has so far taken no significant action during 2026 on federal budget matters. The Legislature did include language in the FY27 Budget outlining an administrative process for the Secretary of Administration, the Joint Fiscal Committee, and the Emergency Board to prepare and implement spending reduction and transfer plans, or use reserve funds to maintain funding until the General Assembly is in session, in the case of up to $50 million in federal funding losses. Changes in federal funding will be monitored by the Secretary of Administration.