Tax commissioner pitches $38 million budget, flags IT upgrades and staffing pressures

Bill Scholbeis, who introduced himself as commissioner of tax, presented the Department of Taxes’ FY27 request to the Senate Appropriations Committee and outlined priorities including service-oriented administration, reducing the tax gap and modernizing systems.

Scholbeis said the department’s FY27 request totals about $38 million, a roughly 2.34% increase year over year, and that salaries and benefits comprise about 90% of the budget. "We brought over $3,000,000,000 last year for the state of Vermont," Scholbeis said when describing the department’s revenue role and the importance of balancing service and integrity.

The commissioner discussed the department’s information-technology portfolio: the state is completing an integrated tax system rollout, recently launched a scanning system, and is implementing a property tax system with vendor Numeric. The department retains a remaining multiyear appropriation of about $3.2 million for ongoing upgrades and version updates.

Scholbeis described compliance initiatives and targeted audit work (notably an audit of childcare contribution compliance) and said the department is updating KPIs to better measure the effect of compliance programs. He cited a rough, scaled estimate of the tax gap at approximately $300 million (an extrapolation based on federal IRS estimates adjusted to Vermont’s tax base).

On staffing, Scholbeis said vacancy rates are low across most of the department but higher in the compliance division; recruiting audit staff has been difficult and the department recently moved those positions up a pay grade to aid hiring.

Scholbeis also summarized tax-administered benefit programs, such as the homeowner rebate and renter credit. He said the biennial appropriations act (BAA) anticipates about $11–11.5 million for renter credits this fiscal year (adjusted for inflation) and described a proposal to move certain allocations back into the pilot fund.

The committee did not take votes on the tax budget during this session but asked the department to follow up on performance measures, vacancy trends and the detail of IT upgrade spending as budget deliberations continue.