The University of Vermont is asking legislators for $15 million from a statewide student financial aid fund so the school can put it toward a long-planned campus sports complex instead.

While Gov. Phil Scott supports the proposal, it has gotten a cold reception so far from lawmakers. Scott included the funding move in his state budget proposal for the upcoming fiscal year, which starts in July. And he highlighted the project in his budget address to lawmakers at the start of the legislative session in January.

The House took the plan out of the version of a spending package it passed last week. The chamber’s bill, H.951, is now being considered in the Senate.

Both supporters and detractors of the plan agree it would mark a shift in the use of the state’s Higher Education Endowment Trust Fund, which helps pay for aid to students at UVM, in the Vermont State Colleges System or attending other schools in-state.

Last year, the trust fund paid for 675 scholarships averaging $1,400 each, according to data from the Vermont State Treasurer’s Office, which manages the pot of money.  About three-quarters of the beneficiaries were first-generation college students.

But for UVM, the state fund — which recently saw a large infusion of cash — is an attractive option to get construction back underway on its “multipurpose center” project, which broke ground in 2019 but has stalled since the Covid-19 pandemic. The indoor venue would be among the largest in the state, school leaders have said.

Rep. Robin Scheu, D-Middlebury, chairs the budget-writing House Appropriations Committee. She said she opposes UVM’s plan because taking money out of the trust fund would make less available for student aid. Doing that, for a building project, is a policy decision that needs more scrutiny, she said. 

“It’s completely unrelated to the uses of the fund — and that’s a huge policy shift,” she said of UVM’s project Wednesday.

One member of the appropriations panel was blunt in his criticism during a hearing on the plan earlier this year: “I don’t like this,” said Rep. Tom Stevens, D-Waterbury. The House Education Committee has also voiced its opposition to the proposal, calling it “well outside” the fund’s current purpose in a February memo. 

State lawmakers put $6 million into the fund when they set it up in 1999. It gets new money from the estate tax on high-wealth individuals’ assets when they die, as well as an annual infusion of cash from the state’s collection of unclaimed financial property. 

Every year, the state withdraws up to 5% of the fund’s assets for aid to students at UVM, Vermont State University and Community College of Vermont. Money is also sent to the Vermont Student Assistance Corp. for its financial aid programs.

The aid is drawn from the interest the fund accrues, because state law does not allow withdrawals that would reduce the amount of its principal. A smaller percentage of the fund can also be used to bolster UVM and the state colleges’ endowments — provided there are matching private donations available.

Both UVM and the governor’s office are pitching to take $15 million out of the trust fund’s principal. They argue the timing is ripe because the fund got a historic windfall of estate tax revenue last year: more than $26 million, which brought its total assets to nearly $66 million. Even after taking out $15 million for UVM’s new facility, they’ve argued, the fund would still be larger than in years past.

“I know it’s a departure from how those funds have been used for the past,” Marlene Tromp, the UVM president, told House Appropriations last month. “We believe this one-time investment is an appropriate use of those funds, because it will allow us to make such an impact on the state.”

The new facility would be able to seat 5,000 people, Wendy Koenig, UVM’s director of government relations, said at the same committee hearing. It would house the men’s and women’s basketball teams and host concerts, lectures, conferences and other events, according to previously-detailed plans. The project would also renovate existing athletic facilities on the site.

UVM has spent $75 million on the project so far and needs $100 million more to finish it, according to Tromp. The state’s infusion of cash would make some major donors who are on the fence more likely to step up, she said, as well as prevent UVM from needing to raise fees on its students to make up the funding gap.

She argued the facility would attract visitors to Burlington, boosting the local economy. It would also make UVM a more attractive campus for more students, which is a boon to the region and its future workforce. She recalled a similar facility at Boise State University, where she was the president before being hired at UVM last year.

“I used to be really proud when we hosted ‘Disney On Ice’ at my last campus, and all those kids and their families would come,” she said. “Because when you set foot on campus, it starts to change the way you think about college. It becomes your place. And we want people to feel like UVM is their place.”

Scott’s secretary of administration, Sarah Clark, reiterated the governor’s support for the project this week.

In a letter outlining areas of disagreement with the House-passed budget, she said the project would “not only be an investment in our higher education system, but in an economic development and cultural engine for Vermont.”