MONTPELIER—The Vermont Legislature on Monday passed the year’s landmark education reform package, setting in motion years of transformation to the state’s public school and property tax systems.
H.454 would radically alter Vermont’s education funding and governance landscape over several years, consolidating school districts and shifting the balance of power over district budgets from the local to the state level.
Despite months of contentious debates and moments when the entire package looked bound for failure, the final vote was anticlimactic. House Speaker Jill Krowinski, D-Burlington, announced the vote the chamber was considering, and when no one immediately stood up to begin debate, she called the vote by voice. That meant individual members did not have their position tallied, and no rank-and-file members spoke for or against the legislation on the floor before the vote.
After the ‘yeas’ and ‘nays’ rang out, representatives appeared surprised by what they’d just done.
Rep. Troy Headrick, I-Burlington, stood up in disappointment.
“I’m a little shocked actually at the speed that that vote was called,” he said.
Though the legislation proposes generational change, the bill is replete with caveats and contingencies, requiring years of further work until the biggest transitions begin in 2028. Among the most significant moves, H.454 would start to create a new education funding formula, impose class-size minimums and reimagine income-sensitive property tax relief.
While Gov. Phil Scott has said the bill will save “hundreds of millions,” the exact financial implications are impossible to predict without knowing what future school districts will look like. The bill’s supporters insist it will bring stability to districts and bend the cost curve that’s caused property taxes to rise rapidly in recent years.
Earlier in the day, the Senate had passed H.454 despite most of the chamber’s Democratic caucus voting in opposition. In the Senate — and later in the House — the bill survived attempts to kill it on procedural grounds.
After the House’s voice vote, Krowinski allowed representatives to stand and discuss the bill after the fact.
For his district in Barre, Rep. Teddy Waszazak, D-Barre City, said H.454 would transform public schools for the better by bringing the district’s funding more in line with the state’s average.
“The status quo is killing us,” he said.
Rep. Leanne Harple, D-Glover, a teacher, stood to express her “unapologetic” opposition to the bill she said would lead to the closure of small rural schools.
“I’ve heard the word equity to justify this bill, but I believe that word is being misused,” she said. “There is nothing equitable about putting a child on the bus for two hours a day.”
The bill drew ire from the associations representing Vermont’s education community, and over the weekend, superintendents and school board members went public with their opposition.
In an interview, Don Tinney, president of the state teacher union VT-NEA, criticized how H.454 consolidated power in Montpelier.
“I think that we know that the best decisions for students are made by people who know their students,” the union leader said. “Our local school boards currently make those budget decisions, policy decisions for kids within their community, and so the centralization of power within the education system to Montpelier gives real cause for concern.”
Tinney argued the state doesn’t need to change how much it pays for education, but rather how it levies taxes. To that effect, the teachers union has called for funding schools with an income tax rather than a property tax, an idea that received little air time this year.
“I would ask any policymaker, any legislator to spend a week in the school, to substitute in classes, to work in the cafeteria, to ride the school buses for a week, and at the end of the week, decide where all the fat is in the budget,” he said.
Before Monday, H.454 had unusual backing for such a controversial bill.
The Democrats leading the House and Senate had voiced support, as had Scott, a Republican. Yet a majority in either chamber was far from certain, with a slice of both Democrats and Republicans opposed, though perhaps for different reasons. Some have argued the bill spends too much. Others say it underfunds schools. Some fear it will gut rural school districts and shutter small schools. Still others argue it shifts too much power out of local hands and into Montpelier.
What’s in the bill?
Lawmakers describe H.454 as working toward two broad goals: expanding educational opportunity across the state, and making public education more affordable for taxpayers.
To that end, the bill would consolidate Vermont’s 119 school districts into larger, regional bodies, and move the state to a new education funding formula.
The state would gradually pivot to funding its education using a foundation formula beginning in fiscal year 2029. The method — used in most states across the country — moves primary authority over how much school districts can spend from the local to the state level. That’s a huge change from the current system, which gives the vast majority of authority to local officials.
Under the foundation formula, districts would receive money based on the number of students enrolled, with additional dollars for students who are more expensive to educate, such as English learners and students from economically disadvantaged backgrounds. Districts could choose to spend more —but not less — than the formula provides.
To ease the transition to the new formula, lawmakers proposed phasing in the new system. As intended, that process would slowly pull back funding from districts that spend well above average now, and ramp up spending in historically low-spending areas.
Lawmakers, with the help of Scott’s team, devised a new income-sensitized property tax discount. The framework would allow Vermonters making $115,000 or less to exempt a portion of their house value from property taxes, with the possibility of increasing the income threshold in the future. The exemption creates a sliding scale, with lower-income homeowners eligible for bigger exemptions. Up to $425,000 in home value is eligible for the discount.
The bill would put into effect average class-size minimums in first grade through high school for certain subject classes. But school districts would only face the possibility of repercussions for being out of compliance after three years of not meeting the minimums. Plus, a waiver process would allow schools to petition for an exemption.
Despite the sweeping changes outlined, almost as many details need to be hashed out. The bill’s biggest unknown is what future consolidated school districts could look like. A task force will hash out not more than three possible configurations this summer that the Legislature would need to vote on as soon as next session. In rough terms, that group might bring back plans with anywhere from 10 to 25 future districts.
Those maps, as well as the new funding formula, would take effect in July 2028.
Other key, outstanding details include how to handle existing district debt and different teachers contracts in new, consolidated districts. Lawmakers also need to figure out how to pay for — and bring down the cost of — special education, and how money would be allocated to career and technical education and pre-kindergarten.
The bill is structured so that if certain future requirements are not fulfilled, the transformation falls apart. The foundation formula is contingent on creating consolidated school districts. Several aspects rely on future studies and the outcomes of those analyses.
