Advocacy Update – Week 13 – 2025

House’s Education Transformation Bill on the Move 

The most monumental change in Vermont education history since the Brigham v. State decision is one step closer to becoming a reality. 

The Big Picture: This bill changes virtually every aspect of the Vermont education system with an eye towards school and school district consolidation, more regionalization, and further statewide uniformity. 

• Under this bill, school districts potentially wouldn’t need to vote on a budget every year, and changes to the tax administration would mean voters have more information when they got to vote. 
• Still, areas of disagreement abound, as business groups worry about how the legislation segregates property tax payers into different classes and provides the opportunity to not address systemic issues around costs at a future date and instead have certain classes of ratepayers absorb excess spending, disincentivizing further efficiency and reform. 
• Of note, no structural proposals put forth by the Governor or the Legislature save money in the short-run, and all look towards cost containment through consolidation at least two-to-three years in the future. 

State of play: A highly anticipated floor fight did not happen Thursday evening, and instead, the House advanced the massive education transformation bill by voice vote with anticipation of long floor debate today after both parties worked their votes.

• As we hit publish on this at around noon on Friday, there was still no action on the bill; however, an amendment that represents a compromise from both party’s leadership will be added to keep the bill alive and the discussion moving. 

What’s Next? Assuming it passes the House later today, this bill still has a long way to go, as the Senate and the Governor have different visions for how it should be shaped. 

Zoom In: Here is a comprehensive breakdown of almost everything in the bill. 

• Foundation Formula: The bill moves Vermont to a foundation formula by 2029, establishing a base grant, called an Education Opportunity Payment (EOP), of $15,033 per pupil, structured to adjust automatically for inflation and which is adjusted for student needs by weights. 
• Student Weighting: Currently, school weights affect the “tax capacity” or the amount of funding a school district can raise at a specific tax rate. This bill would instead directly affect the funding a school district receives per student. 
  • This will require many districts to spend more, as some districts in the past would use that tax capacity to buy down their local tax rates. 
• Supplemental District Spending: Districts that wish to spend more than the education opportunity payment amount would need to raise the additional funds locally, which will be referred to as supplemental district spending (SDS) though often called excess spending in other foundation formulas nationwide. Districts are limited to no more than 10% of their EOP. 
  • These funds would be raised using a method similar to the current system with a statewide yield that would force every school district to have the same capacity as the school district with the lowest taxing capacity. 
  • Revenue raised from the supplemental district spending tax rate above the approved supplemental district spending would go to the Supplemental District Spending Reserve. 
  • One big difference between the current yield and the yield this legislation seeks to enact is that voters could know the yield value and, therefore, their tax rates ahead of their budget votes, improving transparency. 
• Scale & Class Sizes: Starting in 2026, the bill sets minimum average class sizes of 12 students for Pre-K, 15 students for Grades 1–4, and 18 students for Grades 5–12. 
  • If class size minimums are not met for two consecutive years, the school would be deemed noncompliant with Education Quality Standards (EQS), triggering an administrative intervention process.
  • With Vermont’s current average class size slightly over 10, this provision would push many schools to consolidate or reorganize. 
• Districts: A new Redistricting Subcommittee would be added to the Commission on the Future of Public Education, composed of five retired superintendents, who will draft new supervisory district maps, with each district serving at least 4,000 students. 
• Reappraisal: The bill aims to move to a more uniform and frequent statewide reappraisal system, with regional appraisal districts that are comprised of representatives from municipalities.   
• New Tax Classifications: The education property tax system would be restructured from two rates, homestead and nonhomestead, into four tax classes, each with its own statutory rate adjustment factor that modifies the base statewide education tax rate. 
  • These classes are: Homestead, Nonhomestead Apartment (any rental with landlord certificate), Nonhomestead Residential (second homes predominantly), and Nonhomestead Nonresidential.
  • While the rate adjustment factors are all equal in the legislation currently, it is the stated intent of the legislature to use these new levers to bring in more tax revenue from second homes and to lower the tax burden on homestead rate-payers, as well as apartments. 
  • Those that advocate for business are concerned that the new classification leaves employers vulnerable, as they are isolated in their own class, to tax increases at a later date. 
• Income Sensitivity Transitioned to a Homestead Exemption: The bill transitions from the current income-based property tax credit to a homestead exemption model, which would directly reduce the taxable value of owner-occupied homes rather than providing post-payment relief.
  • This method is reflective of proposals from the administration as well as the Lake Champlain Chamber. It improves transparency by allowing individuals to more easily know how their property taxes can be adjusted both during filing and during school budget deliberations. 
  • A major point of departure from what was passed and what was proposed, however, is that this current system would cost the state $45 million in forgone revenue that would need to be made up by those not receiving income sensitivity. 
• Statewide Graduation Requirements: The Agency of Education would adopt uniform statewide graduation standards, replacing locally developed requirements, with implementation tied to the new governance structures.
• Statewide School Calendar: The bill calls for a uniform statewide academic calendar to improve coordination across districts and support student mobility.
• School Construction: The bill reactivates a State Aid for School Construction Program, including funding and oversight mechanisms. An initial $450,000 is appropriated to staff and develop this program, with future capital investments expected.

Overall Timeline