Superintendents who supported the House version of H.454 see Senate changes as devastating to local schools and public education, say all non-core classes will have to be considered for cuts
By Polly Mikula
Education funding reform has been the biggest legislative lift this year, as it proposes to drastically reformulate how taxpayers fund K-12 schools. Rising costs, coupled with a dwindling student population over the past few decades (K-12 enrollment has shrunk by 40,000 students over the past 40 years to around 84,000 today), have put so much pressure on taxpayers that about a third of the 119 school district budgets failed at Town Meeting Day in 2024. This year, 2025, while only a handful of budgets failed, Republicans took many seats previously held by Democrats due to their platforms of affordability and lowering taxes.
Education tax makes up over 70% of Vermonters property tax bill.
In January, to address these concerns, Governor Scott, along with Education Secretary Zoie Saunders, unveiled an education overhaul proposal that would consolidate Vermont’s 119 school districts into just five regional districts and adopt a foundation formula model that would provide a base amount of $13,200 per student. The governor proposed a rapid transition with the foundation formula beginning next school year, 2026-27.
Legislators quickly decided that moving to five school districts was too drastic. Still, they embraced the idea of larger districts and the foundation formula model (used by 36 states), though base amounts differ, as does the timeline for implementation and governance structures.
Currently, education in Vermont is funded after communities develop and vote on their own pre-K-12 budgets. The state then sets a statewide tax rate to cover the combined cost of that education spending, minus federal aid. With a foundation formula, there would no longer be local school budget votes. Instead, schools would receive an amount per pupil, and then an amount above that for students in various categories of need — they would then craft their budget allocations around that amount.
Last month, the House passed its take on education funding reform, H.454. The House version called for a committee to develop three proposals for new school district boundaries by the next legislative session. That committee would be made up of five people with experience working in Vermont’s public education system and four legislators. The House bill also included average class-size minimums: 12 students for kindergarten classes; 15 students for grades 1-4; and 18 students for grades 5-12. H.454 also put strict parameters on independent schools, requiring them to serve at least 51% publicly funded students to receive taxpayer money.
The House calculated a base funding amount of $15,033 per student, with implementation starting in 2029.
The Senate version of the bill, to be voted on this week, made significant enough changes to the House version that it lost the support of most school communities.
It changed the redistricting committee to be composed exclusively of legislators, took out the provision for class-size minimums but simultaneously lowered the base funding amount to $14,870 per student, a number that Sen. Ruth Hardy (D-Addison) said was not rooted in data. The Senate version, however, was friendly to independent schools, authorizing them to serve just 25% of publicly funded students to receive taxpayer money. In the Senate version, the foundation formula plan would also go into effect two years earlier than the House’s version, on July 1, 2027.
If the Senate approves the measure this week, it will head to a conference committee, where three House members and three senators will try to reach a consensus before sending a compromised bill to the governor to sign.
Reactions
The House-passed version of H.454 is not universally supported by the education community, but it does have the support of several major players, including the state associations representing superintendents, school boards, and principals. They all lined up in support of the House bill and now strongly oppose the Senate’s updates.
“This is an extreme. It’s so far from where the House was,” said Mountain Views Superintendent Sherry Sousa, which serves the towns of Barnard, Bridgewater, Killington, Pittsfield, Plymouth, Pomfret, Reading, and Woodstock. “There’s significantly more legislation in the House [version of H.454] that gives really specific guidelines of how this work needs to happen, whereas the Senate is very focused primarily on restricting funding … To me, this is gutting public education, whereas the House is working very hard to maintain public education and rein in costs,” Sousa said.
On Monday, May 19, Vermont public school student leaders called on their peers to walk out of school on Wednesday, May 21, in protest of H.454.
Rebecca LaDue, a junior at Arlington Memorial High School, said, “My school is organizing to bring attention to these attacks on our schools. Our school is small, and the H.454 bill directly affects us. Students and teachers alike recognize the negative impact this will have on our schools.”
Calculating budget implications
Analysis performed by the Joint Fiscal Office (JFO), May 2, calculates the difference between current school districts’ FY25 education funding and the estimated “Education Opportunity Payment” under H.454.
Based on those calculations, Mountain Views SU will see its FY25 budget reduced by 24.6% or about -$6,237,855. Norwich school district will see a 27.7% reduction or about -$4 million, and Hartland will see a 20% cut or about -$2.15 million. All other districts in Windsor County will see a less than 5% change compared with their FY25 budgets.
In Rutland County, Barstow will see a 9.2% reduction or about -$548,247 cut, and Mettawee School District will see a 4.9% cut or about -$309,671.
All other districts in Rutland County will see mandated increases in their school spending, the largest of which is a 30.4% increase at Quarry Valley USD equal to $5.5 million, a 17.7% increase in Ira equal to $135,423, and a 13.7% increase in Slate Valley USD adding $3.6 million to their budget.
Calculating tax implications
Those in districts with mandated budget cuts have historically voted for higher spending for their local schools. Under H.454, they will not be allowed to continue doing so, but instead will receive lower taxes, according to JFO analysis May 12.
Windsor and Rutland Counties high increases/decreases:
- Norwich SD will see a 26% homestead tax decrease (-$0.41). An decrease of $410 per $100K property value.
- Mountain Views SD will see a 20% tax decrease (-$0.33)
- Hartland SD will see an 18% tax decrease (-$0.29)
Those in districts with mandated budget increases have historically supported lower spending for their local schools. Under H.454, they will not be allowed to do so. Instead, they will see tax increases to support the new funding, according to JFO.
- Ira will see a 31% homestead tax increase ($0.32). An increase of $320 per $100K of property value.
- Quarry Valley USD will see a 26% tax increase ($0.27)
- Slate Valley USD will see a 20% tax increase ($0.22)
- Pittsfield will see a 12% tax increase ($0.14)
“Winners are losers, losers are winners,” quipped Vermont Public reporter Lola Dufort describing why the move to a foundation formula may be universally unpopular as all versions of the education reform bill (the governors, the Senate’s or the House’s) runs the risk of substantially raising taxes in the very communities — many of which are economically disadvantaged — that are most sensitive to tax hikes.
“We are one of the Top 5 in terms of per pupil spend. So that’s why we’re getting such cuts,” said Mountain Views Superintendent Sousa. “Our community has consistently voted to support our schools at a very high level and want that for our students. So it kind of seems like a worst-case scenario for everyone. It’s a real lose-lose,” Sousa summarized.
H.454 would also repeal the law’s current provision allowing residents to pay some or all of their school taxes based on their income, which 70% of Vermont homeowners do. Instead, H.454 recommits the state to regressive property taxes that hit low- and middle-income residents the hardest.
Effect on education, what could be cut?
“Anything that’s ancillary would have to be considered,” Superintendent Sousa said.
“You saw some modeling when we had to cut the $2 million [for FY25],” Sousa continued. “We looked at what the priorities were for the district, and that was really our commitment to literacy and math and to pre-K… With this level of cuts, we’d have to look at things like class size and class consolidation — the Senate is spouting, ‘oh, there’s no [mandate for] class size or closing small schools,’ but there’s no way that we could continue with the class sizes we have if we have to cut at least $6 million. I think that’s really a misrepresentation by the Senate,” Sousa continued. “There’s no district that can have 10 to 15 students in a class and still get to that per pupil cost.”
Consolidation of grades would mean two grades combined in one classroom. No more than two grades are permitted.
When asked if the budget cuts forcing consolidation and increased class size would effectively force small school closures in the district — Reading Elementary currently has only 37 pre-K-4 students and Barnard has 58 pre-K-6 — Sousa said: “I can’t say that, but… everything has to be on the table, and we will have to make really hard choices, and that will be with the recommendations of administrators and conversation with the finance committee and the decision of the full board.”
Staffing cuts would also be effectively mandated, Sousa explained. With “85% of our budget being staff, it will mean people, it will mean positions,” she said. “We still have contracts that have mandated increases that we can’t ignore; we still have to address double-digit health care increases… I can’t even begin to fathom what that would look like.”
“We’re mandated to have drivers’ ed, PE has to be twice a week in our elementary school… There are some things in statute, but even those will be challenging. Once again, we get mandates that are not funded,” she said.
Funding building and grounds maintenance, let alone improvements, will also likely be put off. While H.454 does aim to bring back the School Construction Aid Program, thus far, there is no funding for it.
The district would also have to consider steep cuts to after-school activities. For the FY25 budget, the district cut 10% of funding to sports, theater, and music, which equaled about $70,000 in savings. Deeper cuts to those “would have to go back on the table,” Sousa added.
When asked if there were any additional provisions or even new mandates in H.454 to improve educational quality (required language classes or advanced placement classes, for example), Sousa said ,“No, none,” adding, “There is literacy legislation that went through last year that talks about the kinds of best practices for literacy, but there is nothing in terms of improvement, no.”
Woodstock High School is unique in its current offering of 17 AP classes. “If you look around, Windsor High School has no AP, Springfield has no AP, Bellows Falls has no AP, even Hanover High has no AP. Lebanon has 14 AP classes, and White River Valley School has 9. With 17 AP classes at Woodstock, it’s the highest number in this area, and our communities and our students expect that… but we will not be able to maintain that.”
Woodstock Middle/High School attracts students from outside the district because of the opportunities it is able to offer, Sousa said. “We have 20 different towns sending their kids here because of the high-quality experience. How will we maintain that when we have to cut those courses back?”
Improving education is not a driving factor in H.454, Sousa summarized emphatically. “That is not what this piece of legislation is about,” she said. “This piece of legislation is to demonstrate an interest in reducing taxes.”
But even on that merit it may fail, she explained, as many of the most economically distressed areas will actually see tax increases under this legislation — forcing them to move out. Reduced educational and extracurricular opportunities will also force others to move out. And a further decrease in population will drive taxes up. “That’s what I’m most concerned about for our region… in our community, people are going to leave. They’re going to go to New Hampshire, they’re going to go to private schools… They will take their money and go. We’ve maintained our enrollment in the district because of the high-quality education our students receive, both in elementary, middle school, and high school. If we cut those programs — all of our AP classes, our electives, our after-school programming — we know what’s going to happen to our student enrollment, and when we cut down our enrollment numbers, we significantly impact our tax burden.”
Speaking up
When asked what residents should do if they don’t like the direction of H.454 — whether because they oppose tax increases or underfunding local schools — Sousa encouraged folks to contact their senators. “The pressure needs to come from our communities. It can’t just be a subgroup of superintendents.”
