State News

Education spending ticks down as state gets affirmation of what’s driving costs

By Ethan Weinstein/VTDigger



The latest data from the shows a small decrease in projected education spending and affirms previously anecdotal evidence on the major factors causing a projected increase in education property taxes.

Health care costs, construction, special education, disappearing federal money and increased salaries are all contributing significantly to a projected $230 million increase in education spending, from $1.71 billion in fiscal year 2024 to $1.94 billion in fiscal year 2025, according to the agency’s survey. 

While budget information from late January and early February indicated that the average education property tax bill was projected to rise 19%-20%, many are hopeful that will be revised down as a result of school districts shaving money from their budgets, as well as updated education fund data.

Nicole Lee, the agency of education’s director of finance, presented the results of a survey Feb. 27, which asked districts about costs related to special education, construction, federal dollars, mental and behavioral health, school staff and staff benefits. 

More than 80% of supervisory unions and districts responded to the survey — 43 of 52 — and Lee acknowledged that the data is highly preliminary and subject to change and potential errors, she said in testimony to the House Ways and Means Committee. The data also doesn’t account for the number of students in each district, though Lee said both big districts and small districts replied. 

Takeaways from the data include:

The total cost of special education is projected to have increased about 30% in the last three years.

Construction spending is projected to rise 32% year over year, with a drop in money coming from capital reserves, and more money coming from bonds. 

Costs related to retaining staff once paid for by federal funding increased more than 150%, a total increase of about $15 million in the districts that provided data. 


Total full-time employees remained essentially level year over year, though salaries increased about 8% and benefits increased 33%. (Lee warned these numbers require the most additional review and may reflect a greater-than-reality jump.)

Surveyed districts have added funding for 648 full-time staff related directly or indirectly to mental and behavioral health in the most recent three budget years.

As part of ongoing conversations about how the state could lower education property tax bills, the committee also considered the impact of a “cloud tax,” which would remove a sales tax exemption for software programs stored and accessed over the internet.

The tax, which would raise a projected $20.4 million next year, would bring down the average education property tax bill increase 1.4%, according to modeling from the Joint Fiscal Office. 

“It’s not surprising but just discouraging how adding $20 million moves the needle so little,” said Rep. Katherine Sims, D-Craftsbury. “The magnitude of this challenge is … enormous.”

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