Gov. Scott proposes sweeping education property tax reforms for Vermont: How it will work

Gov. Phil Scott’s highly anticipated “bold” plans to reform the education property tax system were revealed on Jan. 22 — the most notable among them to completely redesign the funding formula and condense Vermont’s 52 school districts and supervisory unions into just five regional districts.

During the almost 50-minute presentation, Secretary of Education Zoie Saunders and Tax Commissioner Craig Bolio pitched the ambitious proposal as a way to make Vermont’s infamously complicated and expensive property tax system more affordable, transparent and predictable, while also improving education quality and equity.

Scott’s proposal comes after years of historic property tax increases, which hit a tipping point last year with an almost 14% jump, Saunders said. In response, an unprecedented 33% of school budgets failed to pass in 2024, especially in less wealthy areas of the state. Vermonters also showed their frustration when they voted in November to reduce Democrats’ legislative power from a supermajority to a slim lead in both the House and Senate.

“There is an urgency to act,” Saunders said.

Scott’s plan received initial positive reactions from House Speaker Krowinski (D-Burlington) and Senate pro tempore Phil Baruth (P/D-Burlington), who in a joint statement thanked the governor for his proposal and said committees in both chambers would pour over it and listen to community feedback in the coming weeks.

The Vermont-National Education Association (NEA), however, criticized the governor’s plan as “big on rhetoric but short on the details.”

“It doesn’t explain how these changes would be better for students,” the NEA said in a statement. “It doesn’t simplify an overly complex school funding system. And it doesn’t provide immediate and ongoing property tax relief for middle-class Vermonters.”

How would this change local school districts?

Scott’s plan seeks to simplify the governance structure of Vermont’s public school system — paring 52 school districts and supervisory unions down to five regional districts — which both Saunders and Bolio say would reduce redundancy, improve efficiency and free up funds for higher priorities, such as increasing teachers’ salaries.

Under the five-district model, each regional district would have one school board with elected members serving in paid part-time roles. Every district would have one central office with “robust” staff, Saunders said.

To maintain local influence under the new model, each school would have a school advisory council comprised of caregivers, educators, staff and students.

What are the five education regional districts?

Vermont’s five regional districts would be divided into the Champlain Valley district, Winooski Valley district, the Northwest region, the Southwest region and the Southeast region.

Each district would support between 10,000 to 15,000 students, except for Champlain Valley (where Chittenden County is located), which would support just over 34,000 students.

How does Scott think this will make schools more equitable and affordable?

Saunders said that Vermont’s current system fails to provide “equitable education for all,” especially for children who are economically disadvantaged, English learners, and children with special needs. But there are also disparities in Vermont’s system based on geography, with schools in poorer areas fielding fewer courses, credits and experienced staff members than wealthier areas, which in turn impacts performance outcomes, Saunders said.

Under the current property tax system, voters decide how much funding their individual communities need and the state raises it through statewide taxes, a system that does not incentivize voters from wealthier areas (who can afford higher taxes) to trim bloat from their budgets, Bolio said.

“The worst part is the lowest-spending, highest-needs communities struggled the most to pass their budgets,” Saunders said.

The new proposed funding formula, called a foundation formula, would put the legislature in charge of setting a base spending rate for each student, with added weights to balance the needs of traditionally disadvantaged students. If some districts want to spend more than what the state proposes, they can do so on an individual level.

“The biggest takeaway is the ability for us to ensure our students receive the same level of resources to meet their needs regardless of geography,” Saunders said.

How much that base rate will be has not been publicly released yet, but will be “very generous” in comparison to other states, while also affordable, according to Saunders.

Megan Stewart is a government accountability reporter for the Burlington Free Press. Contact her at mstewartyounger@gannett.com.