The future of Vermont’s education system again hangs in the balance as lawmakers return to Montpelier this week to reconsider a sweeping law that would change how the state funds and governs public schools.

Six months ago, Republican Gov. Phil Scott and Democratic leaders in the House and Senate stood together at a bill-signing ceremony in Montpelier to celebrate the passage of Act 73. The landmark law launched a multi-year plan to consolidate Vermont’s 119 school districts into five regional governance hubs and ultimately shift control over school spending from local boards to the state.

“While this session was long and difficult and uncomfortable for some, we were able to come together and chart a path towards a system that better serves our kids and one that taxpayers can afford,” Scott said in July.

But that path may no longer be politically viable in 2026.

The critical first phase of Act 73 — mandatory school district mergers — has ignited fierce opposition in communities across Vermont. That resistance got amplified last month when a task force appointed by the Legislature to draw new district maps rejected the premise of forced consolidation altogether.

In its final report, the group cited “strong concerns about student wellbeing, loss of local control, transportation burdens, rural equity, and a process perceived as rushed or unclear.”

Cornwall Rep. Peter Conlon, the Democratic chair of the House Education Committee, said lawmakers now have to confront the possibility that Act 73 no longer has the political support needed to move forward as originally envisioned.

“Whether state-imposed larger districts would pass the General Assembly I’d say is questionable,” Conlon said. “To be very honest, we’re still wrestling with the question of what the best way forward is.”

A new plan to rein in school spending

The seeds of Act 73 were planted on Nov. 5, 2024, when Vermont voters punished House and Senate Democrats at the ballot box following an average 14% property tax increase driven by education spending.

Republicans made historic gains in both chambers, shifting the balance of power and forcing Democratic leaders to negotiate an education reform compromise with Scott, despite significant resistance within their ranks.

Senate President Pro Tem Phil Baruth said he remains hopeful lawmakers can still move forward with district consolidation. But the Chittenden County Democrat acknowledged that the task force’s refusal to produce new maps has delayed implementation by at least six months to a year.

That delay also pushes back the rollout of Act 73’s centerpiece: a new “foundation formula” that would give the state the authority to set per-pupil spending levels for every public school in Vermont. Lawmakers view the formula as the primary mechanism for curbing education spending, which has increased by $850 million over the past decade.

With property taxes projected to rise another 12% on average this year, Baruth said taxpayers can’t afford to wait. He plans to introduce legislation this week that would impose hard caps on school budget increases ahead of Town Meeting votes in March.

“Now that we have this delay, I think it’s very hard to say that anything is going to produce savings within the next three or four years,” Baruth said. “So I started thinking about, ‘How could we reduce the rate of growth in the education system quickly?’”

Baruth said he has not yet settled on a specific allowable growth rate. He said the growth caps would be in effect for the next two fiscal years.

The proposal has drawn swift pushback from school officials. Sue Ceglowski, executive director of the Vermont School Boards Association, said budget increases are largely driven by rising health insurance costs that boards can’t control.

Imposing hard caps, she warned, would force districts to cut core student services. And she said the proposal comes as school boards put the finishing touches on spending plans they’ve been carefully crafting for months.

“Imposing hard caps on those same school budgets would inject chaos and confusion into the budget process, possibly postponing budget votes until later in the spring,” Ceglowski said.

House Speaker Jill Krowinski echoed those concerns. While she acknowledged the need to address what she called “unsustainable” property tax increases, the Burlington Democrat warned against a last-minute mandate.

“I am concerned that a last-minute pivot to new (a) school budget construct will upend communities and lead to rash decisions that will have a negative impact on our Vermont kids,” Krowinski said in a written statement.

Redistricting or bust?

It’s now up to the Legislature’s education committees to redraw school district maps, though neither has a clear plan for how to proceed.

“The task force, whether you agree with them, don’t agree with them … it set the process back,” said Bennington County Sen. Seth Bongartz, the Democratic chair of the Senate Education Committee. “And so we’re going to have to regroup and figure out the path forward.”

Bongartz said he remains supportive of redistricting but warned lawmakers not to let opposition derail broader funding reforms.

“The funding formula that we have right now is not working, is not going to work, and is putting Vermonters in a position where they can’t afford to pay their bills, so we must fix the funding formula,” he said.

The governor, however, insists that no aspect of Act 73 can fall into place until and unless the Legislature votes to approve new district maps.

Jason Maulucci, the governor’s director of policy development, said the foundation formula depends on economies of scale that only larger governance structures can provide. Act 73 also envisions major reforms to special education, pre-kindergarten, and career and technical education, all of which, he said, require larger administrative units.

“We don’t see a scenario where the foundation formula that we established last year would work well at all with 119 districts of significantly different sizes,” Maulucci said. “They need the protection of scale in order to make the best budget decisions given the funding that will be provided them.”

A different path

Jericho Rep. Edye Graning, the Democratic co-chair of the School District Redistricting Task Force, was one of several lawmakers who drew the governor’s ire for failing to deliver new district maps.

She said lawmakers’ response to the group’s work has been far more positive.

“We have had more often than not an incredibly positive response to what we did, which feels much better than some of the other responses we got from the administration,” Graning said.

Instead of forced mergers, the task force recommended voluntary consolidation and the creation of “Cooperative Education Service Areas,” which would allow districts to share services such as special education, transportation, and IT.

Graning said the task force heard from thousands of Vermonters and received a clear message.

“Don’t try to jam through massive redistricting without public input and without creating trusted bonds within our communities,” she said. “It was almost a unanimous voice across the state saying, ‘Please do not close our schools, but also we know that there is some reform that is needed, but please do so slowly and deliberately and thoughtfully.’”