January 10, 2026 Legislative Update

Here it is... the first legislative update of the year!

Lawmakers dusted off major 2025 reforms, such as last year’s landmark economic and workforce bill, S.122, which continues to steer targeted grants and training dollars to small businesses and high-demand fields, positioning Vermont to compete for workers and employers in a tight regional market. Legislators also began early discussions around how the new, long‑term CHIP infrastructure and housing finance program can be deployed on the ground. The program has the potential to channel up to $200 million per year into local infrastructure that supports new housing and grows the tax base.

Housing and pocketbook issues were front of mind in many committees as legislators figure out how to adjust for slowing state revenues and an education spending crisis that is sucking the air out of the room. If they try to buy-down property taxes with one-time monies, like last year, they will need over $200 million to make the Education Fund whole. The General Fund, (where most of those one-time monies came from last year) is also facing challenges with structural growth rates (mostly negotiated salaries and benefits) exceeding underlying revenue growth. This is compounded by the fact that some federal funds are going away. The Transportation Fund is also facing challenges with over $30 million in projected revenue shortfall, putting federal matching funds at risk.

Of course, the big event this week was the Governor's State of the State address. He used the opportunity to focus almost exclusively on one topic (education reform) which is rarely done. There is good reason to, education spending has increased 46% since 2019 and property taxes are, well, taxing family budgets. Rising costs ripple through families, workers, and communities, deterring young families from staying, hindering home ownership, and constraining business growth. The Governor frames these costs as the consequence of a system designed for an era that no longer matches demographic and enrollment realities. The Governor is right about what the issues are, insisting that temporary fixes (“band-aids”) cannot substitute for structural changes that will reduce overall costs and improve outcomes. The current structure is inequitable due to funding formulas that do not align with actual student needs and large disparities exist between districts in course offerings, languages, and graduation credits.

One quote in particular jumps out at me, “It’s time to let go of what we think is best, and focus on what the data actually shows is best.” Yes, yes it is. After correctly identifying the multiple issues our education system is facing and backing that up with data and research-backed policy he then takes a turn back towards "what we think is best" for the prescription to fix our ailments. Massive forced district consolidations have been tried, multiple times, here in Vermont and elsewhere. It hasn't worked and, in some instances, has actually increased costs. Consolidation of services is necessary, but bigger districts do not mean lower costs or better outcomes.

More to come on education reform, this will be one of our major focuses this session. In other news, since very little new legislation has been introduced yet (although the deadline to do so is January 29th), this week we are highlighting some of the key pieces of legislation that passed during the 2025 legislative session (see below).

On behalf of Vermonters,