Chairwoman Kornheiser outlined her “three-legged stool” framework of FY2025 (short term) changes, FY2026 (medium term), and long-term solutions on Thursday in the House Ways & Means Committee. She also pointed to needing to balance equity, local control, and simplicity/complexity.

Sue Ceglowski (Executive Director, Vermont School Boards Association) and Chelsea Myers (Associate Executive Director, Vermont Superintendents Association) led the testimony, which focused on:

1. How to set the yield this year (FY2025).
2. Long term reforms, starting in FY2026, which need to be passed this session.
3. Long term reforms in taxation and spending that can be passed next year.
4. Changes to education spending to make it more efficient and effective.

Their first request to the Committee was to find as many offsetting revenues as possible to buy-down property tax rates. Their suggestions for possible sources included a cloud tax on software and General Fund revenues for universal school meals.

They pointed to longer-term reforms that they recommend:

• Health care costs, which increased 16.4% this year. They claim that the statewide negotiating process has “not been successful in slowing the rate of growth.”
• Mental Health supports – they point to a “decrease in capacity of mental health organizations to keep up with growing needs in schools” which is creating a cost shift, they claim. They suggest creating more capacity for alternative placements.
• A statewide teacher contract. NOTE: If statewide healthcare bargaining hasn’t controlled cost, why would statewide salary & benefit negotiation be different?
• Explore the possibility of early or “on-time” retirements to draw down staffing levels.
• Staffing ratios were mentioned as they pointed to Meagan Roy’s testimony in the House Education Committee the previous day. They pointed to her quote around small class sizes “a look in this area shifts the focus to ensuring quality instructional experiences for students - something that can be negatively impacted by very small class sizes.”
• Expand the central office staffing to meet “growing requirements.”
• Invest additional state funding towards “newer and fewer” school facilities. They suggested the Legislature begin addressing the most critical needs identified in a recent report. To take pressure off school budgets, urged legislators to consider establishing a School Facilities Emergency Grant Fund with a minimum of $30M.
• Expand special education block grants – they argue that special education costs have gone up, partially due to Act 173.

NOTE: It is unclear how increasing the Agency of Education staffing levels will decrease education spending overall unless we shift some administration at the Supervisory Union level up to the statewide level. Similarly, construction aid and expanded special education grants likely increases overall spending instead of holding it in check. What these mechanisms would really do (like new revenue sources) is shift the tax burden away from local tax rates. The same tax rates that hold local spending in check.

It was noted on healthcare costs that “there are aspects of the bargaining framework that were put in place that have contributed to year-over-year double digit growth.” Some proposals from a 2021 bill, H.63, were fairly substantial in their opinion. The timing of March Town Meetings, yield letters notifying school boards of their taxing capacity, and the April staff bargaining process was difficult.

Read their full testimony.

H.630 was also pointed to by Myers as an important tool for “cooperative education services” that can help with collaborative efforts (between school districts) to address alternative education placement needs for significant mental health issues. She asked the Committee to support this bill.

Kornheiser complimented that their testimony “covered so many subjects and broad policy areas.” She questioned whether they were requesting that mental health and $30M in school construction to be moved out of Education Fund, wondering how they suggested these should be funded. Neither Ceglowski or Myers had a suggestion, but they indicated they “could discuss and attempt to bring recommendations back.”

Representative Anthony, who listened to House Education Committee testimony yesterday, wanted to know more about their testimony requesting the Legislature to “be more prescriptive” in several areas. He added that Education Commissioner Rick Mills cautioned “be careful what you wish for” when creating an Agency of Education in the Executive Branch. He asked if that model was working. Both witnesses remained silent but Representative Ode blurted out “NO.”

Myers noted that the Vermont Superintendents Association (VSA) is advocating for some bills that would review the composition of the State Board of Education and also revert back to a Commissioner model. NOTE: This would put Superintendents more in the driver’s seat in our education system.

Kornheiser wondered what they meant by transparency. Myers says local communities are not getting clear answers from state and local leaders about the system because it’s so complex and transparency would help. Kornheiser asked specifically what we would gain. Myers pointed to the building of budgets and the timing of setting tax rates.

NOTE: We actually agree here. The real transparency issue that has contributed to the upward trajectory of education spending over the past few decades is that voters don’t have the information to understand how their votes on school budgets impact tax rates and whether changes in tax rates are the result of state policy or local spending.

Representative Beck brought the Committee back to the bigger picture, saying that “our staffing ratio is about 4:1 and of it was 5:1 we would have piles of money.” He sees that as the goal, wondering how we get to 5:1. Myers disagrees, saying that VSA is not in favor of that approach and favor’s goal setting based on instruction via class size not staffing ratios only.

NOTE: This may be because overall staffing ratios include superintendents and other administrative staff that these organizations represent.

Kornheiser commented, regarding minimum class sizes, that “if we are going to get through this we are going to need to put really hard ideas on the table and work through them.”  She continued, “what are the carrots or the sticks? It seems the crux of this as the only carrot we have is the yield number… how do we motivate that kind of change at school district level with the tools we have at the state level?”

Myers suggested the schools facility needs are an opportunity and can be used to incentivize consolidation and change generally. Ceglowski nodded in agreement.

Representative Mattos referred to the Agency of Education testimony they heard around FTEs going up and enrollment dropping. He noted that 450 FTEs had been added related to one-time ESSER funds. “We really have to look at… the nuts and bolts of classroom sizes because 80% of your budget is the people in the building,” he added.

Kornheiser wondered about attrition rates and early retirements and how that may play out mathematically. She asked if new hiring actually saves money or does it create an inflation rate of new hire salaries.

Ceglowski commented that they have long standing policy of staff reductions of teachers nearing retirement versus new hires, but due to “present economics” she suggested an economist look at these.

Beck added to his earlier comments, stressing that it’s not just class size at this point “it is all the other employees that have been piled on.”

Jeff Fannon (Executive Director, VT-NEA) took the chair next. He urged the retention of income sensitivity in the property tax system as it protects working people. He supported the Committee’s concept of not having the “homestead and non-homestead rates increase at the same percentage” but shares their concern about the impacts of that for renters.

He believes increased “multi-homeowner rates” should be explored, despite the technical issues, and urged legislators to start taxing them at a higher rate as soon as possible. He also wants to see them segregate costs in the Education Fund and consider separate funding streams for construction, social services, mental health, etc.

He asserted that designated agencies (which are responsible for mental health support) have “all but collapsed” in the state. To support this, he pointed to areas of the state experiencing 8+ week wait times.

The NEA strongly supports Boards of Cooperative Education Services (BOCES). Vermont is one of nine states that provides no statutory authority for school districts to build these. Cooperative services, at a higher level, has been discussed in House Education Committee in order to allow for alternative placement services for severe mental health and even vocational training and bulk purchasing of supplies.

Construction has to be dealt with, he argued, and new dedicated revenues are needed. He suggested suing the companies who manufactured PCB materials in our current school buildings as a funding source. He also suggested they reverse the trend in housing demographics by identifying a dedicated revenue source for that as well. 

Another revenue source he offered was increasing the estate tax again.