Good Evening Chair Kornheiser and Members of the House Ways & Means Committee,

There has been some discussion in committee this week about the impact on the foundation formula if districts are left at their current size. This has sparked concerns about viability for small districts, but I would content that the viability of the entire system in jeopardy.

The bill, H.955, advances the next phase of Vermont’s education system transformation by creating regional cooperative educational service areas (CESAs), requiring all districts to participate in structured studies of possible union school district formation, delaying major parts of the State’s broader education finance transition, and commissioning further work on prekindergarten funding, education governance, shared services, district reorganization, education finance, and early childhood access.

The bill, H.949, sets Vermont’s fiscal year 2027 (2026-2027 school year) education property tax calculation (known as the yield amount), uses one-time funds to moderate near-term tax increases, and makes several technical education finance changes.

Good Morning House Ways & Means Committee,

Thank you for your work on the new foundation formula, this will be an important step forward for education policy in Vermont by reducing the complexity of the current system and providing transparency and predictability to voters about how the school budgets they vote on will impact their tax bills.

Chairwoman Kornheiser outlined a list of reasons that have led to the moment and need for a joint hearing of the House Education and Ways & Means Committees this week. School budgets have a “rough road to passage this year,” she argued, and even with the default budget that takes effect July 1^st, districts will still eventually need to pass a budget. She is concerned that budgets may never pass. Additionally, the statute regarding tuitioning districts may have a little bit of conflict with itself.

She explained that after conversation with Chairman Conlon “and the field” (likely the interest groups representing school administrators) she sat down with the Joint Fiscal Office and Legislative Counsel to develop a set of scenarios as a starting point for discussions.

The House Ways & Means Committee walked through changes to H.629 with Legislative Counsel on Thursday morning. The bill would address a number of issues that arise from natural disasters impacting a property. For example, the rapid devaluation for tax purposes or the inability to pay property taxes or utilities because of repair costs.

Most of the Senate Changes were technical in nature and included updates to some of the definitions in the bill. The main sticking point for the Committee was around the interest rate charged for delinquent taxes and other bills. The House version charged 0.5% per month while the Senate Version charged 1%.

The House Ways & Means Committee met first thing on Tuesday morning to begin reviewing proposed amendments to H.887, which sets the property tax rates for FY2025.

On Tuesday morning, the House Ways and Means Committee heard from Morgan Daybell, who was representing all the administrative groups in the education system. He noted that they felt that the funding and policy discussions should not be separated, and the same Commission should be responsible for both. They approve of the cloud tax and the short-term rental surcharge and “anything else” that would increase the statewide yield amount.

Chairwoman Kornheiser opened the House Ways and Means Committee meeting on Tuesday by saying, ”we have put a bunch of big ideas out into the world because that is the only way can get work done right? Someone has to put something on paper for people to react to… and it’s fairly intense…. It does not mean these are hills we want to die on. It’s a necessary part of the process.” She noted that the draft yield bill has “multiple decision points” that range through FY2027.

Chairman Conlon introduced the topic of the day, which was to solicit ideas from legislators about how to address the education crisis.