Vermont’s education system has long grappled with balancing efficiency, equity, and local control. A recent Yale thesis by Grace Miller, titled Evaluating the Impact of School District Mergers in Vermont: Fiscal Reallocation, Equity, and Community Perspectives, provides a comprehensive analysis of the state’s school district merger initiatives from 2010 to 2020. The study examines the fiscal and operational impacts of these mergers, prompted by Vermont’s Act 153 and Act 46, and offers insights into their implications for educational equity, community dynamics, and future consolidation efforts.
In this blog post, I’ll summarize the key findings of Miller’s study and analyze them in the context of Act 73 (also known as H.454), a 2025 legislative measure that modifies the state’s education funding formula and pupil weighting system and created a task force to consolidate Vermont's school districts into 10-20 new governance structures. This analysis explores how Act 73 interacts with the outcomes of the merger process and its potential to address the challenges identified in the study.
Background and Methodology
Miller’s study focuses on Vermont’s school district mergers, driven by Acts 153 (2010) and 46 (2015), which aimed to streamline educational governance, improve equity, and achieve cost efficiencies by consolidating the state’s fragmented district structure. In 2010, Vermont had 273 school districts, averaging just 309 students each, leading to supposed inefficiencies and inequities in resource allocation. The mergers, both voluntary and mandated, reduced the number of districts by over 150, creating unified union school districts to enhance operational scale and equity.
The study employs a difference-in-differences methodology across a panel of 109 districts, analyzing fiscal data (spending, budget allocations, and tax rates) and supplementing it with qualitative data from interviews and surveys with 14 administrators and 7 superintendents. This mixed-methods approach provides a nuanced view of the mergers’ financial, operational, and community impacts.
Key Findings
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Fiscal Impacts:
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No Significant Change in Overall Spending or Tax Rates: The study found no substantial impact on per-pupil spending or its growth rate post-merger. Tax rates also remained largely unaffected, with a minor decrease observed only in the first year post-merger, likely due to financial incentives for consolidation.
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Reallocation of Funds: Mergers led to significant shifts in budget allocations. Merged districts reduced spending on administrative support and contracted services by $386.87 and $2,168.60 per pupil, respectively. These savings soaked up by increases to salaries and benefits ($1,121.13 per pupil), teacher and student supports ($374.27 per pupil), materials ($87.65 per pupil), and transportation ($166.14 per pupil). This reallocation represents 6.5% of the average budget for merged districts (meaning that 93.5% of spending remained unchanged).
NOTE: One of the main reasons for increases in staffing costs is because teacher contracts were often leveled up to the highest rate in the new district (i.e. no one wanted to take a pay cut so the solution was to bring everyone up to the most generous compensation rate).
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Equity and Operational Impacts:
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Administrators reported a shift in school board discussions from individual school needs to district-wide priorities, facilitating equitable access to curriculum and resources. Mergers also spread costs for capital construction across a broader tax base, easing financial pressures on smaller districts.
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Shared hiring of staff, such as French teachers or athletic coaches, enhanced program offerings and may have saved costs by reducing redundancies.
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Community Perspectives:
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The qualitative data revealed mixed experiences. Half of the administrators reported financial benefits, such as cost savings and support for smaller districts, while the other half noted minimal savings due to logistical costs or diseconomies of scale.
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Concerns about loss of local control were prevalent initially but diminished over time for the majority of respondents as districts embraced a collective identity.
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Some administrators highlighted challenges, including increased transportation costs and reduced community engagement due to larger, less personalized governance structures.
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Limitations
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The study notes potential response bias in qualitative data, as administrators with strong opinions may have been more likely to participate.
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The variability in merger outcomes suggests that implementation strategies significantly influence success, but the study lacks detailed data on student achievement impacts.
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The assumption of parallel pre-merger trends in the difference-in-differences model may not fully account for non-linear socioeconomic changes, though Vermont’s legislative mandates mitigate selection bias.
Analysis in the Context of Act 73
Act 73 complements and extends the objectives of Vermont’s merger initiatives by addressing some of the challenges identified in Miller’s study while introducing new considerations:
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Enhancing Fiscal Equity:
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Miller’s study highlights that mergers did not significantly reduce per-pupil spending or tax rates but improved equity by redistributing resources and spreading costs across larger tax bases. Act 73’s revised pupil weighting system has the potential to address funding inequities by ensuring that districts with higher-need students actually receive adequate resources.
- While Act 73 acknowledges the lack of dedicated construction funds to alleviate aging infrastructure, it does little to actually address it. Miller pointed to larger tax bases through consolidation as one method of allowing for infrastructure modernization, but another one would be for the state to restore the statewide supports for school construction.
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Mitigating Diseconomies of Scale:
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Miller’s study identifies increased transportation costs and logistical challenges as potential diseconomies in merged districts. Act 73’s focus on equitable funding could indirectly address these by providing resources to optimize transportation logistics or hire shared staff, as seen in the study’s example of shared French teachers. However, Act 73 does not explicitly address transportation, suggesting a need for targeted policies to complement its governance reforms.
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Balancing Local Control and Statewide Goals:
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The study highlights tensions between local control and statewide funding, with administrators noting challenges in securing community support for budgets in high-poverty districts. Act 73’s foundation formula aims to reduce disparities in local tax burdens, potentially easing these tensions.
- The study noted limited cost benefits from consolidating school districts. Act 73 relies on the same thinking around economies of scale that Act 46 did, that larger governance structures should inherently reduce costs, but this report as well as regression analysis done by Campaign for Vermont demonstrates little evidence for this approach.
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Need for Clear Policy Goals:
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Both the study and Act 73 underscore the importance of defining clear educational objectives. Miller’s study critiques the lack of consensus on what constitutes “equitable student outcomes,” which complicates merger evaluations. Act 73’s focus on empirical pupil weights is a step toward clarity, but its success depends on aligning these weights with measurable outcomes, such as graduation rates, test scores, or civic engagement, as suggested by the interviews in the study.
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Implications and Recommendations
Miller’s study reveals that Vermont’s school district mergers achieved modest fiscal reallocation and equity improvements but fell short of significant cost savings due to implementation variability and diseconomies of scale like transportation costs and leveling up staffing contracts. Act 73 addresses some of these issues by refining the funding formula and contemplating infrastructure, but its effectiveness will depend on:
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Community Engagement: To address concerns about local control, Vermont should invest in transparent communication about Act 73’s pros and cons, learning from the study’s finding that community buy-in improved over time in merged districts.
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Right-sizing: Two different quantitative studies have now indicated that larger districts do not inherently lead to cost reductions. There is also evidence that they do not inherently generate better outcomes. Diseconomies of scale eat away at possible cost savings and the loss of community connections threaten to further unravel our education system.
Instead, a balance should be struck where school boards can gain economies of scale through shared services with other districts but don't have to give way to larger regional boards and staffing contracts that are unlikely to yield better results than Act 46.
Further, when we talk about "right-sizing" our education delivery system, we should be looking at staffing levels not governance structures. We know that the vast majority of cost is staffing and that there districts of all sizes that have low staffing ratios. If we truly want to bend the cost curve, this is unfortunately where we need to look.
- Further Research: The study calls for examining mergers’ impact on student achievement. Act 73’s data-driven approach could support such research by providing standardized metrics for evaluating outcomes across districts.
Conclusion
Grace Miller’s thesis offers valuable insights into the complex impacts of Vermont’s school district mergers, highlighting their role in reallocating resources while underscoring challenges like diseconomies of scale, staffing costs, and community resistance.
Act 73 differs from Act 46 by refining the funding formula to prioritize tax stability, but its success hinges on addressing the local control concerns identified in Miller's study. Policymakers should leverage the study’s mixed-methods approach to inform Act 73’s rollout, ensuring that fiscal reforms translate into tangible improvements for students and communities.