Agency of Education requests $4 million one‑time appropriation to support education transformation in FY26

The Agency of Education asked the Senate Appropriations Committee on March 21 to include a one‑time $4,000,000 appropriation in the FY26 budget to fund work tied to the governor’s education transformation proposal, agency leaders said.

"We implement state and federal laws, policies, and regulations so that all Vermont learners have equitable access to high quality learning opportunities," said Jill Bruce Campbell, interim deputy secretary of education, as she opened the agency overview and budget briefing.

The request came as the agency presented a recommended FY26 budget of about $2.6 billion, down roughly $47.5 million from FY25, driven primarily by the expiration of pandemic‑era federal funds. The agency said the ARP ESSER and other COVID‑era programs supplied roughly $500 million in education funding beginning in 2020; the last of those funds ended Sept. 30, 2024. Sean Klooza, interim chief financial officer, told the committee federal grants and contracts drop sharply in FY26 as those funds wind down.

The $4 million one‑time request would fund three broad program areas the agency described as priorities for managing transformation: financial transformation and budgeting support, education quality and accountability, and school board and governance support. Campbell told the committee the agency proposes five new permanent positions to be embedded in the agency and to work in the field, supplemented by time‑limited consultant contracts to help districts integrate accounting, HR and student information systems, and to support curriculum, assessments and data integration.

Agency staff said the FY26 position work would focus on an audit of district systems and convening districts for integration work; the agency signaled a multiyear transformation timeline and set July 1, 2027, as a target date in its planning documents for a governance and foundation formula milestone. "This period of transition may be really disruptive to student learning and teaching, and we want to ensure that we are not only not disrupting that, but ultimately strengthening those areas of support," Campbell said.

Committee members asked for specifics about the scope and timeline. A committee member asked whether the goal was a single statewide financial system; the agency said the initial FY26 work is system‑agnostic audit and integration planning, and that a decision about statewide platforms would follow after that work. The agency characterized the five positions as permanent additions to the agency that would be part of the base in subsequent budgets, while consultant work was described as largely 12–18 month engagements tied to deliverables.

Committee members and the agency also discussed facilities and consolidation. The agency said one proposed position would support facilities planning and interdistrict realignment work, and it acknowledged the potential need for extended community engagement and supports if consolidation or realignment moves forward. A lawmaker with experience in local consolidation cautioned that emotional and cultural support for students and communities can be essential during school reconfiguration and said such supports should be planned earlier in the process.

Other FY26 budget requests and details presented to the committee included: - $50,000 requested for emergency meal sites to support mass feeding in statewide emergencies, explained as a roll‑forward fund similar to emergency construction funds. The agency said this addresses the lack of budgeted funds to enable school staff to prepare/distribute meals during disasters. - $45,000 shifting from another department (recorded as a DCS line originally) and $30,000 for the agency’s portion of costs associated with bill F264 (described in the testimony as providing coordinated services for youth with disabilities). The agency’s memo lists those smaller line items in the FY26 ask. - A request for liquidation extension authority for about $15,000,000 in ARP ESSER funds so districts can extend contracted services and complete projects delayed by labor and supply issues; agency staff said those re‑allocations have been submitted to and approved by the U.S. Department of Education (USED) and are expected to continue under a revised federal review process.

Agency leaders highlighted cost pressures in local budgets, including rising health insurance costs (business managers cited employer benefits approaching 41% of payroll in some districts) and increased special education and student support service needs that are shifting costs to local budgets. The agency said statewide special education costs exceed the state’s direct special education appropriation by an estimated $110–120 million held in local budgets and called special education delivery reform a major area for sustained attention.

No formal budget votes were taken during the hearing; the items were presented and discussed. Agency staff said they would provide additional materials to the committee, including an inflation‑adjusted education fund graph and a detailed written memo describing the $4 million proposal and job descriptions for the five positions.

What’s next: The agency said its transformation planning will produce a year‑by‑year punch list with dependencies tied to the larger transformation bill (H.454) and referenced Act 173 work on special education as related policy background. The committee asked for the written materials and indicated it would review the proposal in the coming budget deliberations.

(Reporting note: direct quotes are attributed to named speakers appearing in the committee transcript.)