Governor—s office urges faster H.454 rollout, warns against higher spending and 10% supplemental cap

At a conference committee meeting on H.454, Jason Malucci, the governor's director of policy development and legislative affairs, told conferees the administration supports transitioning Vermont to a foundation funding formula but objects to proposals that would raise overall spending and allow districts a 10% supplemental levy under current cost levels.

Maluci said the administration views the moment as a "rare once in a generation opportunity" to reform education funding and governance, but cautioned that "we cannot spend more than we are today because Vermonters can't afford it." He said the governor would prefer the new governance and funding changes to begin in fiscal 2028 rather than a longer transition and asked committees to account for all costs, including special-education and career-technical education governance changes.

The governor's office highlighted three central concerns: affordability of any new spending level, the timeline for implementing governance and funding changes, and geographic equity if the state moves to a single homestead rate. Maluci said Vermont is already among the nation's highest per-pupil spenders and argued the state must be "smarter about how we invest those dollars." He warned that a uniform homestead rate could increase property-tax pressure in areas that currently have lower-than-average tax rates.

On supplemental district spending, Maluci said the governor's original plan allowed a 10% supplemental but that was proposed in the context of lower overall spending and a five-district model with relative property-wealth parity. "If we're spending at levels that are more in line with what we're currently spending, we have concerns about affordability with allowing a 10% supplemental over the top," he said, adding that the Department of Taxes has offered technical feedback on ways to mitigate those affordability concerns.

Maluci urged a quicker redistricting timeline and said the governor supports a summer task force that could produce a consensus map for an up-or-down legislative vote in January. He said knowing district boundaries is critical for decisions about local elementary schools, central middle schools and regional high schools, and that the governance transformation must accommodate regions that currently tuition students to other districts.

The administration also pushed for an "evidence-based" approach to link state funding with clear expectations for how districts use new resources. Maluci listed priorities he said should guide spending in a transition: expand early-childhood programs, increase after-school and summer opportunities for underserved students, broaden access to diverse coursework and arts, expand student mental-health services, strengthen college- and career-pathways beginning in middle school, and raise teacher pay.

On special education, committee members asked how to lower extraordinary special-education costs that have grown rapidly. Maluci said the administration believes many of the policy solutions for extraordinary special-education costs "are in the hands of the administration" rather than the legislature and that the Agency of Education (AOE) will need additional capacity to help manage transitions and costs. He noted the senate version of H.454 included funding for positions to support transition work and that the governor had included $4 million of one-time funding for related positions in the executive budget; he said some of those positions may be limited-service while others could be needed beyond a single year.

Maluci said the governor is open to the senate's two-step approach for recognizing independent schools' role in public education (a compromise from the governor's original 51% threshold), referencing a 25%-plus-location-criteria formulation under consideration.

Committee members pressed and sought clarifications on implementation sequencing, the role of the legislature in redistricting, and technical questions on special-education funding and AOE staffing. Maluci offered to bring AOE and Department of Taxes staff for more technical discussion as needed.

No formal motions or votes on H.454 were taken during the portion of the meeting reflected in the transcript; the discussion closed with the administration expressing optimism for a bipartisan path forward but noting the changes will be disruptive and require significant work to implement.