Vermont education officials warn federal budget uncertainty could cut school funding, stall ESSER reimbursements and affect school meals

Anne Bordenaro, director of federal programs at the Vermont Agency of Education, told the House Education committee on May 20, 2025, that preliminary Title I allocations arrived on schedule but that other federal program awards remain delayed and uncertain because of continued federal budget negotiations and Office of Management and Budget (OMB) timing.

Bordenaro said the agency received preliminary Title I figures that were “similar to what we expected” and that the agency has loaded tentative, hold-harmless amounts (about 80% in most cases) into its grants-management system so local education agencies can begin building applications. She added that the agency expects final awards on July 1 and Oct. 1 but cautioned that other programs still lack timelines.

The nut of the committee’s concern is twofold: proposals in federal budget negotiations could change eligibility for programs such as Medicaid and SNAP, which states use to directly certify students for free or reduced-price school meals, and the U.S. Department of Education has been rejecting many requests to extend liquidation deadlines for ESSER grants, leaving local districts with unreimbursed expenses.

Bordenaro said Medicaid or SNAP eligibility changes could reduce the number of directly certified students, forcing schools to collect more household income forms or USDA meal applications. That would increase administrative burdens on school staff and likely raise unpaid meal balances and general-fund pressures. She noted that Community Eligibility Provision (CEP) and Provision 2 carry-forward rules can protect school-level benefits for several years, but those protections do not cover individual-level income data.

On pandemic-era Elementary and Secondary School Emergency Relief (ESSER) fund liquidation extensions, Bordenaro reported the Agency has submitted 54 extension requests: 49 local education agency projects totaling about $9 million and five state-level projects totaling about $1.2 million. She said another 13 district submissions were ready and that, overall, the state and districts may face about $14 million in financial liability if requests are denied. The agency has already been reimbursed roughly $1.2 million submitted earlier, she said.

Bordenaro told the committee that the early Department of Education reviews are rejecting many submissions that are not direct, one-to-one student services (for example, tutoring). The Department has reportedly approved some direct student services but has been rejecting professional development and construction or facilities projects, including HVAC upgrades. That pattern has left large, in-progress projects — Bordenaro cited Bellows Falls and Burlington as examples — in a precarious position because districts have already paid invoices and are awaiting federal reimbursement.

The agency, working with a federal partner described in testimony as the “Sanders team,” has tried to prepare thorough narratives showing data, rationale and outcomes for each ESSER liquidation request. Bordenaro said the state cannot see the quality of other states’ submissions or the full rationale behind approvals and rejections, and she characterized the current review posture as one in which the secretary has broad discretion over which liquidation requests to approve.

Bordenaro also summarized other federal funding developments and proposals she is watching: the White House “skinny” FY 2026 budget that proposes elimination of some programs (including Title III and migrant education in the draft), proposals to collapse parts of IDEA into a single block grant and to turn many ESEA programs into a consolidated block grant. She said it is unclear how those proposals — if enacted — would change money Vermont receives or the strings attached to it.

Committee members asked about practical consequences and the appeals path if ESSER liquidation requests are rejected. Bordenaro said an appeals process exists on the Department’s website but provided little clarity about how appeals are being handled; she reported that initial reviews appear to be routed to a deputy (named in testimony as Haley Sanon) and that appeals would ultimately be decided by the secretary.

Bordenaro said the agency plans to continue submitting extensions, coordinate with neighboring states and federal partners, and keep the Joint Fiscal Office and the joint fiscal committee apprised so lawmakers can respond in the next session if needed. She urged caution about drawing final conclusions until the Department of Education and Congress complete reconciliation and appropriations actions.

The committee hearing included questions and brief exchanges but no formal votes. Bordenaro provided multiple direct observations to the committee and repeatedly emphasized that the agency is preparing for several scenarios and monitoring developments daily.

Ending: The agency’s immediate next steps are to finalize outstanding submissions, file any necessary appeals, and provide regular updates to the state’s fiscal committees as federal budget negotiations and Department of Education reviews continue. The ultimate impact on Vermont schools will depend on the outcome of national budget reconciliation and the Department’s decisions on ESSER liquidation appeals.