At a hearing of the Senate Committee on Education, witnesses representing rural school districts, small businesses and municipal collectors urged lawmakers to proceed cautiously with House Bill 454, the wide-ranging education finance and property-tax measure now under consideration.

Ryan Herdy, superintendent (as stated in testimony), and Jeanne Howard of the Rural Schools Community Alliance told the committee that a cost-based foundation formula could improve transparency but would require careful district-level review, professional-judgment panels and a detailed transition plan to avoid sudden budget and tax shifts. Herdy said consolidation "does not necessarily lead to cost savings," and presented district-level salary comparisons showing that leveling contract pay across merged districts could raise teacher-salary costs by roughly $3,000,000 in one modeled scenario.

The issue matters, witnesses said, because state education spending surged in fiscal 2025 and some districts added many support positions while statewide enrollment fell. Herdy summarized those dynamics: "in FY25, we have the largest increase in education spending on record" while student counts "decreased by about 6,000." He and other speakers urged the committee to pair any foundation formula with cost and quality monitoring at the district level so resources are spent more effectively.

Ginny Albert, a member of the steering committee for the Rural Schools Community Alliance and chair of the Lincoln School Board, said the alliance supports a foundation approach but warned the formula could mask local needs if professional judgment panels and contingency mechanisms are not used. Albert urged the committee to preserve the state's obligations under the Brigham court decision while protecting geographically necessary small schools and recommended considering income-based approaches as an alternative or complement to property-value measures.

Multiple witnesses raised concerns about how sparsity would be calculated. Under proposals discussed in the hearing, sparsity was being computed at the district level; several speakers said that could strip sparsity funding from small, isolated schools if they were lumped into larger districts. Senator Sandra Harding said she had asked the Joint Fiscal Office (JFO) and staff (Tammy Colby referenced) to ensure sparsity is calculated at the school level rather than the district level.

Testimony also addressed supplemental spending and tax classifications embedded in H.454. Witnesses described supplemental spending as one of the bill’s most complex elements: it could either be capped to limit variability or left broader in ways that might continue to drive disparities. Herdy and Howard said if the base and weights are correct, supplemental spending should not be necessary; in the short term, they suggested capped supplemental authority (for example, a percentage cap) while the new system is calibrated.

Small-business testimony emphasized the property-tax side. Brian Maggiato, owner of the Inn at Manchester and a founding member of the Vermont Lodging Association, urged the committee to limit tax-rate volatility for lodging and other small businesses and proposed compressing non-homestead categories to reduce year-to-year unpredictability. "If we treat our businesses like our families, these are places that people are from, you know, eight to 10 hours a day," Maggiato said, urging protections for the visitor economy and downtown business districts.

A municipal finance issue attached to the bill drew separate comment. Alan Bierke, a semi-retired attorney who said he has researched delinquent tax sales, criticized a provision that would bar a delinquent tax collector from using a conventional tax-sale method unless the delinquent amount is at least $1,500. Bierke said the change was added late and poorly vetted and that it would make collection impractical in many cases where owners are deceased or out of state. He noted that judicial foreclosure can cost municipalities $2,000–$6,000 and cited an example he documented: a Bethel property where taxes owed were $832 but a conventional tax sale drew a $3,900 bid — the excess would have been returned to the delinquent owner in a conventional sale but would be consumed by legal fees under judicial foreclosure.

Committee members asked clarifying questions about the data behind presenters’ claims. Herdy referenced Agency of Education (AOE) field data and the presenters’ slide analysis; witnesses said some AOE field data contain inaccuracies and that JFO analyses are being used to model impacts of boundary changes and the foundation formula. Harding said she was working with JFO to correct sparsity calculations.

The hearing produced no legislative actions; senators and witnesses signaled further analysis and summer study work ahead. Several presenters offered written materials and asked the committee to use Vermont-specific data and professional-judgment panels to smooth any transition. Senator Cummings (chair of the committee) and members said they expected more modeling from JFO and continued stakeholder engagement before the committee advances the bill.

Ending

Witnesses asked lawmakers to prioritize a measured transition to any new funding formula, preserve protections for sparsely populated schools, limit short-term tax shocks and revisit any late-added tax-sale changes. The committee indicated it will continue to seek JFO and AOE analyses and invited additional written testimony and data from the groups that presented.