Senate Education Committee reviews Act 46 consolidation law, its incentives and legal aftermath

Montpelier — The Senate Education Committee on Feb. 27 heard a high-level review of Act 46, the 2015 Vermont law that encouraged school-district mergers through incentives and directed the State Board of Education to create sustainable governance structures where local districts did not do so voluntarily.

Beth St. James, legislative counsel with the Office of Legislative Council, told the committee that Act 46 set goals including “substantial equity in the quality and variety of educational opportunities statewide,” improving operational efficiency and ensuring education is delivered at a cost “that parents, voters, and taxpayers value.” She said the statute explicitly stated the legislature did not intend to close small schools but to expand educational opportunities and economies of scale.

The law created preferred and alternative governance models and attached time-limited incentives to voluntary mergers. Under the preferred model a single school district would serve pre-K through grade 12, be its own supervisory union and meet a minimum average daily membership (ADM) threshold of 900. Alternative supervisory-union structures were allowed if member districts together demonstrated they met the statute’s goals and had a combined ADM of at least 1,100.

Act 46 established three tiers of merger incentives tied to operational deadlines: accelerated mergers operational by July 1, 2017, extended eligibility for certain regional education district (RED) incentives if approved by that same date, and later mergers that became operational by July 1, 2019. Incentives cited by St. James included temporary tax-rate reductions for the first four to five years of operation, merger-support grants and transition facilitation grants; earlier statutes (Acts and Resolves No. 153 and No. 156) had created RED incentives and a $400-per-pupil transitional payment for qualifying districts.

St. James described operational constraints and protections in earlier statutes that carried forward, including a prohibition on closing a school within the first four years of a newly merged district without voter consent in the town where the school is located. She said many procedural elements were codified in Chapter 11 of Title 16 and that the Secretary of Education was required to review governance structures as they existed on July 1, 2019 and submit a plan to the State Board.

When some districts did not reorganize voluntarily, the State Board of Education issued a final order in November 2018 that directed mergers and realignments; that order excluded interstate districts, career and technical education (CTE) districts and recently voluntarily merged districts. The State Board’s order was subsequently challenged in a case commonly referred to in the meeting as Athens; the Vermont Supreme Court upheld the State Board’s order, and St. James said the court’s decision relied in part on the specific guidance and intent language the legislature placed in the session laws.

Committee members asked repeatedly for quantitative information. St. James said she was not aware of a comprehensive, legislature-commissioned analysis of Act 46’s cost savings and effectiveness and that she would provide links to available reports (including research stemming from earlier Acts 153 and 156). “I am not aware of a, comprehensive analysis of the cost savings and effectiveness of Act 46,” she told the committee.

Members also raised the distinction between the number of school districts and the number of individual school buildings, noting that many mergers compressed administrative units (supervisory unions and district administrations) while leaving schools open. Committee members requested counts of districts and schools before and after the State Board’s order and any fiscal summaries from Joint Fiscal Office or other analysis the Legislative Council could provide.

St. James cautioned that questions about delegating the legislature’s municipal-creation authority (Dillon’s Rule) to another body would require case-specific analysis; she said the Athens decision does not create a blanket rule and that the constitutional question can turn on how much guidance is provided to the delegated entity.

The committee asked for follow-up materials, including the State Board’s final order, links to academic and policy reports referenced in the briefing, and any available district- and school-level counts and fiscal analyses. The meeting adjourned after members agreed to review the materials over the coming weeks.