Agency of Education asks for $4 million to plan transformation as federal COVID funds expire

Montpelier — The Agency of Education told the House Appropriations Committee on Feb. 20 that it needs a one‑time $4 million appropriation in FY 2026 to scope and support an anticipated education transformation, and warned lawmakers that federal pandemic relief that helped districts will largely expire, creating significant budget pressures.

"The agency implements state and federal laws, policies, and regulations so that all Vermont learners have equitable access to high quality learning opportunities," Interim Deputy Secretary Jill Briggs Campbell told the committee as she opened the agency's presentation.

The agency's recommended FY 2026 budget totals about $2.6 billion, the interim chief financial officer, Sean Kuslow, told the committee. The request is about $47.5 million below the current year largely because federal pandemic grants are ending. Kuslow said the state and districts together received more than $500 million in COVID‑era education funding; about $256 million of ESSER funds went directly to districts and roughly $44 million remained for agency programs and contracts. The last of those federal program deadlines expired Sept. 30, 2024, creating what officials described as a fiscal cliff.

The $4 million one‑time request is intended to fund planning, consulting and triage support should the legislature approve major governance and funding changes this session. "This kind of work is really going to require additional capacity," Briggs Campbell said, describing triage for fragile districts, financial and budgeting support, data and accountability work, and school board transition and training if governance consolidation proceeds. The agency said the funds would primarily pay for contracted consultants procured through normal RFP processes.

Committee members pressed for more detail about how the $4 million would be divided and asked for written follow‑up. "I would like to see a little more detail from you on the $4,000,000 — how you plan to spend it, where you plan to spend it," one representative said. The agency agreed to provide more specific scoping and cost estimates in written testimony.

Agency officials said they have begun strategic planning work — the first since 2014 — and are using that process to help prioritize where any additional capacity would be deployed. The agency flagged three near‑term priorities: strengthening data and accountability systems, supporting districts that are financially fragile, and preparing governance and board supports for any reorganization.

Special education was a recurring concern. Agency staff said Vermont's special‑education identification rate is higher than most states (about 18 percent of students), and that about $70 million in special‑education‑related spending now appears in local budgets beyond what the census block grant covers. "We have an opportunity to... make strides on this in the next two to three years," Briggs Campbell said, pointing to Act 173 implementation, early‑intervention work, and regional cooperative approaches as potential tools to contain costs while improving services.

Committee members also discussed nutrition and emergency feeding. The agency requested a $50,000 contingency fund for emergency meal sites and a $45,000 grant to Outreach for Hunger Vermont; officials said the small emergency fund would be a "break glass" resource to cover staff time and supplies when schools operate emergency feeding sites after disasters. Rosie Krueger, the agency's state director of child nutrition (present in the hearing), was asked to provide a comprehensive map of nutrition‑related budget requests from partners to avoid duplication.

Agency staff outlined other line items, including $8 million in after‑school grants and $3 million for mental‑health supports that were funded with federal relief. The agency said it used liquidation extensions and careful contracting to stretch federal dollars; about $15 million in contract extensions were requested or used to close out work begun with federal relief. Officials emphasized they did not use ESSER funds to hire permanent staff.

What happens next: the agency will supply written follow‑up on the $4 million scoping plan, provide documentation on nutrition funding and universal meals impacts, and return with additional details requested by the committee about special‑education extraordinary payments and the proposed spending breakdown for transformation planning.

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