Education leaders tell Senate Finance to sequence reforms, address health care and mental‑health costs first

MONTPELIER, Vt. — Superintendents, principals and school finance officials told the Vermont Senate Finance Committee on Jan. 31 that they broadly support changing how the state funds public education but warned the legislature must sequence reforms carefully and address major cost drivers — especially health insurance and school‑based mental‑health services — before implementing a foundation formula or large governance consolidations.

"Any meaningful effort to reform Vermont's education system must include a strategy to manage health care costs effectively," said Chelsea Myers, Executive Director, Vermont Superintendents Association, during testimony to the committee. Myers and other witnesses said the governor’s proposal contains many unanswered implementation questions and that committees need more time and data before making final decisions.

The committee heard layered concerns in four broad areas: what costs the new formula would cover, how to account for health‑care and special‑education spending, how to transition governance and district size without disrupting students, and whether the state has comparable, uniform data on staffing and services.

Libby Blonsdale, Superintendent for Montpelier, told senators the staffing model the administration presented in preliminary modeling "seemed to superintendents pretty arbitrary," specifically calling out the way interventionists and instructional coaches were modeled for schools of particular sizes. "My school here at Union Elementary School has 400 kids. So you'd start, you know, doing the ratios with those numbers," she said, describing a model that would leave some schools with less than one full‑time interventionist for hundreds of students.

Witnesses repeatedly said federal funding assumptions built into some staffing models are unreliable. Blonsdale said consultants referred districts to Title I or federal dollars to make up differences, a suggestion she and colleagues called unrealistic for many Vermont schools.

Several witnesses urged the committee to tackle health‑care cost inflation as part of any funding change. Testimony cited health insurance rate increases described by superintendents as a major cost driver; one witness said health‑care rates rose by double digits in the most recent year. Witnesses also identified growing mental‑health demand and staffing shortages in designated agencies as drivers that are shifting costs onto school budgets.

"Schools are the only institution that can't say no when a child shows up in crisis," said Jay Nichols, Executive Director, Vermont Principals Association. "When you don't know what to do, oftentimes what you do is you hire a body to help try to stop that kid from doing that." Nichols and other school leaders said competition for scarce mental‑health clinicians — between schools and community mental‑health agencies — is raising costs and reducing access.

Finance and school business officers asked for a clear, multi‑step transition before a foundation formula takes effect. Morgan Daybell, chief financial officer for Franklin Northeast and past president of the Association of School Business Officials, said the sector needs "significant enough runway" and robust modeling to avoid unintended consequences, and welcomed the governor’s one‑time transfer to the education fund that is intended to damp enrollment year spending pressures this fiscal year.

Witnesses discussed several specific policy details the committee will need to resolve if it proceeds: whether and how a new foundation amount would be indexed (an "inflator"), how private and choice school payments would be handled, whether districts may spend above the foundation amount and how that interacts with legal constraints on state funding, and how local governance and voting would work under a statewide formula.

Panelists debated scale and district size. Several witnesses — citing national research and Vermont practice — said consolidation of very small districts typically provides the largest per‑pupil savings, but they urged caution about very large districts. Myers and others referenced research suggesting optimal district sizes for balancing cost and quality in the roughly 2,000–4,000‑student range and warned that diseconomies of scale can emerge well above that range. Specific recommendations offered to the committee included setting minimum district and school sizes in the state Education Quality Standards (EQS), moving supervisory unions to single school districts, and prioritizing consolidation at the secondary level where program disparities are largest.

On facility needs and remediation, witnesses told the committee the state faces large deferred maintenance. Myers cited preliminary figures she said the Agency of Education has provided: immediate school facility needs at about $228.6 million and total infrastructure costs that may exceed $6.35 billion. She also said the $10 million for PCB mitigation proposed in the budget would be insufficient to meet statewide needs.

Witnesses also discussed assessment and accountability measures. Some senators and witnesses noted that Vermont participates in the National Assessment of Educational Progress (NAEP) for every 4th‑ and 8th‑grade cohort, and that national comparisons can be affected by differences in which students are tested and how states administer assessments. Jay Nichols said state assessments and their use for local instructional decisions are more useful for measuring progress than single national benchmarks.

No formal votes or motions took place during the hearing. Committee members said they will hear the administration’s model and further detail at an upcoming session; witnesses asked for more detailed runs on winners and losers under any proposed property‑tax change and for fiscal modeling on options such as adjusting income sensitivity thresholds.

The committee’s next steps, as described on the record, include a presentation by administration staff on the governor’s proposal at a subsequent meeting and additional written submissions from the education associations. Witnesses urged the committee to require uniform staffing and financial reporting to permit informed policy choices before signing on to large funding shifts.

"We can get the cost savings, and I think there's opportunity here," Nichols said, but he added that changes must come with tools and sequencing so student services are not harmed in the short term.

Ending: Committee leaders said they will continue hearings next week to receive the administration’s fiscal modeling and to question agency staff about the technical details of a foundation formula and proposed governance changes. No formal actions were taken at the Jan. 31 hearing.