A Weekly State House Recap By Maggie Lenz and Gwynn Zakov (on behalf of Atlas Government Affairs and Garnet Government Relations
Veto Math
At the governor’s weekly press conference last week, Governor Scott stood at the podium and in no uncertain terms, on the record, said that he's going to veto the budget. When a reporter asked whether he'd veto the House passed budget and yield bill as they stand, Scott's answer was a flat "Oh, yeah." He said the same about the House Education Committee's version of Act 73 implementation. Three vetoes, promised before the bills have even cleared the Senate. But the veto threats aren't the interesting part. The interesting part is the math, both fiscal and political math, and whether the legislature can thread a needle that may not have an eye.
Let’s start with the number that matters perhaps the most to homeowners: 7%. That's the average property tax increase Vermonters are looking at under the yield bill, H.949, that passed the House last week. Back in December, the Tax Department projected a 12% spike. Both the governor and the legislature want to use about $105 million in one-time General Fund money to bring it down. They just sharply disagree on how.
The governor wants to spend all $105 million this year, holding the average increase to roughly 4%. The House, on a close 6-5 party-line vote in the Ways and Means Committee, chose to split it with about $52.5 million this year, plus $22.3 million in Education Fund surplus, with the remainder reserved to cushion the blow in FY28. The result is the 7% increase that has Scott reaching for his veto pen.
The governor's argument is emotionally powerful. At the press conference, he read a letter from Brian, a 33 year old born and raised in Vermont, an educator, a Fulbright recipient, who's leaving the state with his family. His property taxes have climbed $3,000 in five years, amounting to nearly $750 a month. His own father, another lifelong Vermonter, can't afford heating oil. Two-thirds of his friends have already left the state. "I am not leaving because I have failed or stopped caring about Vermont," Brian wrote. "I am leaving because I want a sustainable future for my family."
The legislature's counterargument is more technical but no less real. If we dump the entire $105 million into this year, we create a massive cliff and a brutal spike next year when that money is gone. Their argument is that a 7% increase now followed by a manageable increase next year beats a 4% increase now followed by a double-digit hit in FY28.
On the surface, the governor’s and House budgets are very close. But Governor Scott argues that underneath, the House version adds roughly $18 million in General Fund spending above what he proposed. It also includes 40 one-time appropriations compared to his 10. The administration also objects to the House diverting $9.5 million in IT Modernization Fund interest, and to the House stripping language that would permanently shift motor vehicle Purchase and Use Tax revenue to the struggling Transportation Fund. Secretary of Administration Sarah Clark called that "risky in a time of extreme asset market volatility, federal funding vulnerabilities, and uncertain state revenues."
All of these fiscal disputes are significant, but the real rip current is education, specifically, whether the legislature is following through on Act 73. Act 73 was supposed to be the grand bargain. Property taxes have risen more than 40% in five years while enrollment has declined. The law set a three-year runway to consolidate school districts into larger units, implement a weighted funding formula, and move to a statewide tax rate. The central mechanism was a redistricting task force that was supposed to propose new district maps for legislative approval this session. That process has gone sideways. The task force recommended voluntary mergers instead of drawing mandatory maps. Now the House Education Committee has advanced H.955, which takes an even more cautious approach by creating 21 "school district groupings" that would study whether to consolidate, with voters getting the final say, and a target date of 2030. The Chair of the House Education Committee has said his committee’s bill respects local voices, and communities’ aversion to forced mergers.
Scott's response has been blunt. If there is no meaningful education reform, the FY27 budget will not get his signature. When a reporter noted that legislative leaders say they simply don't have the votes for mandatory maps, Scott was unmoved. "If we end up in the same position that we've ended up in years past," he said, "the voters will decide what to do at that point."
This is where the political math gets interesting. The yield bill passed the House 78-61. A two-thirds override majority is 100. That's a gap of 22 votes. The supermajority exists on paper, but the thin 78-vote margin suggests a meaningful number of majority-caucus members aren't comfortable with the 7% increase. And Scott isn't threatening one veto. He's threatening three. Legislators who might hold firm on a single override could waver when asked to override on the budget, the yield bill, and education reform simultaneously.
The Senate becomes the critical variable. If it amends the yield bill to use more of the $105 million upfront, adjusts the budget spending, or produces a more aggressive education reform bill, conference committee negotiations could yield something Scott might sign. If the Senate mirrors the House, the question is whether both chambers can muster override votes on multiple fronts at once.
Step back from the bill numbers and the pattern is clear. Property taxes have been the primary mechanism for funding schools for decades. That worked when enrollment was stable and costs grew slowly. But enrollment has declined for twenty years, costs have risen faster than revenue, and taxpayers are paying more for a system serving fewer students. Act 73 was supposed to bend that curve, but that requires telling communities their school governance structures must change, and the legislature is discovering that passing a law calling for transformation is much easier than actually transforming. Meanwhile, the annual yield bill keeps putting a Band-Aid over the problem with one-time money - $118 million last year, $105 million this year, and nobody knows what comes next.
It’s now the Senate's turn, and Conference committees will follow. The last few weeks of a Vermont legislative session have a way of producing unexpected compromises, or unexpected impasses. Meanwhile, Brian is leaving Vermont. The question the Statehouse is grappling with is whether anyone can do anything to make sure fewer Brians follow him out the door, and whether they can agree on what that something is before the session clock runs out.
Required Choice
The House has advanced its approach to restructuring Vermont’s school system out of the Education Committee. What is moving forward is a coordinated change in how districts are organized and how the system functions day to day.
The House plan begins by creating regional service areas that group districts into defined geographic structures. These regions become the framework for coordination, bringing districts together around shared services, administration, and planning. Districts remain in place at the outset, while the system begins to operate more regionally through this structure.
The next phase requires a statewide merger study process. Districts are placed into smaller groupings and must participate in study committees that evaluate potential consolidation. These committees are facilitated and operate on a set timeline. Their work involves examining financial impacts, operational changes, and educational outcomes, and determining whether forming a larger system is advisable.
When a merger is recommended, it moves through a defined approval process and ultimately goes to voters. When a merger is not recommended, the committee produces a report explaining the outcome and identifying the factors that shaped that decision. That information is sent back to the Legislature, creating a record that can inform future policy decisions.
The House approach is structured as a phased process. It establishes regional coordination first, requires districts to engage in detailed merger analysis, and builds a record of how those decisions play out across the state. The process moves forward while keeping key decisions tied to local votes and legislative review.
The Senate is working on a parallel proposal and is expected to complete its work any day now. That approach is more direct and is designed to achieve consolidation. It establishes regional governance structures and pairs them with a pathway that allows the state to step in and move districts into larger, unified systems if consolidation does not occur on its own. While the House builds a process to study and propose mergers, the Senate framework is built to ensure that consolidation ultimately happens.
House Education Bill Timeline (as currently structured)
• July 1, 2026 (effective date)
The bill takes effect. CESAs are formally established and become the regional organizing framework.
• Fall 2026 (by October 1 and December 1, 2026)
Facilitators are hired by October 1 to run the process.
By December 1, districts are assigned into study committees and must begin meeting. Participation is required.
• 2026–2027 (study period)
Study committees meet over roughly a year. They analyze financial, operational, and educational impacts and develop formal reports on whether consolidation is advisable.
• By December 1, 2027
Study committees complete and submit final reports, including merger proposals if recommended.
• Early 2028 (by February 1, 2028)
Local school boards review the reports and provide feedback.
• Spring 2028 (April–June 2028)
State-level review occurs.
Secretary review deadline around April 1 (or sooner).
State Board action required by June 1.
• By November 7, 2028
If a merger is recommended, it goes to a vote in each affected district.
• Post-2028
If approved, new unified districts begin forming and preparing for implementation.
• Target around 2030
The new system, including governance changes and the funding structure tied to it, is expected to be fully in place.
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