Senate advances amendment to lower school 'excess spending' threshold to 112%

Senator Chittenton, speaking for the Senate Finance Committee, reported an amendment to S2 20 that would lower the state's existing excess spending threshold from 118% to 112% (inflation adjusted) beginning in fiscal year 2028 and include exceptions for voter-approved debt and districts that do not increase spending year over year. He said the committee voted 5-2-0 to recommend the amendment and asked the Senate to order third reading.

"This soft cap uses an existing mechanism familiar to districts," the senator said, describing the penalty as a double tax on dollars above the threshold that are then returned to the education fund. He told colleagues a spreadsheet circulated on the floor showed that applying a 112% threshold to the most recent budgets would create about $21,000,000 of downward spending pressure statewide while leaving districts choices—cut spending, draw reserves, or put an amount to voters.

Supporters argued the amendment is a calibrated way to signal the need for restraint while retaining local control. "We are moving toward a foundation formula," a senator on the floor said, and this amendment is a step that will force difficult local conversations about efficiencies and mergers.

Opponents raised concerns about data, local impacts and the appeals process. A senator representing Windsor County said the county's districts look disproportionately exposed to cost pressures outside local control and told colleagues she would vote no. Another senator said the grievance/appeal process did not feel sufficiently objective and that cutting core services could harm students.

The amendment also exempts voter‑approved debt from the excess spending calculation and includes a "hold harmless" test for districts that do not increase total spending or per‑pupil spending from the prior year. The finance committee reporter said those exemptions reduce the immediate impact to roughly $600,000 of the estimated savings but left the overall directional effect intact.

After further questions about underlying data and a short recess for senators to review the spreadsheet, the Senate agreed to the committee's recommendation and ordered the bill to third reading. The amendment will proceed to the House after third reading on the Senate floor.

Next steps: the Senate ordered third reading of S2 20; debate and any further amendments are expected at third reading.