Senate passes H955 to reshape Vermont education system, setting timelines for voluntary mergers and new funding rules

The Senate on May 29 passed H955, "an act relating to next steps in transforming Vermont's education system," adopting a multi‑section amendment that sets out a timetable and incentives for voluntary school district mergers, creates cooperative educational service areas (CISAs) to provide shared services and outlines a phased implementation of a new foundation funding formula.

Senator from Bennington, reporting for the Education Committee, said the bill addresses structural strains from a nearly one‑third decline in the school‑age population over 20 years and rising education spending. "Our current system, I think we all agree, is unsustainable," the senator said, adding the bill "creates CESAs ... to provide some services on behalf of the SUS within them" and seeks to give communities "the opportunity to make hard decisions themselves." The senator said the bill aims to provide predictable funding for special education and other services while preserving space for smaller niche schools.

The amendment adopted on the floor removed provisions for forced mergers and instead codified a voluntary merger process with intensive supports. Senator from Addison, who led presentation of the amendment, said clearly: "This amendment does not include force mergers. We are not going to force mergers." The amendment adds requirements for facilitators, merger study committees and targeted grants to support local planning and decision‑making.

Key elements of the adopted measure include:

- Creation of Cooperative Educational Service Areas (CISAs) that are explicitly non‑governing service providers tasked with offering special education support, business and administrative services, curriculum coordination and transportation assistance. CISAs will provide services upon request and charge membership and service fees as allocated by average daily membership and services used.

- A structured merger timeline: facilitators are to be hired by Sept. 1, 2026; merger study committees meet beginning Oct. 15, 2026; final study reports are due Sept. 1, 2027; state board review by Dec. 15, 2027; town‑meeting votes on mergers in March 2028; and, if mergers proceed, new unified districts and the foundation formula would take effect July 1, 2029. The amendment requires universal mail ballots for the March 2028 vote.

- Funding supports and grants: one‑time start‑up assistance for CISAs ($15,000 per initial unit mentioned), $10,000 per merger study committee, and an intent to catalyze school construction aid through $50 million in annual state bonding capacity to support projects that align with consolidation and improve access to CTE and special‑education services.

- Protections and contingency requirements: the amendment includes contingencies that must be addressed before the foundation formula goes into effect—work on geographic measures, CTE and special‑education weights, accounting for regional cost differences and a facilitator report on merger committee performance. It also establishes a moratorium on withdrawing from districts until 2035 to stabilize governance during the transition.

On finance and tax provisions, the bill directs the Department of Taxes to prepare for a new property tax classification system, including a split of nonhomestead into residential and nonresidential categories, and calls for regional assessment districts to conduct mass reappraisals on a six‑year cycle. Senator Cummings, reporting for the Finance Committee, described the regional assessment districts as a tool to keep valuations up to date and reduce inequities that would otherwise complicate the education financing changes.

Floor debate acknowledged the bipartisan negotiation behind the amendment, but several senators urged caution about costs and rural impacts. "We have to ensure that tuitioning towns ... are not overweighted in our foundation formula," a senator warned, voicing concerns that the changes could unintentionally shift costs or reduce services in small, rural communities.

The Senate recorded a roll call on third reading: 27 yeas and 2 nays. Two senators registered no votes in the roll call (Senator Hein and Senator Ingo). The Senate ordered the bill messaged to the House forthwith.

What happens next: the amendment ties several implementation steps to statutory contingencies and additional legislative work. If the House concurs and the contingencies are satisfied by the legislature (including consultant and facilitator reports and targeted statutory fixes), districts that vote to merge in March 2028 would become operational July 1, 2029, and the foundation formula would be phased in according to the timelines in the bill.

The Senate also adjusted appropriation language: an initial $1 million facilities master grant allocation was reduced to $900,000 to account for other costs (including a $75,000 pre‑K study) identified by the Appropriations Committee.

The Senate adjourned until 2 p.m. after messaging its action on H955 to the House.