Emilie Kornheiser, a Democrat, represents the Windham-7 district in Brattleboro in the Vermont House of Representatives. Among other committee assignments, she chairs the House Committee on Ways and Means.
BRATTLEBORO-I'm writing today to update you on legislation that recently passed out of the Vermont House and is now in the Senate.
H.955, a bill detailing the next steps in Act 73, sets Vermont on the path toward school district consolidation through a voluntary democratic process that will be guided by local communities and culminate in a vote of the electorate to decide the district governance arrangements.
This legislation was developed through many months of long hours, hard work, and intense discussions in the House Education and Ways and Means committees.
We received feedback from over 5,000 Vermonters who overwhelmingly rejected the idea of forced mergers but remain open to the possibility of transformative change if it is to include the voices of our local communities.
H.955 is the compromise that now allows Act 73 to actually move forward and begin saving our taxpayers their hard-earned dollars. Without this legislation, our state will likely be fighting an uphill battle against the will of the majority of Vermonters for many decades to come, eroding trust, and forcing the inequitable education system that we have in place to remain unchanged.
Neither the House nor the Senate had enough votes to force mergers, which created a political impasse with the legislation that we enacted last spring.
* * *
You may hear that the Legislature is merely "kicking the can down the road" with just another study, and while I think it's actually great to study things before acting, it's not true in this case.
This is the first - and, so far, only - legislation passed in the House which actually gives Act 73 a viable path to move toward mergers. While we use the phrase "study committee" to describe how districts discuss a merger, as it is familiar from previous education governance work, it would be more accurate to describe these committees as a "work group" that will hash out the details of new mergers on a very specific timeline with an end result that is now within sight.
The bill will now move through the Senate, and it may face a Committee of Conference later in the session as we move towards its passage.
I am glad that we took the time to implement Act 73 the right way. Through H.955, we have found a way to put kids first, keep costs under control, and listen to local voices. This is careful, thoughtful multi-year work, and we are in year three of a six-year process.
The bill rests on the creation of seven regional Cooperative Educational Service Areas (CESAs).
The core function of a CESA is to offer education services and support on a larger regional scale. The formation of a CESA helps member supervisory unions and school districts access specialized programs and technical assistance that individual districts (esp. small and rural districts) might otherwise need to purchase at a higher individual cost.
These CESAs will deliver services more efficiently, expand access to specialized programs, and coordinate transportation and back-office support, especially for small and rural schools. (We have one CESA in the state, and WSESD is already part of it.)
The bill also sets up a process and timeline for facilitators to work toward voluntary mergers across the state where there is a clear educational benefit, alignment with local priorities, and fiscal feasibility.
CESAs will be an important tool to achieve more immediate efficiencies, regional service sharing, and cost savings, while the voluntary merger process contemplated in this bill is happening statewide. This bill aligns with the goal of Act 73 to make intentional, evidence-based improvements to strengthen our public education system.
CESAs exist in many other states and they are a proven concept. We received testimony from national experts and many Vermont educators that CESA services offer opportunities for cost savings and efficiency in special education, business and administrative services, professional development, curriculum coordination, and transportation.
Research from similar states shows that CESAs effectively improve access to services and reduce duplication.
The bill creates the seven CESA regional boundaries and the school district/supervisory union members within each. Each would be required to offer services in special education, business and administrative services, and union school district creation consultation and facilitation.
As John Bass, senior advisor to the Association for Educational Service Agencies, has written, CESAs "are the infrastructure that allows school systems to operate efficiently, deliver high-quality services, and ensure students - regardless of zip code - receive strong educational support."
CESAs will increase statewide coherence and build regional capacity. Vermonters want increased efficiencies, educational opportunities, and cost savings in the present state while we work towards strategic mergers.
* * *
The second major element of this bill addresses school governance consolidation by quickly resourcing seven facilitators across the state to start merger study committees.
Facilitators will be assigned to each CESA region with recommended new districts; these regions will be required to collaborate to explore the advantages of school district consolidation.
The ability to form merger study committees exists in current law, and this bill follows that process once study committees are formed with facilitator guidance. Any new governance arrangements follow the process in current law for the study committee to analyze the advantages and disadvantages of a merger.
If a study committee concludes that a merger is advisable, the report goes to the Secretary of Education, the State Board of Education, and then the voters of the school districts. The bill envisions that these merger questions will go to the local voters in the 2028 general election.
* * *
From the start of the conversation around education transformation, the idea that school district governance changes must come before a new education funding formula has been an often-repeated guiding principle.
We need to see transformation on the ground regarding school governance and improved scale before we can make the necessary adjustments to our education funding system. We need to put in place cost-savings measures as we move toward equity of funding.
The foundation formula will work best to deliver opportunities around the state if we continue to address the cost drivers that have led to increased spending around the state:
• Health care: The average premium increase in FY27 teacher health insurance rates was 7.3%. This single-digit increase, the first since FY23, is largely the result of a combination of price-and-cost-control actions by the Vermont Legislature, state regulators at the Green Mountain Care Board, and the Vermont Education Health Initiative.
With reference-based pricing and Act 55, both passed last year, costs to the education fund have been reduced by at least $20 million and are expected to reduce costs another $100 million over the next five years as reference based pricing is implemented.
• Mental Health: The cost of increased mental health support in our schools that we needed during the pandemic was paid for by the federal government in local budgets until 2023, when the costs shifted to the education fund.
Our new CESAs will enable districts to more easily seek integrated services from our system of designated mental health agencies (funded by the general fund, not property taxes) and draw down more Medicaid dollars.
Language added to the budget to modernize district Medicaid billing at the Agency of Human Services will also significantly reduce administrative costs and increase federal match.
• Special education: Special education is difficult to deliver effectively in smaller districts with limited resources, so many of our schools need to outsource these services at great cost to the state and with reduced accountability to families and communities. CESAs enable special education to be delivered at scale, with integrity, and at a reduced cost to the Education Fund.
• Class-size minimums: As implemented, class size minimums, passed in Act 73 last year, enable school boards and school administrators to move toward larger classrooms so staff time can be used effectively and kids can learn in a dynamic environment with diverse peer groups.
• School facilities: Many of our districts are maintaining decrepit infrastructure at great cost to taxpayers and without the long-term stability and improved educational opportunities that new construction would provide.
The school construction program in H.955 would enable us to take these costs off of district budgets and make strategic investments in our community infrastructure. Our state school construction program ended in 2007, and construction and maintenance has been inconsistent around the state since.
Much of the Education reform work in Act 73 is only able to be fully realized with the construction of new regional high schools, and the rehabilitation and expansion of many school buildings.
School construction work has been happening on a few fronts:
• Covering a district's existing debt service with a categorical grant.
• Support from the Agency of Education to scope, plan, prioritize, and approve construction projects around the state.
• New state bonding to cover a portion of existing projects.
• A new state grant program to cover new district debt as part of an approved strategic project.
• New supplemental district spending rules to cover payment of bonds on new approved projects.
With Act 73, H.955, and other committee work, we've addressed cost drivers so districts will be able to better adapt to the foundation formula, and savings can be spread throughout the state - creating fair opportunities for all of our kids, no matter the zip code.
In addition to cost savings, we put in place multiple components to ensure district budgets can meet student needs.
* * *
The foundation formula, passed in Act 73, guarantees steady resources for every child in every school.
The timing for the foundation formula aligns with the completion of the brokered voluntary merger process, and allows time for these new districts to draft a thoughtful budget.
We've included contingencies to ensure we've included the funding of special education, transportation, and other essential education costs, as well as further analysis in 2027 and 2028, before the new finance system takes place.
* * *
Some details on the next steps for financings:
• Reserve guidance: In navigating the last few years of difficult education spending, it has become clear that every district spends and retains any money beyond their current-year budget in different ways.
As we move toward fair budgets and fair opportunities, consistency is important. We also want to create consistency in the opportunities and consequences of district mergers.
At the request of the school business staff, we asked the Agency of Education to set clear reserve standards and guidance.
• Pre-K: The way we pay for pre-kindergarten doesn't match our policy goals or local district spending decisions. Through a series of three studies, we'll be able to set up a new payment scheme in the 2027 legislative session.
• Special education: Act 73 has updated funding for special education to account for how spending in current law is split between district budgets and state reimbursements.
In consultation with special educators, we affirmed that this work would meet federal rules.
• Small and Sparse Schools: The State Board of Education will update its rules for education quality standards to define criteria for schools to be considered "small by necessity" or "sparse by necessity."
Defining these terms will impact how many school districts receive school support grants under Act 73. These conversations around rurality and small schools can easily be politicized, so we've turned this topic over to the State Board to maximize public participation and data driven decision-making.
• Transportation: Transportation equity is a key piece of any changes to governance, finance, or education delivery. Different districts now provide radically different transportation opportunities, there are school bus driver shortages, and practices for reimbursement from the education fund don't match the statute and rules.
We received a report from the Agency of Education in 2025 on school transportation that pointed to some next steps, and we need further information on costs and expenses to set a grant structure and standards in 2027.
Once we've stabilized spending with the foundation formula, we can make changes to the revenue side.
* * *
H.955 advanced two important pieces of property tax policy:
• Tax classifications (second homes): The taxation of second homes at a different rate than primary homes or commercial properties was initiated in Act 73, which the governor signed into law in 2025.
This year we were able to build on a comprehensive report from the Dept of Taxes in H.955. A home that is lived in the majority of the year would be exempted (as a rental property or a homestead), and a property that isn't weatherized, like a camp or a summer house, wouldn't count as a "dwelling unit" and would also not be subject to this classification. Mixed-use properties have a specific treatment that mirrors existing law.
This work is on a long careful timeline (we aren't expected to set rates until 2029) and is part of our larger education and property-tax-reform efforts.
The increased revenue from the second homes tax would be used to lower homestead taxes.
It's really helpful to hear from Vermonters with specific scenarios so we can be sure to accommodate every eventuality in the guidelines and rule-making process.
While we do not yet have processes and data needed to successfully implement this tax today, we are finalizing language so that the Department of Taxes can do the administrative work and data collection necessary prior to this being a feasible tax to implement.
Final reports are aligned with implementing this new tax type simultaneously with the foundation formula and property tax credit changes, so taxpayers don't experience "whiplash" in their bills.
* * *
We have a statewide education tax, and functionally a statewide grand list; however, our properties are valued very inconsistently across the state.
Regional Assessment Districts will create saving, efficiency, and equity in our reappraisal processes. Act 73 tasked the Department of Taxes to set up a working group and make recommendations to move forward with a regional assessment process rather than each municipality going at it on its own.
The Ways and Means committee has finalized language to move this work forward.
This legislation is step 3 in a multiyear process. And frankly, that is hard to do in a biennial Legislature with a divided government. The bill is currently in the Senate and we have negotiations with the governor ahead.
This legislation is complex by necessity; we are addressing a wide range of large and small details here. I encourage you to ask questions if you have any concerns about how it might impact your family or our community.
This Voices Legislative Update was submitted to The Commons.
This piece, published in print in the Voices section or as a column in the news sections, represents the opinion of the writer. In the newspaper and on this website, we strive to ensure that opinions are based on fair expression of established fact. In the spirit of transparency and accountability, The Commons is reviewing and developing more precise policies about editing of opinions and our role and our responsibility and standards in fact-checking our own work and the contributions to the newspaper. In the meantime, we heartily encourage civil and productive responses at voices@commonsnews.org.