Vermont School Districts Already Face Tough Budget Decisions

Just two months into the school year, districts are already facing tough decisions about next year’s budgets. That’s because a new law has lowered the amount per student that districts can spend without facing a stiff tax penalty.

The policy change means that some school boards will have to decide in the coming months whether to close or reconfigure schools, cut a substantial number of staff, or scale back programming in order to present budgets on Town Meeting Day that stay below what’s known as the excess spending threshold.

“For all of us in the public school system, we just want to know, Are our kids going to be OK?” said Hartford School District superintendent Caty Sutton, who estimates that her district may have to cut up to $5 million from next year’s budget. “That seems to be the thing we have less and less control over, and that is frightening.”

Act 170, which calls for voluntary school district mergers and the formation of regional district partnerships, was the most high-profile education law passed this year. But a different piece of legislation — Act 169 — presents more immediate concerns for administrators and school boards.

That law changed the amount per student that districts can spend above the statewide average — which is estimated at around $16,500 for this year — without facing a double tax on those extra dollars. Last year, districts could spend up to 118 percent of the average statewide amount before facing a tax penalty. But Act 169 lowered that to 115.5 percent, with an additional drop of 1 percentage point in each of the next four years.

The ratcheting down was intended to pressure higher-spending districts to cut their budgets and ease them into a new funding system, known as the foundation formula. The spending protocol gives the state, rather than local taxpayers, the power to determine how much money school districts receive. The education reform bill passed this year calls for the formula to go into effect in July 2029, though the legislature must meet a number of contingencies for that to happen.

The change in the excess spending threshold, combined with declining student enrollment and inflation, means that some districts must make consequential changes to how they operate — and quickly.

Harwood Unified Union School District, which serves students in Waterbury, Warren, Waitsfield, Moretown, Fayston and Duxbury, has 18 percent fewer students enrolled now compared to the 2009-10 school year. Over the past three years, the district has eliminated the equivalent of more than 53 full-time positions and reduced spending by more than $7 million across its four elementary schools, two middle schools and high school.

Even if the district maintained a level-services budget for next year, preliminary estimates suggest it could face a property tax penalty of up to $2.7 million, according to district officials who presented at an October 14 school board meeting. To stay under the excess spending threshold, the district is contemplating cuts of approximately $3.3 million.

The district is considering a plan to close two of its elementary schools and consolidate its two middle schools into one to avoid a scenario in which it would need to eliminate most student transportation, extracurricular activities and prekindergarten offerings.

The school board must decide whether to move forward soon, so that it could warn its budget in January ahead of a vote on Town Meeting Day. The district is also contemplating the purchase and renovation of Cabot Creamery’s former Waitsfield headquarters to become its sole elementary school, though that would be a longer-term plan.

“The reductions really are substantial if we don’t do anything to reduce our footprint,” Harwood superintendent Mike Leichliter said in an interview last week.

Under the evolving school-consolidation proposal, the district would save money by having fewer buildings to maintain, Leichliter said. But the bulk of the savings would come from reducing staff.

Leichliter said he understands the legislature’s rationale for lowering the excess spending threshold to tamp down spending. But he said the state should have taken aim at spending that districts can’t control, such as health insurance costs, before imposing such stiff financial penalties.

Leichliter also said it doesn’t make sense to lower the excess spending threshold when committees exploring voluntary school district mergers and forming regional partnerships have barely begun their work.

“It seems like it’s a flipped process,” Leichliter said. “The redesign [of school districts] should have been in place before the funding mechanisms were tightened.”

The associations representing Vermont’s school boards and superintendents made similar points in testimony to the legislature earlier this year. They warned that a rapid reduction in the excess spending threshold could prompt aggressive cuts to programs and staff that would adversely affect the quality of education.

Closing multiple elementary schools without a deliberative process is also a jarring proposition for parents. Sarah Nagle has two children; her older son attends prekindergarten at Moretown Elementary.

Deciding whether to close an elementary school within a matter of months is “extremely abrupt and completely unfair,” Nagle said. “Decisions like this should be made super carefully and be informed by research — not just numbers but impact on kids.”

Nagle blames the legislature for passing a law “without really considering what the implications are.” She is among a group of Moretown parents organizing to try to save their elementary school.

In Hartford, budget decisions are also weighing heavily on the community, according to Sutton, the superintendent. The district, which serves students from Wilder, White River Junction, West Hartford, Hartford and Quechee, passed a $58.7 million spending plan on the first try earlier this year. But the district estimates it may have to cut $5 million from next year’s budget to stay under the excess spending threshold. That translates to cutting one-quarter of the district’s workforce, Sutton said.

The scale of the cuts needed means an elementary school closure is on the table for next year, just as it is in Harwood. So are other structural changes, such as moving fifth graders to the middle school and housing all prekindergarten students in one building.

After information about those options was presented at a school board meeting last week, the board directed administrators to come back with more detailed financial information to determine whether a closure can be averted.

“People are emotional about this,” Sutton said. “There’s a feeling of anxiety and grief in relation to … a reduction of this magnitude, the loss of colleagues, what it means for kids … This is not something we would ever want to happen or would envision happening here.”

What makes the situation even harder, Sutton said, is her belief that the state lacks a coherent vision for education that’s focused on improving the experience for students.

“We as superintendents want to get behind this, be invested in a shared vision … and be able to articulate it to our communities,” Sutton said. “But absent of that, I feel rudderless.”

In the Champlain Valley School District, the largest in the state, superintendent Adam Bunting shares the sentiment.

“One of the bigger challenges we’re facing as a state, and that we’re facing in individual school systems, is a lack of clear direction,” he said.

His district, which serves students in Williston, Shelburne, Hinesburg, Charlotte and St. George, is considering substantial cuts to stay below the 115.5 percent threshold for next year and avoid a fiscal cliff in subsequent ones. Over the past three years, the district has cut $9 million in spending and the equivalent of 82 full-time positions.

Last week, the Champlain Valley school board’s finance committee recommended a budget of $112.5 million for next year, a 4.3 percent increase but $2.5 million less than what the district would need to spend to keep services level given declining enrollment and the impact of inflation.

Meghan Metzler, the board chair, said the district isn’t contemplating any school closures. But getting to the target budget number will undoubtedly mean cutting more staff, though no decisions have been made about specific positions.

“This has not been laid out in a way that makes sense or on a timeline that makes sense,” Metzler said. “We’re really rushing to solve a property tax problem without thinking about the impacts on kids.” ➆

The original print version of this article was headlined “Rough Cuts | Vermont’s school districts face difficult decisions as they begin crafting next year’s budgets”

This article appears in October 28 • 2026.

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