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Education reform is dominating the agenda at the State House, yet there is still no single clear path forward. As crossover nears, lawmakers are being asked to make foundational decisions about cost, quality, governance, equity, and workforce readiness simultaneously. The pressure to act is colliding with unresolved tradeoffs.

Education spending has become the central policy arena where affordability, opportunity, and long-term economic competitiveness intersect.

Cost and Quality Are Inseparable

Education spending remains the largest driver of property tax pressure, creating real affordability challenges for households and employers. Yet lawmakers are clear: cost control alone cannot be the goal. Reform must protect educational quality, expand opportunity, and deliver equitable outcomes statewide.

Affordability without quality is unsustainable. Quality without fiscal discipline is unattainable.

Act 73 established a foundation-style funding system and statewide property tax framework intended to better align spending with student needs. But many critical implementation decisions remain unsettled. Yield setting, cost allocation, and fiscal modeling assumptions are still under debate as school budget deadlines approach.

Without clarity, communities and employers cannot reliably anticipate property tax impacts, reinforcing broader concerns about fiscal predictability.

Governance and Rural Realities

Governance and redistricting have emerged as some of the most visible and contentious elements of reform. The House Education Committee continues reviewing consolidation models, with cautious support from statewide education organizations for smaller districts than originally proposed. That support remains conditional and focused on minimizing disruption for students and families.

Debate continues over how to structure superintendent oversight and define consolidation metrics. Should it be driven by student population, number of schools, principals, or a blended formula? These questions play out differently in rural and urban communities, where geography, transportation, and staffing capacity vary widely.

For many rural communities, governance reform is not just structural, it is about identity, access, and operational feasibility.

Equity, Choice, and Tuitioning Towns

Equity considerations run through nearly every aspect of the debate. Lawmakers continue to examine the role of independent schools, eligibility standards, and the future of tuitioning towns.

For tuitioning communities, the issue is continuity and access. For the broader system, it is fairness, consistency, and cost exposure. Rural areas emphasize transportation and limited capacity, while more densely populated communities focus on scale and administrative burden.

Durable reform must recognize Vermont’s geographic diversity and avoid one-size-fits-all solutions that create unintended inequities.

Career and Technical Education and Workforce Alignment

Career and technical education remains central to the conversation. Act 73 anticipated additional work to incorporate CTE into the foundation formula, recognizing its role in workforce readiness and economic mobility.

Workforce alignment is not peripheral, it is foundational to Vermont’s long-term competitiveness.

A sweeping proposal would significantly restructure CTE governance and funding through a new statewide education service agency model. Supporters argue it could expand access and better align programs with workforce demand. Legislators have raised unresolved questions about transportation, regional voice, accountability, staffing, administrative costs, and funding flow.

The core question is whether centralization would increase efficiency and consistency, or distance programs from local workforce needs and community partnerships.

Fiscal Uncertainty and Pressure

Fiscal uncertainty has been especially visible in House Ways and Means. Updated school budget data, yield setting, and cost drivers remain under review. Briefings from the Joint Fiscal Office reinforce that unsettled district boundaries, unresolved labor costs, and regional variation limit the reliability of current modeling.

Lawmakers have expressed frustration about evaluating proposals without clear evidence of how they will affect both property taxes and student outcomes, even as expectations for near-term affordability relief rise.

Delivering immediate tax stabilization while redesigning the system presents a significant structural challenge.

The Broader Economic Context

This debate is unfolding against a broader economic backdrop. The Vermont Futures Project Economic Action Plan and Vermont Competitiveness Dashboard consistently highlight workforce shortages, demographic decline, cost of living pressures, and tax burden.

Education policy directly shapes workforce development, employer confidence, and long-term growth.

A system that is unaffordable is not sustainable. A system focused narrowly on cost without protecting quality and equity will fail students and weaken Vermont’s long-term economic prospects.

What Happens Next

As crossover approaches, committees are advancing major proposals on governance, funding, equity, and workforce alignment, but many difficult questions remain unresolved.

Education reform will remain the center of gravity at the State House throughout this biennium. The decisions made in the coming weeks will shape school governance, property tax bills, student opportunity, workforce readiness, and Vermont’s long-term competitiveness.

The Vermont Chamber will continue engaging with a focus on affordability, predictability, workforce alignment, and data-informed outcomes that support both students and Vermont employers.

Governor Phil Scott’s 2026 budget address, the second major policy speech of the session following the State of the State, reinforces a clear throughline: Vermont’s affordability crisis is the product of structural imbalance, not a lack of spending. With a $9.4 billion budget proposed without broad-based tax increases, the Governor framed the year ahead as a return to fiscal reality after years of federal stimulus, emphasizing discipline, prioritization, and reform. 

Governor Scott’s budget priorities closely align with the Vermont Chamber’s legislative priority framing to find a unified path toward affordability and economic resilience. The Governor underscored that rising costs in education, healthcare, and energy are crowding out investments in housing, workforce, and community vitality—an assessment consistently reinforced by employer feedback and reflected in the Vermont Competitiveness Dashboard, which shows Vermont’s cost structure as a persistent barrier to growth. This framing is reinforced with targeted investments and policy tools aimed at reducing cost drivers while maintaining support for housing, workforce pathways, and community stability. 

Education: Cost Containment Must Follow Reform 

Education dominated the address, and for good reason. The Education Fund has grown nearly 40 percent in five years, with property taxes rising more than 40 percent over the same period. At the same time, Vermont continues to face declining enrollment and demographic pressure, underscoring a growing mismatch between cost and scale. The Governor’s call to complete Act 73, paired with targeted property tax relief and an openness to spending caps, aligns with the Chamber’s position that affordability cannot be achieved without bending the cost curve. 

Notably, the budget pairs cost containment with continued investment in workforce-aligned education pathways, including dual enrollment, early college, adult education, and the Vermont Trades Scholarship Program, reinforcing the need to connect education spending with labor market outcomes.  

Housing: Aligning Investment with Permitting Reform 

The budget continues strong support for housing, including permanent funding for the Vermont Housing Improvement Program and renewed Downtown and Village Center Tax Credits. Just as important is the focus on reducing the regulatory barriers that slow housing construction. The Vermont Chamber has long argued that money alone cannot solve Vermont’s housing shortage without regulatory alignment, and the Governor’s emphasis on both supply and speed reflects that reality. 

Energy and Healthcare: Affordability as a Competitiveness Issue 

The Governor’s critique of rising energy and healthcare costs mirrors what Vermont employers experience daily. Vermont consistently ranks poorly on energy affordability and healthcare cost indicators relative to peer states, placing upward pressure on wages, benefits, and operating costs. Within the proposed budget, this focus is reinforced through tools aimed at stabilizing healthcare costs and premiums, including authority to pursue federal waiver strategies and investments designed to preserve access while improving affordability. The Governor’s call to recalibrate energy policy toward affordability and reliability, and to expand healthcare choice while lowering costs, aligns with the Chamber’s advocacy for pragmatic solutions that protect both households and job creators. These systems directly shape Vermont’s cost structure and its ability to attract and retain workers. 

Public Safety and Workforce Stability 

In his FY26 budget address, Governor Phil Scott framed public safety investments, accountability reforms, and expanded treatment and recovery services not simply as social policy, but as essential economic infrastructure. The Governor’s budget proposal reinforces this framing through targeted investments that expand pretrial supervision capacity, strengthen accountability measures, and increase access to treatment and recovery services, explicitly recognizing that public safety, stability, and workforce participation are deeply interconnected. Safe downtowns, reliable workforce participation, and functional systems matter to every sector of Vermont’s economy and are foundational to business confidence and community vitality. 

The Bottom Line 

The budget reflects a disciplined approach grounded in the reality that Vermont cannot spend its way out of an affordability crisis. The Governor has laid out a framework that prioritizes reform over rhetoric. The challenge now shifts from diagnosis to execution. 

As the session advances, the Vermont Chamber will remain focused on ensuring these proposals translate into durable policy that restores affordability, predictability, and long-term economic resilience for businesses and communities statewide. 

Vermont legislators gathered Friday for the inaugural meeting of the Caucus for Vermont’s Economy, a bipartisan group of legislators that represents communities around the state, focused on advancing policies that strengthen the state’s economy and improve the well-being of Vermonters. The timing could not be more critical. The recently released Vermont Competitiveness Dashboard from the Vermont Futures Project underscores why: Vermont ranks last in the nation in economic momentum, 50th in workforce retention, 49th in population growth, and near the bottom in housing permits and business competitiveness. 

While these rankings paint a sobering picture, the caucus demonstrates that data is not destiny. By bringing together legislators from both the House and Senate, leaving party roles at the door, the group is creating a forum to turn information into action. The Caucus is led by Co-chairs Rep. Abbey Duke and Rep. Ashley Bartley, Rep. Jonathan Cooper (Clerk) and Reps. Chris Morrow and Kate Lalley (Communications). In preparation for the caucus, all legislators were surveyed to gauge interest and collect insights on the expertise members could bring. The result is a diverse and talented group, committed to looking at Vermont’s economic challenges from a “big picture” perspective. 

At the inaugural session, caucus leaders emphasized breaking down committee silos, fostering collaboration across the legislature, and bringing diverse perspectives to complex problems. Members shared priorities and ideas ranging from Vermont’s highly restrictive regulatory environment, housing, and creating a state in which Vermonter can thrive. The conversation highlighted that while Vermont faces real challenges, it also has clear opportunities to reverse trends when lawmakers act decisively together. 

The caucus aims to translate urgency into action. By focusing on adopting policies that grow the economy, and expanding opportunity for all Vermonters, the group hopes to move beyond gridlock and build a more resilient, competitive Vermont. For businesses and communities, the caucus launch is a signal that the state’s leaders are confronting difficult data with collaboration, creativity, and optimism, turning insight into meaningful solutions.