VermontH.4542025-2026 SessionHouseWALLET

An act relating to transforming Vermont’s education governance, quality, and finance systems

Your PRIA Score

Score Hidden

Personalized for You

How does this bill affect your finances?

Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.

Free to start

Bill Overview

Analyzed Economic Effects

32 provisions identified: 14 benefits, 3 costs, 15 mixed.

New income-based breaks for homeowners

Beginning July 1, 2028, homeowners with household income up to $115,000 get a percent exemption on the first $425,000 of home value. Lower incomes get bigger exemptions (about 95% at the lowest incomes down to 10% near $115,000). Homeowners with income up to $47,000 also get an extra statewide education tax credit based on 0.5%, 1.5%, or 2.0% of income and the first $400,000 of value. A separate municipal credit for income up to $47,000 covers municipal taxes above 1.5% or 3.0% of income. If you buy a home midyear, you can still claim the exemption that year if you file on time. Members of housing co-ops qualify, and land-trust owners can count a certified share of tax toward the municipal credit.

Caps and land limits on property relief

Starting July 1, 2028, the renter credit is capped at $2,500. The municipal property tax credit is capped at $2,400, and total property credits cannot exceed $5,600. The housesite counted for homestead taxes is limited to two acres per dwelling unit, up to 10 acres per parcel. Larger lots may see more value taxed.

New property tax classes and 2027 forms

The law creates three tax classes for every parcel: homestead, nonhomestead residential, and nonhomestead nonresidential. Towns must list the class for each parcel by June 1 each year, starting July 1, 2028. For 2027, taxpayers report how they use their property so the state can assign a class; this starts January 1, 2027 if new school district boundaries are enacted by then. The Tax Department also studies tax-rate multipliers and sends options to lawmakers by December 15, 2025. Your bill may go up or down based on your parcel’s class.

Regional reappraisals every six years

The law creates 12 regional assessment districts to run property reappraisals. Towns in each district must fully reappraise property values every six years using standard rules starting January 1, 2029. The Tax Department provides setup recommendations by January 15, 2026. Hearing officers for valuation appeals are paid $38 per hour plus cost-of-living increases starting July 1, 2025. Reappraisals can raise or lower your assessed value and your taxes.

Pause local reappraisals; plan regional system

Starting July 1, 2025, towns cannot start new reappraisals unless they join a regional system. No new local reappraisal contracts after January 1, 2027, except in a regional system. Any reappraisal order without a contract by January 1, 2030 ends unless it is regional. The Tax Department reports each January 15 from 2027 to 2030. Also, a related tax-classification subdivision is repealed on July 1, 2028 if no new multiplier is enacted by then.

Current private school students keep tuition

If your child was enrolled in 2024–2025 or accepted for 2025–2026 at an approved independent school as of June 30, 2025, your district must keep paying their tuition until they graduate from that school.

New state aid for school buildings

Vermont now runs a statewide school construction aid program with its own special fund. Base aid is 20% of eligible debt service, plus up to 20% more in bonuses. Emergency aid pays 30% of eligible costs, up to $300,000 of project cost. Districts need preliminary approval and a local vote or bond. Towns can appeal Agency decisions in county Superior Court within 30 days. On July 1, 2026, construction rulemaking shifts to the Agency and older construction statutes are repealed. An eight-member advisory board guides the program and ends on July 1, 2035.

Nonhomestead statewide school tax rate

The nonhomestead education tax rate is $1.59 per $100 of value divided by the statewide adjustment. To estimate your bill, divide your taxable nonhomestead value by 100 and multiply by 1.59, then divide by the statewide adjustment.

Limits on extra local school spending

Districts (not interstate) are capped each year on voter‑approved spending above the baseline. The standard cap is 5% of (base amount × long‑term membership). During the transition, higher caps apply: 10% in FY2029–FY2033, 9% in FY2034, 8% in FY2035, 7% in FY2036, and 6% in FY2037.

Phase-in to new homestead tax rate

From FY2029 to FY2032, each district’s homestead rate is adjusted by its transition gap times a yearly factor: 0.80 (FY2029), 0.60 (FY2030), 0.40 (FY2031), and 0.20 (FY2032). The transition gap is the difference between the uniform FY2029 rate (without a transition) and the district’s FY2028 rate. The Tax Department must report by December 15, 2027 with recommendations to limit rate increases during the transition.

Class size minimums and tighter tuition rules

Average class sizes must meet new minimums: grade 1 is 10; grades 2–5 are 12; grades 6–8 are 15; and grades 9–12 are 18 in required classes. PreK, kindergarten, CTE, small‑group services, and certain special classes are excluded. Multiage K–8 classes are limited to two grade levels, with waivers possible for isolation. District‑paid tuition to private schools is limited to Vermont schools that meet tests like approval by July 1, 2025, at least 25% district‑tuition students in 2023–24, and meeting class‑size rules (with waiver for isolation).

New tuition rules and possible fees

Districts pay elementary tuition as base amount × (1 + applicable weights). A receiving high school may charge up to 5% more if approved by the State Board and voters in each sending district; the same extra fee must apply to all publicly funded students. The State Board must set approval rules by July 1, 2027 to show fees are necessary and used for those students. Districts must pay full tuition for students at approved independent career and technical centers. Older tuition statutes are repealed on July 1, 2029.

New school funding base and transition

The per‑pupil base amount is $15,033 and rises each year for inflation by November 15 using the NIPA deflator. A district’s Educational Opportunity Payment equals the base amount times its weighted long‑term membership. From FY2029 to FY2032, districts get a transition add‑on equal to a share of their transition gap (80%, 60%, 40%, then 20%). The Joint Fiscal Office hires experts to recalibrate the formula and reports by December 1, 2026, funded with $400,000. Several older laws are repealed to move off past grants, including the special education census grant and English learner categorical aid.

Clearer property tax bills and notices

Property tax bills must show the homestead and nonresidential rates before equalization and explain how equalized rates are calculated. The back of the bill must explain the common level of appraisal. Each year before June 1, towns include a plain-language notice about the homestead exemption and municipal credit, with links to translations in the five most common non‑English languages. The annual notice starts July 1, 2028.

School budget and ballot must show taxes

School boards must share the proposed budget at least 10 days before any money vote. If voters choose a notice option, the board must give notice at least 30 days before the meeting. Budgets and ballots must show key revenues and expenses, estimated per‑pupil supplemental spending, and the anticipated tax rate.

Extra 1% credit for refund to school tax

You can send part of your income tax refund to pay your homestead statewide education property tax. If you do, you get an extra property tax credit equal to 1% of the amount you allocate. This option starts July 1, 2028.

Homestead exemption rises with inflation

The Tax Commissioner updates homestead exemption dollar amounts each year for inflation. The update uses a government price index from fiscal 2025 and is done by November 15, with amounts rounded up. This rule starts July 1, 2028.

Limits on state-ordered school consolidations

The State Board of Education may not order a school or district consolidation when fixing class-size minimums would require construction costs above the district’s capital reserve. This limit remains until the Legislature sets new school district boundaries and takes further action.

More aid for small schools, adult ed

Qualifying small schools get $3,157 per student, using a two‑year average enrollment, adjusted for inflation each year. Qualifying sparse schools get $1,954 per student on the same basis and index. Adult education and literacy providers get 26% of the categorical base per student who completes diagnostics, averaged over two years. Payments are split 40% from the Education Fund and 60% from the General Fund.

More school finance info and planning

Each year by October 1, the Agency publishes statewide per‑pupil spending and student‑teacher ratios for similar schools. By December 15, 2025, the Agency reports clear minimums for student transportation covered by the reimbursement grant. By the same date, the Joint Fiscal Office reports on inflation measures for school funding and ways to align prekindergarten and early care funding.

Special education plan and staffing

By September 1, 2025, the Agency must report why extraordinary special education costs are rising. By December 1, 2025, the Agency must file a three-year plan with goals, timelines, and a path to weighted funding, and then send yearly progress reports through 2029. One permanent Agency position is created and funded with $150,000 in FY2026 to run this work.

Staff and funds to run overhaul

The Agency gets $2,865,000 in FY2026 to support education transformation. It sets up five limited service positions for operations, data, curriculum, teaching, and school facilities. The funds include $200,000 to support school boards in transition, $562,500 for positions, and $2,102,500 for contracted services to help districts consolidate and align education quality.

Safeguards and oversight for Education Fund

The law clarifies what money goes into the Education Fund and what it can pay for. It creates a Supplemental District Spending Reserve to cover shortfalls and, if money is left at year end, to lower next year’s statewide property tax rate. The Education Fund Advisory Committee must hold its first meeting by July 15, 2026 and begins its formal duties on July 1, 2028. The committee sends recommendations each year by December 15.

Default school tax rate if lawmakers stall

Each year lawmakers set the statewide education property tax rate. If they fail to do so, the rate automatically becomes 110% of last year’s rate for that year. This default stays in place until lawmakers pass a rate.

Repayment plans before a tax sale

If you owe $1,500 or more and are over one year late, the collector must offer a written repayment plan before extending a tax sale warrant. If a mobile home park owner gives notice, the collector must start sale steps within 15 days and hold a sale within 60 days. Towns may keep 0.225% of education tax receipts if they remit on time and $15 for each late property tax credit claim billed after April 15 and before September 2. These rules begin July 1, 2025.

Fix tax errors and fight fraud

The Taxpayer Advocate can correct wrong homestead or nonhomestead labels and fix homestead, municipal, or renter credit claims. Fraudulent claims are disallowed; you must repay with interest, and helpers can face up to a $1,000 fine or one year in jail. For nonfraudulent excess claims, a 10% penalty applies to the excess. These changes take effect July 1, 2028.

Stricter filing dates, longer correction window

You must file homestead and municipal property tax claims by the normal income tax due date. A municipal credit claim filed after October 15 but by March 15 is cut by $150 and is paid to you. A homestead claim filed in that late window adds a $150 penalty you must pay, and no claims are allowed after March 15. If you filed by October 15, you can amend key items for three years after the deadline. Tax return details used to set these benefits are confidential. Most of these rules start July 1, 2028.

New district maps and warding work

The state set up a Commission, Task Forces, and a Working Group to design new school district boundaries and voting wards and to plan the transition. Reports are due across 2024–2026, and warding follows rules like compactness and equal voting weight. The law funds this work: $50,000 for facilitation, $100,000 for digital support, $10,000 each for per diem for nonlegislative and legislative members, $15,000 for Working Group per diem, and $200,000 for mapping software and contracts.

New makeup and rules for State Board

The State Board now has 10 members, including two secondary students. Appointments are shared among the Governor, Speaker, and Senate committee, with terms and diversity goals set in law. Current members finish their terms, and a set order of new appointments begins July 1, 2025. The Governor may remove a member after notice and a hearing for cause. Vacancies are filled by the original appointing authority.

New student weights and funding floor

School funding now uses updated student weights. Added weights include 1.02 for economic disadvantage; English learners at 2.11, 1.41, 1.20, and 0.12 by level; newcomer density at 0.15, 0.12, or 0.07; and special education at 0.79, 1.89, or 2.49 by category. A student with multiple disabilities is only counted in Category C. Districts get a hold‑harmless floor so weighted counts cannot drop more than 3.5% year to year. The categorical base is $6,800 and rises each year for inflation. The state recalculates weights at least every five years, with a one‑year delay before new weights take effect.

Statewide class sizes, graduation, calendar

The Agency must recommend statewide graduation standards by January 1, 2026. The Secretary must publish a statewide school calendar by January 15, 2027 for the 2028–2029 school year. The State Board must start updating rules by August 1, 2026 so class-size minimums apply across schools, including independent schools that take public tuition. The Board must also start rulemaking by July 1, 2027 to adopt graduation requirements for the class of 2031. The law gives $200,000 in FY2026 to support a full rules review and a report by December 1, 2026.

Annual rate proposal and reserve check

By December 1 each year, the Tax Commissioner must recommend the statewide education tax rate and the supplemental spending yield using set assumptions, including a $1.00 homestead base rate and a 2.0 applicable percentage. If the Education Fund stabilization reserve falls below 5% of the prior year’s appropriations, the Joint Fiscal Committee must review and recommend how to restore it.

Free Policy Watch

You just read the policy. Now see what it costs you.

Pick a topic. PRIA runs your household against live legislation and sends you a free personalized readout.

Pick a topic to get started

My Taxes My Health My Budget My Money My Freedom

Or tell us something more specific

Sponsors & Cosponsors

Sponsor

Conor Casey
Democratic • House

Cosponsors

Beth M Quimby
Republican • House
Valorie Taylor
Republican • House
Joshua Dobrovich
Republican • House
Patricia A McCoy
Republican • House

Roll Call Votes

All Roll Calls

Yes: 299 • No: 215

Senate vote • 6/16/2025

Roll Call, requested by Senator Gulick, Passed -- Needed 22 of 29 to Pass -- Yeas = 26, Nays = 3

Yes: 26 • No: 3

Senate vote • 6/16/2025

Committee of Conference report adopted on roll call Passed -- Needed 15 of 29 to Pass -- Yeas = 17, Nays = 12

Yes: 17 • No: 12

House vote • 6/16/2025

Which was agreed to on a Roll Call Passed -- Needed 71 of 141 to Pass -- Yeas = 96, Nays = 45

Yes: 96 • No: 45 • Other: 1

Senate vote • 5/23/2025

Roll Call, requested by Senator Ingalls, Failed -- Needed 15 of 30 to Pass -- Yeas = 13, Nays = 17

Yes: 13 • No: 17

House vote • 4/11/2025

Which was disagreed to on a Roll Call Failed -- Needed 72 of 143 to Pass -- Yeas = 60, Nays = 83

Yes: 60 • No: 83 • Other: 1