All Roll Calls
Yes: 299 • No: 215
VermontH.4542025-2026 SessionHouseWALLET
An act relating to transforming Vermont’s education governance, quality, and finance systems
Sponsored By: Rep. Casey Toof
Signed by Governor
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Bill Overview
Analyzed Economic Effects
39 provisions identified: 16 benefits, 12 costs, 11 mixed.
Income-based property tax relief for homeowners
Eligible homeowners with household income up to $115,000 get an exemption on the first $425,000 of housesite value. It ranges from 95% at income up to $25,000 to 10% above $110,000 through $115,000; dollar amounts adjust annually for inflation. Claimants must own the homestead on April 1, live in Vermont all taxable year, and not be another taxpayer’s dependent. Qualifying cooperative members and homeowners on tax-exempt nonprofit or community-land-trust land receive credits based on allocated taxes and their exemption percentage. Cooperative members can also apply for municipal credits. The state supplies forms and notices before June 1; towns distribute notices with residential tax bills and delinquency notices, with directions to translations in Vermont’s five most common non-English languages.
Fewer schools qualify for public tuition
District-paid tuition remains available for Vermont residents at public schools in Vermont or another state, and specified Vermont independent schools. One independent-school category requires approval by July 1, 2025, and location in a district or supervisory union lacking public schools for some grades on July 1, 2024. At least 25% of its 2023–2024 enrollment must have been district-funded; it must meet class-size rules or obtain a geographic-isolation or implementation-plan waiver. The law removes general tuition eligibility for independent schools outside Vermont. Therapeutic schools in Vermont or elsewhere qualify only for students with an IEP, Section 504 plan, written local education agency agreement, or court order.
Unset education tax rates rise 10%
The statewide education tax rate funds Education Fund costs other than supplemental district spending. The calculation accounts for forecast non-property-tax revenue and unreserved fund money. When lawmakers do not adopt a yearly rate, the rate becomes 110% of the previous fiscal year’s rate. That is a 10% rate increase, not necessarily a 10% increase in each household’s final bill.
Homeowner tax rates shift in stages
For fiscal years 2029–2032, district homestead tax rates include a fading transition adjustment. The transition gap equals the district’s fiscal year 2028 rate minus the uniform fiscal year 2029 rate without transition. The adjustment adds 80% of that gap in 2029, 60% in 2030, 40% in 2031, and 20% in 2032. A positive gap raises the otherwise applicable rate; a negative gap lowers it.
Homeowners get capped local tax credits
Eligible homeowners with household income up to $47,000 can receive a municipal property tax credit. Taxes must exceed 1.5% of income up to $9,999, or 3% for income from $10,000 through $47,000. The credit cannot exceed the lesser of the reduced municipal tax amount or $2,400. Claimants must own the homestead on April 1, live in Vermont for the full taxable year, and not be another taxpayer’s dependent. The revised credit definition covers prior-year municipal tax liability, excluding statewide property tax liability and the homestead owner credit.
Current students keep public tuition support
The law protects qualifying students from losing district-paid tuition under the new school eligibility rules. The district must have paid tuition under the rules in effect on June 30, 2025. The resident student must have attended the approved independent school in 2024–2025 or been accepted for 2025–2026. Payments continue until the student graduates from that school.
Late or excessive claims bring penalties
Credit claims filed after October 15 through the following March 15 lose $150, but cannot fall below zero. Exemption claims filed in that period carry a $150 penalty; neither claim is allowed after that March 15 deadline. Late credits go directly to claimants, and towns need not issue adjusted bills for either type of late claim. The Commissioner can impose a penalty of 10% of an excessive credit or exemption claim. Relief already paid or credited can be reduced or canceled, and paid amounts can be recovered with interest.
Property owners face new classification reporting
Each parcel receives homestead, nonhomestead residential, or nonhomestead nonresidential classifications, updated by assessors annually by June 1. Homestead classification requires a current-year declaration filed by October 15; nonhomestead residential classification follows the Commissioner’s residential-property definition. Mixed-use parcels are split by floor space, but homesteads retain that status when business use takes no more than 25%. Taxpayers must report property-use information for calendar year 2027. The classifications do not by themselves establish how much an owner’s tax bill changes.
Extra school spending brings property taxes
Districts that approve supplemental school spending trigger an extra tax on homestead and nonhomestead property. The district rate equals certified supplemental spending per pupil divided by the supplemental spending yield. Towns adjust that rate using their common level of appraisal and the statewide adjustment. State receipts go to the Education Fund, with excess receipts reserved to cover supplemental-spending payment shortfalls. Only the needed amount covers shortfalls; money left at year-end reduces the next year’s statewide education property tax rate.
School spending tax calculation changes
The education property tax spending adjustment is the greater of one or a district spending ratio. That ratio divides per-pupil education spending plus excess spending by the property dollar equivalent yield. The denominator no longer multiplies that yield by the statewide adjustment. Removing that factor can raise or lower the ratio, depending on the statewide adjustment; the minimum remains one.
Overdue taxpayers get repayment plan opportunity
A municipal tax collector can extend a real-estate tax warrant only when at least $1,500 is owed. The taxes must also be overdue for more than one year. Before taking that action, the collector must offer an opportunity to enter a written, reasonable repayment plan. These protections do not erase the tax debt.
Towns stop keeping late-claim billing fees
Towns can no longer retain $15 for issuing a new bill after a qualifying late property tax credit claim. The removed retention covered claims filed after April 15 and before September 2. The separate 0.225% municipal retention for timely tax remittance remains.
Districts cover qualifying career center tuition
Districts must pay the full tuition charged for their students at qualifying independent career and technical centers. The school must be an approved independent school in Vermont functioning as an approved area career and technical center. This requirement overrides the other tuition and fee rules. The payment goes from the district to the school, not to the family.
Property hearing officers get hourly pay
The Commissioner of Taxes pays property valuation hearing officers $38 per hour plus an applicable cost-of-living adjustment. That adjustment matches any adjustment approved for exempt employees by the Secretary of Administration. Officers also receive payment for reasonable expenses.
Refund payments earn homeowners tax credit
Taxpayers can request that their income tax refund pay statewide education property tax. The request must be filed by October 15. Homestead owners who choose this option receive an additional property tax credit worth 1% of the refund amount allocated.
Municipalities can appeal school aid decisions
A qualifying municipal corporation harmed by an Agency of Education order, allocation, or award can appeal to Superior Court. It must file within 30 days in the county where the project is located. This gives municipalities a court review process, not a direct household payment.
School voters get clearer budget disclosures
Budget materials must show expected statewide education tax rates for each tax classification and the supplemental spending yield. They must show supplemental spending and long-term student membership for the proposed budget and the prior three years. Ballots must state spending above the educational opportunity payment, estimated extra spending per pupil, and its tax rate. At an annual or special meeting, voters can choose how to give notice of budget availability instead of distributing the budget. That notice must arrive at least 30 days before the annual meeting.
District funding uses an inflation-adjusted base
The law sets a $15,033 per-pupil base; each district's educational opportunity payment equals that base times its weighted student count. By November 15 each year, the Secretary adjusts the base using the specified government inflation measure from fiscal year 2025 onward, rounding upward to whole dollars. Lawmakers fund annual payments, including applicable supplemental spending, in thirds due September 10, December 10, and April 30. The schedule applies even when a district has not adopted a budget. The law also removes Education Fund authority for specified property-tax relief payments without ending the underlying payments.
Funding supports new school district maps
For fiscal year 2026, General Fund support includes $50,000 for redistricting facilitators and $100,000 for digital support or consultants. It also includes $10,000 each for legislative and nonlegislative task force members’ pay and expenses. Another $15,000 supports voting ward working group members’ pay and expenses. A separate $200,000 General Fund appropriation pays for contracts and software to create school voting wards. Members receive statutory daily pay and expense reimbursement for at most eight task force meetings or 10 working group meetings.
More funding for small rural schools
Districts get annual grants based on each qualifying school’s two-year average enrollment. Small-school grants start at $3,157 per pupil; sparse-school grants start at $1,954 per pupil. Both amounts rise with inflation. Small schools must average fewer than 100 pupils and receive an annual State Board finding that they are small by necessity. Sparse schools need an annual necessity finding and must be in communities with fewer than 55 people per square mile.
Schools get aid for emergency repairs
The Secretary can award construction aid for a school project deemed an emergency. Aid covers 30% of eligible project costs, with eligible costs capped at $300,000. The largest grant under those limits is $90,000. The money supports school projects, not direct household payments.
State aid helps schools fund construction
Eligible districts can receive 20% of eligible construction debt service, plus rule-based bonuses up to another 20%, subject to annual funding. Projects need preliminary and final approval, proof that another approach cannot reasonably meet the need, and voted funds or bond authority before priority assignment. Final approval requires financing and competent supervision; construction cannot start earlier without the Secretary's advance approval for good cause. Projects under $50,000 need no performance bond or irrevocable letter of credit, and playgrounds must follow federal safety guidance. The Agency administers applications, technical help, and a special fund for construction, master planning, emergencies, and administration; from July 1, 2026, it takes construction rulemaking authority, keeps existing rules until changed, and advisory board members receive pay and expense reimbursement for up to six meetings yearly.
State funds school changes and planning
For fiscal year 2026, the law provides $2.865 million from the General Fund for education transformation. This includes $200,000 for school boards changing governance, $562,500 for five temporary agency positions, and $2.1025 million for consolidation and education-quality contracts. A separate $200,000 pays contractors to help review and update State Board rules. Another $150,000 funds one permanent Agency position supporting the three-year special education strategic plan. The Agency must request funding for that permanent position in later annual base budgets.
Towns get relief for property agreements
Eligible property agreements or exemptions reduce a municipality’s education tax liability when they affect the education tax grand list. The reduction equals the gap between taxes collected and taxes on fair market value at that year’s equalized rate. It lasts only for the agreement or exemption, without extension or renewal, and never longer than 10 years. This is municipal tax relief, not a separate payment to property owners.
Household tax relief claims face limits
Only one person per household can claim a homestead exemption, a property tax credit, or both each taxable year. Anyone receiving another state’s homestead exemption or property tax credit that year cannot receive a Vermont credit. Claims filed by October 15 can be amended within three years after filing. Corrections can cover housesite value, municipal tax, ownership share, or household income—but no longer housesite education tax.
Interim homeowner school tax rule ends
The law ends the interim homestead education tax rule for districts without a budget vote by June 30. It also removes the related rate-setting rule used after a district later adopts a budget. These provisions do not specify the replacement tax treatment or establish that homeowners pay more.
Schools get statewide graduation and calendar requirements
The State Board must adopt statewide graduation standards using its standards and Agency recommendations. They begin in the 2027–2028 school year for the graduating class of 2031 and later classes. The Secretary must also develop and publish one statewide calendar for public schools, including career and technical centers. That calendar begins in the 2028–2029 academic year.
Towns must share regional property reappraisals
The law creates 12 regional assessment districts where towns jointly hire outside contractors and reappraise property every six years. Each county forms a district, except Franklin joins Grand Isle and Essex joins Orleans. Beginning January 1, 2027, new municipal reappraisal orders and contracts must be part of a regionalized system. On January 1, 2030, existing orders without contracts lose legal effect unless part of that system. The rules change how values are assessed but do not establish how any individual tax bill changes.
High schools can charge extra tuition
With State Board approval, receiving schools can charge sending districts an extra fee for publicly funded students in grades 9–12. The fee cannot exceed 5% of the base amount per student. Every sending district's voters must approve enough supplemental spending to cover it. The fee must be uniform, necessary for educating those students, and used for them—not to shift other costs. Qualifying independent career and technical centers are excluded, and State Board fee rules are due July 1, 2027.
High-spending schools lose penalty relief options
The law repeals the provision suspending the excess-spending penalty, including its hold-harmless protection and ballot-language requirement. It also ends authority to use part of a high-spending penalty for specified consultants or reorganization discussions. That support included up to $5,000 in state payment. The supplied text does not show the resulting penalty amounts or household tax changes.
Several separate school aid programs end
The law ends the statutory special education census grant to school districts. It also ends categorical state aid for English learner services and the statutory support provision for merged districts. These repeals remove separate aid programs, not a stated household benefit. The supplied provisions do not give the amounts lost by each district.
State funds school funding formula study
The law provides $400,000 from the General Fund to the Joint Fiscal Office in fiscal year 2026. The office hires contractors to recommend updates to the school funding formula and provide related analysis. This appropriation does not itself change household taxes or school benefits.
Class-size enforcement has construction cost limits
After three straight school years below class-size minimums, the Secretary can recommend enforcement actions allowed by state law. This applies even when the school meets every other education quality standard; the State Board must follow the required process. The Board cannot order school or district consolidation for these violations when resulting construction costs exceed the district's capital reserve. That protection lasts until lawmakers establish new district boundaries and take further action on consequences for failing education quality standards.
Education board appointments and local rules change
As terms expire beginning July 1, 2025, appointments to the 10-member State Board are shared among executive and legislative leaders. The House Speaker makes the first transition appointment, the Senate Committee on Committees the second, and the Governor the third and remaining five nonstudent appointments. Two seats are for students: a junior nonvoting member and a two-year member who votes only in the second year. The annual open student application requires at least two more years as a secondary student; specified Governor appointments need Senate consent. The law also repeals the education provision for unorganized towns and gores; the supplied text does not explain its requirements or a replacement.
Schools must meet minimum class sizes
Public schools, including career technical centers, must average at least 10 students in first grade and 12 in grades 2–5. Required subjects must average at least 15 students in grades 6–8 and 18 in grades 9–12. Multiage K–8 classes may span only two grades, and all classes must meet fire-code occupancy limits. Exemptions cover prekindergarten, kindergarten, career and technical education, flexible pathways, terminal courses, advanced placement, specialized-equipment courses, driver's education, and specified small-group services; boards may seek geographic-isolation or implementation-plan waivers. By August 1, 2026, the State Board must start rules for public schools and independent schools seeking public tuition, including a similar chance for independent schools to correct violations.
District funding changes phase in gradually
District payments include a temporary adjustment during fiscal years 2029–2032. The transition gap equals inflation-adjusted fiscal year 2025 education spending minus the district's fiscal year 2029 educational opportunity payment. The adjustment equals 80% of that gap in 2029, 60% in 2030, 40% in 2031, and 20% in 2032. A positive gap raises the payment; a negative gap lowers it.
District-paid tuition follows student funding weights
A district must pay tuition for each resident student attending a receiving school. Payment equals the statutory base amount times one plus the student's applicable funding weights; the fiscal year 2029–2032 rule uses the adjusted base. Beginning July 1, 2029, older rules for high school tuition, tuition limits, and calculated net cost per pupil are repealed. Repealed rules also cover rate notices, special education charges, and tuition overcharges or undercharges. These are school funding payments, not direct household tuition bills.
Extra school spending faces shrinking caps
The law caps voter-approved supplemental school spending at a share of the base amount times district long-term membership. The general cap is 5%, but temporary caps allow 10% in fiscal years 2029–2033. The cap falls to 9% in 2034, 8% in 2035, 7% in 2036, and 6% in 2037. Interstate school districts are exempt from these limits.
Student needs reshape school funding counts
Funding counts add a weight of -0.54 for prekindergarten and 1.02 for students at or below 185% of federal poverty. English learner weights are 2.11 at Level 1, 1.41 at Levels 2–3, 1.20 at Level 4, and 0.12 at Levels 5–6. English learner Newcomer or SLIFE students get an extra 0.42; disability Categories A, B, and C receive 0.79, 1.89, and 2.49. Students with multiple disabilities count only in Category C, and the former small-school and low-population-density weights end. Districts must report weighting information annually by the Agency's deadline, and receiving schools must promptly provide requested student information to sending districts.
Sponsors & Cosponsors
Sponsor
Rep. Casey Toof
Affiliation unavailable
Cosponsors
Beth M Quimby
Republican • House
Rep. Christopher Taylor
Affiliation unavailable
Joshua Dobrovich
Republican • House
Patricia A McCoy
Republican • House
Roll Call Votes
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
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
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 agreed to on a Roll Call Passed -- Needed 71 of 142 to Pass -- Yeas = 87, Nays = 55
Yes: 87 • No: 55 • Other: 1
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
Actions Timeline
House message: Governor approved bill on July 1, 2025
6/16/2025HouseSigned by Governor on July 1, 2025
6/16/2025HouseDelivered to Governor on June 25, 2025
6/16/2025HouseHouse message: House adopted Conference Committee report
6/16/2025HouseWhich was agreed to on a Roll Call Passed -- Needed 71 of 141 to Pass -- Yeas = 96, Nays = 45
6/16/2025HouseRep. Headrick of Burlington demanded yeas and nays
6/16/2025HouseRep. McCoy of Poultney moved to deliver the bill to the Governor forthwith
6/16/2025HouseCommittee of Conference report adopted (House bill)
6/16/2025HouseWhich was agreed to
6/16/2025HouseDivision results Yes, 113; No, 26
6/16/2025HouseDivision demanded
6/16/2025HouseRep. Houghton of Essex Junction moved to suspend rules to permit consideration of an objectionable committee of conference report
6/16/2025HouseCommittee of Conference report ruled out of order on point of order raised by Rep. McCann of Montpelier
6/16/2025HouseRules suspended and taken up for immediate consideration, pending entry on Notice Calendar, as moved by Rep. McCoy of Poultney
6/16/2025HouseSenate Message: Report of Committee of Conference adopted
6/16/2025SenateRules suspended & messaged to House forthwith, on motion of Senator Baruth
6/16/2025SenateSenator Williams explained vote
6/16/2025SenateSenator Mattos explained vote
6/16/2025SenateSenator Ingalls explained vote
6/16/2025SenateSenator Heffernan explained vote
6/16/2025SenateSenator Douglass explained vote
6/16/2025SenateCommittee of Conference report adopted on roll call Passed -- Needed 15 of 29 to Pass -- Yeas = 17, Nays = 12
6/16/2025SenateRoll Call, Requested by Sen. Gulick
6/16/2025SenateSenator Chittenden explained vote
6/16/2025SenateRules suspended to permit consideration of an objectionable report of Committee of Conference, on Roll Call 26-3.
6/16/2025Senate
Bill Text
As Enacted (ACT 73)Opens in a new window
7/3/2025
As Passed by Both Chambers
6/19/2025
As Passed by Both Chambers (Unofficial)
6/19/2025
Senate Proposal of Amendment
5/27/2025
Senate Proposal of Amendment (Unofficial)
5/27/2025
As Passed by the House
4/15/2025
As Passed by the House (Unofficial)
4/15/2025
As Introduced
2/28/2025
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