January 28, 2026
Vermont lawmakers spent Wednesday morning in committee hearings focused largely on education restructuring, property taxation, and the Agency of Human Services budget. Multiple bills and existing acts were discussed, with emphasis on regionalization models, statutory mandates, and rising administrative and compliance costs.
No floor action occurred before midday, but several proposals advanced through committee discussion that could materially affect local governance, tax administration, and program eligibility statewide.
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Education Committee: Regional Service Models and School Governance
The House Education Committee heard testimony related to S.20 and S.12, both addressing how educational services are organized and delivered across school districts.
Discussion centered on expanding the use of regional education service agencies to consolidate administrative, special education, and mental health services. Witnesses described similar models operating in other states, including Wisconsin and Pennsylvania, where regional entities support small and rural districts that lack capacity to meet regulatory and staffing requirements independently.
Committee members explored whether Vermont should move beyond voluntary participation toward mandatory regional membership. Testimony acknowledged that while voluntary models exist elsewhere, statewide mandates may be necessary to ensure consistent implementation of legislative and Department of Education initiatives.
Under S.20, lawmakers examined statutory authority that would require school districts to belong to defined regions, potentially altering local governance structures. Funding mechanisms, compliance requirements, and coordination with statewide initiatives were recurring topics.
S.12 focused on students with high-cost needs, particularly those currently placed out of district or out of state. Witnesses described regional programs that could serve these students locally, reducing transportation and placement costs while centralizing services. Mental health programming and alternative education settings were cited as potential areas of consolidation.
Health insurance purchasing for school employees was also discussed, with references to cooperative insurance pools in other states. While some out-of-state examples remain optional, Vermont lawmakers questioned whether similar arrangements could be structured as mandatory under state law.
Ways & Means Committee: Property Taxes, Reappraisal, and S.10
The House Ways & Means Committee held two sessions focused on property taxation, reappraisal policy, and implementation of Act 68 (2023) and Act 73. Discussion was anchored in part by S.10, which addresses land use change taxation and related revenue flows.
Committee members reviewed the land use change tax, which assesses a 10 percent tax when land enrolled in current use is developed, subdivided below 25 acres, or removed from the program. Municipalities may retain up to $2,000 per parcel, with remaining revenue split between the Education Fund and the General Fund.
Significant attention was paid to the six-year reappraisal cycle established by Act 68, which took effect in January 2025. Testimony from the Department of Taxes described capacity constraints affecting compliance, including a limited workforce of assessors and contractors scheduling work years into the future.
Act 73’s provisions encouraging regional assessment districts were revisited. While participation is currently optional, state officials outlined administrative advantages of centralized or state-led models, including consistency in valuation, appeals handling, and data reporting.
Lawmakers discussed the impact of common level of appraisal (CLA) adjustments on education tax rates. Examples were presented showing substantial variation in tax rate changes across municipalities within the same school district under identical budgets.
Additional discussion addressed potential statutory changes, including moving the grand list date from April 1 to January 1. Proponents cited additional time for valuation and grievance processing, while acknowledging that such a change would affect ownership, valuation, and tax liability determinations statewide.
Veterans’ property tax exemptions, current use program reimbursements, and commercial property appeals were also reviewed, along with staffing and software limitations affecting municipal tax administration.
Human Services Committee: Budget Growth and Medicaid Requirements
The House Human Services Committee received a comprehensive budget presentation from the Agency of Human Services (AHS), which administers approximately $3.7 billion annually across six departments.
For FY2027, AHS is requesting a 6.1 percent increase in general fund appropriations, totaling approximately $86.1 million. Of that amount, roughly $74.9 million is attributed to maintaining existing service levels, with the remainder directed to base initiatives.
Federal Medicaid changes were a major driver of budget growth. Officials reported a reduction in the federal medical assistance percentage (FMAP), resulting in a projected $13 million loss in federal funding that must be offset with state funds.
In addition, Vermont is implementing new federal Medicaid requirements, including work or community engagement standards and semiannual eligibility redeterminations. AHS is seeking funding for additional eligibility and enrollment staff to meet these requirements.
Prescription drug copay increases were also discussed as a cost-offset measure, consistent with federal guidelines. The changes are expected to reduce state expenditures while increasing out-of-pocket costs for some beneficiaries.
The committee reviewed a series of program reductions and reallocations, including decreased funding for refugee transitional housing due to a reported decline in arrivals. Smaller grant programs and service coordination initiatives are proposed for elimination or consolidation.
Judiciary and Other Committees
The House Judiciary Committee took testimony on a large slate of bills, including H.566, H.564, H.529, H.721, H.6, H.410, H.382, H.613, and H.171, addressing issues ranging from justice system procedures to environmental penalties and rights-related statutes. Most measures remain in early stages of review.
Additional committee activity occurred in Government Operations, Energy and Digital Infrastructure, Agriculture, and Transportation, with discussions touching on zoning authority, environmental mandates, labor issues, and infrastructure funding. No major votes were taken before midday.
Summary
By midday Wednesday, legislative activity was concentrated on structural policy questions rather than discrete votes. Education and tax committees continued examining regionalization models that would centralize authority and standardize compliance. Human services discussions highlighted the fiscal impact of federal mandates and administrative requirements. Several statutory changes discussed in committee could have long-term implications for local control, taxation, and program administration.
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