In 2025, facing a crumbling school system marked by significant financial strain and a declining student population, Vermont’s Republican governor, Phil Scott, passed legislation for what had previously been unthinkable: consolidating the 119 town-based school districts to five state-centralized school districts and flipping the state education funding formula on its head. While many Vermonters were infuriated by the departure from the state’s long tradition of fiercely-guarded local independence in schooling, the change is simply the result of years of legislative mismanagement. Ironically, the current progressive reformulation of Vermont’s education system is led by its Republican governor, following a long period of nearly total progressive control. These changes represent the state’s boldest and most uncomfortable action yet: breaking with tradition to promote education equity and make Vermont more inclusive.
Vermont’s education funding system is unique and extremely complicated. Every year on Town Meeting Day, Vermonters in every town gather to debate and approve a local school budget. The state then distributes education funds to each town based on what each one requests, and if a town requests a surplus, their property taxes are increased to make up the difference. This system is untenable: Districts face no hard limits on spending and shift the financial burden onto property taxpayers. In fact, in a stark contrast from this system, nearly every other state has education funding systems where the state provides each district a fixed budget.
Reform has long been overdue, as Vermont’s current education system has countless inadequacies and shortcomings. The state’s multitude of extremely tiny rural districts creates enormous redundancy in spending and inequity between students. As the rest of the country rapidly develops, Vermont lawmakers have essentially attempted to preserve the state like it existed in the 1960s, foregoing reform and stalling development to preserve this rural character. In terms of education, these efforts have meant preserving local, independent control of districts, creating significant barriers to inclusion in both cost and demographic diversity. In Vermont, a town’s ability to invest more in local schools hinges entirely on levying higher property taxes, making a good education in Vermont incompatible with affordability. Curiously, Vermonters pride themselves on democratic principles like equity and inclusion, even though the state’s practices work to actively undermine these values. In a country set starkly on an urban-rural political divide, Vermont stands out. The irony that characterizes Vermont — its status as the most rural yet the most progressive state — also toppled the state’s flawed education tradition when its Republican governor led a reform effort.
The Covid-19 pandemic pushed the state’s education system to its breaking point. Despite Vermont often ranking first or second in the country in per-pupil spending, since the pandemic, the state’s fourth- and eighth-grade test scores have declined far more dramatically than the national average and have not since recovered. Vermont school districts had also become accustomed to budget surpluses from pandemic-era federal stimulus programs. In 2024, districts began to see deficits while budgeting for future years as they came up short without any aid. In 2025, Secretary of Education Linda McMahon froze the pandemic-era funds two months before they were set to expire. While these funds were eventually restored to their original expiration date, the freeze revealed the frailty of the state’s education system as districts fell short on excess funds they had already spent to hire support staff.
After the system reached a near collapse, creating five centralized school districts now seems like an inevitability. Vermont, like many other states, has faced an extreme affordability crisis for several years. The cost of living is high compared to the national average, especially considering that Vermont has the smallest economy of any US state. This imbalance is driven by many factors: a high proportion of vacation and seasonal homes; high energy costs; an erroneous, slow, and outdated statewide zoning law; and misplaced state investments, all reflecting structural mismanagement that has made growth impossible. In 2026, Vermont ranked fifth in the country for state government spending per capita at $12,873. In neighboring New Hampshire, number 46, the figure stood at $6,020. Vermont’s exorbitant spending on development has yielded few results, reflecting a pattern of organizational blunders that extends to the school system.
Vermont’s affordability crisis was a primary driver of major electoral upset in 2024, the worst for Democrats in any state. Despite former Vice President Kamala Harris carrying the state with 64.4 percent of its vote — the highest percentage she received in any state — Republicans throughout the state won on the coattails of Governor Scott, who swept to victory with 73.4 percent of the vote. Ultimately, Democrats lost their legislative supermajority, and a Republican was later elected lieutenant governor in a bitterly contested race. Put simply, Vermonters were angry that even when armed with a supermajority, Democrats were more focused on passing tax hikes than fixing the state’s housing, affordability, and education crises. The past legislature demonstrated its willingness to easily override the governor’s veto, doing so almost as often as the governor vetoed bills due to affordability concerns. The Democratic legislature had many opportunities to address growing affordability concerns. Perhaps fearing voter backlash from this break in tradition, Vermont legislators instead did nothing. Either way, Vermonters took note.
In 2025, armed with a sweeping mandate, Republican Governor Scott moved swiftly to re-establish fiscal responsibility and improve education equity. The legislature preliminarily approved a new system which would impose a progressive education tax on Vermonters based on municipal wealth. Using a weighted formula, the state would distribute the funds per pupil to each district. Disadvantaged students — including those who are low income, have disabilities, attend rural schools, or speak English as a second language — would be given additional financial support.
The result is an extreme shift in the scales. Wealthy towns could see their taxes increase and their school budgets fall while the inverse happens in a neighboring poorer town. This result, however, is imperative for Vermont to live up to its values of inclusion. Rather than holding each town responsible for choosing which programs to fund — making up the difference in costs themselves — the new system allows each district the room to provide for necessary programs to best serve and meet the needs of all Vermont students. This change means that Vermont can transition away from its exclusive homogeneity and begin to build a more inclusive culture.
For years, far-left leaders had been unwilling to act to make imperative bold changes, perhaps out of fear of angering some of their constituents. This fear ultimately led to their defeat, paving the way for necessary reforms spearheaded by the Republican governor. The odd route which brought about Democrats’ weakened electoral position also opened the door for education reform in the state. Vermont’s values hinge on this debate to make education more equitable and inclusive. The core of the question is not how Vermont schools will be funded: it is who even gets to be a Vermonter. Based on the state’s proposed education reform, and the Republican governor’s leadership, the answer is clear: anyone.